DMFD86 Provision of Estates Management Services

1.1. Report LFC-0377y explains that in January 2017 the London Fire and Emergency Planning Authority (LFEPA) approved the appointment of consultants Dron and Wright for the provision of Estate Management Services and entered into a contract for 3.5 years (report FEP 2688). Dron and Wright are a well-established commercial property partnership with experience of advising owners and occupiers in all matters relating to their commercial property occupation.

1.2. Provision was made within with the agreed recommendation to extend this term up to a further two years and an option to enact a break clause, at the LFC’s sole discretion, at any time during the term of the contract with three months’ notice. The appointment was agreed following an extensive OJEU procurement process in compliance with Public Contracts Regulations (2015).

1.3. The current contract is structured on the provision of specific services with a combined schedule of fixed fees (where the work programme is known and planned) and hourly rates as appropriate (un-programmed, short notice requirements) to be undertaken by a range of professional, competent roles within Dron and Wright.

1.4. The annual cost of estate management services incurred by the revenue budget over the three financial years since April 2017 has been as follows, totalling £878,000:

i) April 2017 to March 2018 - £281,000
ii) April 2018 to March 2019 - £ 290,000
iii) April 2019 to March 2020 - £307,000

1.5. All figures include the annual index uplift permitted in the contract. These figures exclude the additional support commissioned on high profile capital projects.

1.6. The annual cost of estate management services incurred to support redevelopment and capital schemes over the three financial years since April 2017 has been as follows, totalling £627,000:

i) April 2017 to March 2018 - £208,000
ii) April 2018 to March 2019 - £ 230,000
iii) April 2019 to March 2020 - £189,000

1.7. The value of the estate management services contract is dependent upon the likely instructions given to Dron and Wright in any one year and consultancy services within the scope of the contract are funded from the approved revenue consultancy budget. This contract is let on the basis that the LFC is not obliged, nor does it guarantee to provide any, or minimum works to any of the work streams within the scope of the Property and Estates Management Services contract for the duration of the contract.

2.1. This report recommends extending the provisions of the current Estates Management Services contract with Dron and Wright for a period of up to two years from 1 October 2020 with the option to enact a break clause, at the LFC’s sole discretion, at three months’ notice to take advantage of collaboration opportunities, to be funded from the existing Property budgets. The estimated revenue budget is £300,000 per annum, based on previous years. Capital cost incurred with this contract is included in the individual project budgets.

Collaboration and transformation

2.2. Historically, LFC estate management services have been undertaken by small and medium sized enterprises (SMEs) where resources providing this service would become embedded within the organisation. This approach was adopted as frameworks available at the time of awarding contract were primarily designed for the individual call off, of each estates’ management function. In addition, larger enterprise firms were considered a barrier to SMEs competing for this work.

2.3. However, under the Policing and Crime Act (2017), the London Fire Brigade (LFB) has a duty to consider collaboration opportunities (with police and ambulance services) and, where it is in the interests of efficiency or effectiveness, to put these collaboration opportunities into practice. Also, the representation of LFB officers on the GLA Estates and Facilities Management Collaboration Working Group has enabled a supportive network and understanding of the collaboration benefits across a range of estates matters as part of the GLA family.

2.4. It is the LFB’s intention to engage in future collaboration by procuring estates management services as part of the TfL property consultancy framework available to the GLA Group functional bodies. This commitment will be delivered as an outcome of implementing the planned target operating model associated with the transformation of Property Services expected during the autumn of 2020.

3.1. The London Fire Commissioner and decision takers are required to have due regard to the Public Sector Equality Duty (s149 of the Equality Act 2010) when exercising our functions and taking decisions.

3.2. It is important to note that consideration of the Public Sector Equality Duty is not a one-off task. The duty must be fulfilled before taking a decision, at the time of taking a decision, and after the decision has been taken.

3.3. The protected characteristics are: Age, Disability, Gender reassignment, Pregnancy and maternity, Marriage and civil partnership (but only in respect of the requirements to have due regard to the need to eliminate discrimination), Race (ethnic or national origins, colour or nationality), Religion or belief (including lack of belief), Sex, and Sexual orientation.

3.4. The Public Sector Equality Duty requires us, in the exercise of all LFC functions (i.e. everything the LFC does), to have due regard to the need to:
a) eliminate discrimination, harassment and victimisation and other prohibited conduct;
b) advance equality of opportunity between people who share a relevant protected characteristic and persons who do not share it; and
c) foster good relations between people who share a relevant protected characteristic and persons who do not share it.

3.5. Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic where those disadvantages are connected to that characteristic;
b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it; and
c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

3.6. The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.

3.7. Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—
(a) tackle prejudice, and
(b) promote understanding.

3.8. This report proposes extending an existing contract on which no adverse equality implications were identified at the time of the contract. There are therefore no disproportionate equality impacts likely as a result of the decision to extend this contract.

Sustainability

4.1. The incumbent supplier is a small to medium sized enterprise (SME). Should the recommendation be agreed this will support LFB’s commitment to SMEs as set out in the GLA Group Responsible Procurement Policy and performance against the corporate indicator for SME spend.

5.1. This report recommends that expenditure is agreed to extend the current Estates Management Services contract for a period of 2 years, with estimated revenue expenditure of £300,000 per annum, based on previous years. Capital costs incurred from this contract are included in the individual project budgets and are therefore not included within this figure. The report notes that total revenue expenditure of £878,000 and capital expenditure of £627,000 has been incurred under this contract over the last three years. These costs have, and any costs incurred under the extension will be contained within the existing revenue and capital budgets. The revenue costs will be met through the existing Consultants budget which for 2020/21 is £2.8m, and of this £300k is allocated to Estate Management Services.

5.2. The report goes on to note that collaborative arrangements for the provision of this work from October 2022 are also being investigated. Any savings achieved as part of this work will be considered as part of the budget process for future years.

6.1. Under LFEPA, the previous Authority agreed in FEP 2688 to permit the appointment of Dron and Wright on a three-year term with the option to extend, with break rights, for a further two years.

6.2. Pursuant to section 9 of the Policing and Crime Act 2017, the London Fire Commissioner (the "Commissioner") is established as a corporation sole with the Mayor appointing the occupant of that office. Under section 327D of the GLA Act 1999, as amended by the Policing and Crime Act 2017, the Mayor may issue to the Commissioner specific or general directions as to the manner in which the holder of that office is to exercise his or her functions.

6.3. By direction dated 1 April 2018, the Mayor set out those matters, for which the Commissioner would require the prior approval of either the Mayor or the Deputy Mayor for Fire and Resilience (the "Deputy Mayor").

6.4. Paragraph (b) of Part 2 of the said direction requires the Commissioner to seek the prior approval of the Deputy Mayor before “[a] commitment to expenditure (capital or revenue) of £150,000 or above as identified in accordance with normal accounting practices…”.

6.5. The Deputy Mayor's approval is accordingly required for the Commissioner to extend the contract term of the Dron and Wright appointment.

6.6. The Public Contracts Regulations 2015 were fully complied with in the original OJEU procurement exercise and the Commissioner’s duties to consider collaboration under the Policing and Crime Act 2017 will be fully explored in any subsequent arrangements for estates management services.