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Industry Briefing: A National Study of Cleaning Procurement Best Practices

Industry Briefing: A National Study of Cleaning Procurement Best Practices. Presented by: Vince Elliott, President - Elliott Affiliates, Ltd. Presentation Outline. I. Case Study Portfolio Summary of Results II. Market-Driven Strategies Negotiation vs. Re-Bid

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Industry Briefing: A National Study of Cleaning Procurement Best Practices

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  1. Industry Briefing:A National Study of Cleaning Procurement Best Practices Presented by: Vince Elliott, President - Elliott Affiliates, Ltd. NCMA 25th Annual Government Contract Management Conference 21st Century Federal Contract Management: Challenges and Opportunities

  2. Presentation Outline I. Case Study Portfolio • Summary of Results II. Market-Driven Strategies • Negotiation vs. Re-Bid • Performance vs. Traditional Contract • Market Dominate vs. Competitive • National vs. Regional/Local III. Best Practice Procurement Checklist

  3. I.Case Study Portfolio

  4. Inclusion Criteria • Mature Cleaning Program • Available for On-Site Audit • Will Provide Requested Access and Data • Identity Protected (NDA Signed) • Clear Example of Cleaning Model • Geography Distributed Locations • Office-oriented Properties • Large Pod or Large Property

  5. Study Methodology • Assembled a Master List of Properties • Secured commitment • Conducted On-Site Inspections • Conducted On-Site Interviews • Conducted On-Site Data Collection • Collected Participant Provided Data

  6. Portfolio Study Sites Where were the properties included in the study?

  7. Portfolio-Wide Evaluation • Cleanliness Quality • Customer Satisfaction • Operational Performance • Financial What We Found

  8. Case Study Portfolio Not Clean - Unhappy Clean - Unhappy Not Clean - Happy Clean - Happy

  9. Case Study Results

  10. II. Market-Driven Procurement Strategies

  11. Market-Driven Strategies • Negotiation vs. Re-Bid Contracts • Performance vs. Traditional Contracts • Market Dominate vs. Open Competition • National vs. Regional/Local Contractors

  12. Negotiation vs. Re-Bid What is a Negotiation vs. Re-Bid Outsourcing event?Which strategy delivers the greatest savings?Which strategy delivers the greatest occupant satisfaction?

  13. Negotiation Advantage Re-Bid Advantage Time Required Cost of Event Easy to do Satisfaction Quality Savings Negotiation vs. Re-Bid Contract

  14. Traditional vs. Performance Contracts What is a Performance vs. Traditional Contract?Buying tasks or buying results?Which strategy delivers the greatest savings?Which strategy delivers the greatest occupant satisfaction?

  15. Traditional vs. Performance-Based Relationship • Performance-Based WIN-WIN, or Win-Win, or Lose-Lose WW Ww LL • Traditional Win-Lose Win Lose

  16. Traditional Advantage Performance Advantage Comfort Level Preparation Easy to do Satisfaction Quality Savings Traditional vs. Performance

  17. Market Dominate vs. Open Competition What is a Market-Dominate vs. Competitive market?Which strategy delivers the greatest savings?Which strategy delivers the greatest occupant satisfaction?

  18. Dominate Advantage Competitive Advantage Relationship Ease of Doing Business Market Intelligence Satisfaction Quality Savings Market Dominate vs. Open Competition

  19. National vs. Regional/Local Contractors What is a National Vendor?Do National vendors deliver “National” Performance? Quality Satisfaction Productivity Pricing

  20. National Advantage Regional/Local Advantage Relationship Ease of Doing Business Local Buy-In Satisfaction Quality Savings National vs. Regional/Local Contractors

  21. Summary: Comparison of Common Outsourcing Strategies * Normalized Function of Quality, Satisfaction and Price.

  22. Common Outsourcing Strategies BIC Outsourcing Strategies Negotiate Contract Re-Bid Traditional Contract Performance National Contractor Regional/Local Market Dominate Contractor Open Competition Case Study Outsourcing Strategies

  23. What works: • Four Outsourcing Strategies to think about • Re-Bid when possible • Use Performance-Based Contracts • Open the local market to competition • Consider regional contractors

  24. What works: • Why? • Lower price (greater savings) • Greater productivity • Greater value • Cleaner buildings • Fosters Process Improvement • More control (competitive environment)

  25. III. Best Practice Procurement Checklist

  26. Implementation Overview • Focus Group • Customer/Occupant-Driven SOW • Solicit Broad participation in Bid process • Bid Conference – Set expectations, Site walk thru • Receive RFP Proposals – double blind Capability - Price • RFQ & select finalists • Reference Site Visits, Project Manager Interviews • Final Proposal–Price Agreement • 90 day Transition Period • 6-8 months to stabilize

  27. The Contract Reflects the Relationship • Linked buyer-seller goals - results • Pay for performance • Establish metrics • Quality • Customer Sat. • Financial • Best in Class Systems • Not-to-exceed cost • Incentive-goal linked • 3rd Party measured • Three-way CPI • Contract-level data validity • Score Card Report

  28. Case Study Preparation Checklist 1) Identify Internal Champion 2) Structured Change Management 3) Benchmark of Pre-Project Performance 4) Customer-Driven Specification 5) Collect & Validate Property Profile Data 6) Conduct Local Market Capability Analysis 7) Out-Tasking Support 8) Define STOP Goals 9) Use A Performance-Driven Contract 10) Define Performance Measurement System 11) Prepare RFP Documents 12) Build-In Governance Structures 13) Conduct Pre-Bid Conference 14) Conduct Site Tours 15) Manage Pre-Bid Questions & Communications

  29. Case Study Selection Checklist 1) Cross-Functional Evaluation Team 2) Review & Clarify Proposals 3) Conduct Bidder Capability Evaluation 4) Conduct Process Capability Evaluation 5) Conduct Financial Analysis 6) Conduct Risk Assessment 7) Value Stream Mapping 8) Finalist Interviews 9) Firm & Final Proposal & Pricing 10) Business Case Recommendations 11) Create a Transition Compliance Checklist Is there life after Best Practice Cleaning Procurement? Oh yes; there’s Transition and On-Going Management.

  30. The Outsourcing Business Case “It's not about finding the best price; It's about finding the best people, with the best processes, from the best partner, at the best price!”

  31. Was this Session helpful? • Questions • Comments • Other Strategies Vince Elliott Elliott Affiliates www.ealtd.com 410-584-8560

  32. Your Presenter: Vince Elliott, President Elliott Affiliates, Ltd. • Vince is the founder and current President and CEO of Elliott Affiliates, Ltd. of Hunt Valley, (Baltimore), Maryland. He is widely recognized as the leading authority in the design and utilization of performance-based management techniques to establish continuous improvement systems for cleaning and facilities outsourcing. As one of the first to apply the concepts of performance based contracting in the Real Estate industry over 34years ago, Vince has a broad experience and insight into - and understanding of - the buyer's view of what “clean” means, how it is used in performance-based measurement, and on-going management of cleaning. • Vince has represented buyers across the country in writing, modifying or updating over 500 performance-based building service contracts with an estimated market value of over a quarter of a billion dollars in contracted services. • Drawing on the work of Dr. W. Edwards Deming, Joseph Juran, Phil Crosby, Yoji Akao and others, Vince has integrated the methodology of the Malcolm Baldrige National Quality Award process into a powerful strategy for cleaning system management. His work has been published in national magazines and he speaks frequently at national conventions. Vince has also been the recipient of a number of awards and commendations, including the prestigious Apgar Award for Excellence by the National Association of Corporate Real Estate Executives (NACORE) and Cleaning Management Magazine’s “Outstanding Service Award". He was recently the host on a weekly radio program called “Consulting Success: Key Strategies in Business Management” on which he interviewed leading business strategists, authors and experts. Vince is currently a regular contributing editor a national industry magazine. • Vince is a member of the Association for Quality and Participation (AQP); the American Society for Quality (ASQ), where he is a past chairman of the Facilities Management Quality Control Committee; and a Charter Member of the Cleaning Management Institute (CMI). He is also a member of the International Facilities Management Association (IFMA), the Building Owners & Managers Association (BOMA), CoreNet Global, International Sanitary Supply Association (ISSA), and (NCMA) National Contract Management Association. • Vincent Elliott has a bachelor’s degree in Economics from Towson University and a Master of Operation Research degree from Johns Hopkins University in Baltimore. Vince is also a past Associate Professor at a leading Maryland University teaching service management strategies.

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