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Presentation to BIFM NI ‘A PFI case study’ Iain A. Murray Managing Director & Partner BIFM Scottish Regional Chairman Member of NI PPP Working Strategy.

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Presentation on theme: "Presentation to BIFM NI ‘A PFI case study’ Iain A. Murray Managing Director & Partner BIFM Scottish Regional Chairman Member of NI PPP Working Strategy."— Presentation transcript:

1 Presentation to BIFM NI ‘A PFI case study’ Iain A. Murray Managing Director & Partner BIFM Scottish Regional Chairman Member of NI PPP Working Strategy Group

2 Dispute Management Arbitration / Litigation Claims Preparations and Defence Dispute Resolution Document Services Programming Analysis Cost Management Cost Estimates Procurement Advice Tender Documentation Change Management Engineering Services Consultancy Banking Support Services Construction and Property Tax Business Advantage Best Value Investigation and Analysis Research Construction Management Construction Advice Design Management Programming Procurement of Trade Packages Management of Construction Site Quality Management Project Management Development Management Tenant Fit-Out Advisor PFI / PPP Advice Planning Supervision Information Management FM Consultancy Life Cycle Costing FM Procurement Performance Measurement Utilities PFI/PPP Advice

3 The Project – Acute Hospital PFI First operational PFI procured Acute Hospital in Scotland circa £ 650m over 30 year concession period circa £ 65m capital value of construction project circa 350 Acute in-patient beds with circa 50 day care beds Full diagnostic and clinical support facilities Completed three months ahead of schedule 250 staff transfer under the provisions of TUPE Full FM services from Estates, Cleaning, Catering & Security Integrated Helpdesk and CAFM system controls FM

4 LIFE CYCLE MANAGEMENT Total Total HandBack Year35 Operate 35 Years Build 2 Years Design 1 Year Capex Fees Running Costs Utilities Operating Costs Total Cost of Project Planned Preventative Maintenance PPM Reactive End of Term End of Term Periodic Replacement / Refurbish Life Cycle Financing Costs

5 The Problem to be solved Project team moved on three years previous – no handover Interface between FM and Contractor during construction absent Operational ‘go live’ accelerated by three months TUPE staff transfer a year ahead of ‘go live’ without penalty Training on new systems not commenced Operational precedents not in existence Commissioning being undertaken without FM input Construction handover documentation not complete at ‘go live’ Full payment mechanism penalties applied at ‘go live’

6 The objectives Delivery of service to appropriate levels prime objective Fully functioning and operational helpdesk Production of report to support payment mechanism requirements Completion of commissioning Programme of staff training on new systems Completion of construction handover documentation Production of management method statements Gap analysis of built environment to original priced FM Gap analysis of built environment to original lifecycle

7 The reasons for setting the objectives Delivery of service to appropriate levels PFI / PPP is ALL about long term transfer of risks Service delivery is largest single aspect of the project Non-performance WILL escalate into high unavailability deductions Health & Safety in a clinical environment is critical Some services such as porters and cleaning are essential to clinical support - i.e. blood delivery, patient movement, hygiene Clinicians are already under pressure to deliver care Lifecycle strategy requires service delivery support

8 The reasons for setting the objectives Fully functioning and operational helpdesk The helpdesk is the fulcrum of the service delivery Short response times require accurate and efficient responses The asset is of a significant size and diversity The operation is 24/7 and service levels do not drop at night PPM needs to link to reactive requests to prevent failures Essential in preparation of reports and invoices Information is ‘live’ and the Trust have access to it

9 The reasons for setting the objectives Production of report to support payment mechanism requirements The Trust placed the emphasis on reporting to support invoices The Trust have a team of managers who scrutinise the report Un-reported failures reduces trust between the parties The objective from the Trust was to encourage improvements to service delivery through trend analysis The FM company requires to spot trends before triggers are hit From FM point of view it is a risk management tool From SPV and Funder perspective it is a risk management tool

10 The reasons for setting the objectives Completion of commissioning Required in order to prove systems were functioning to FM FM cannot safely operate and maintain un-commissioned equipment Commissioning figures are used as baseline for settings to systems Commissioning documentation required to complete construction handover documentation Written requirement of the Project Agreement and carried defaults for failure to complete Essential to contractor to obtain final payments

11 The reasons for the objectives Programme of staff training on new systems New systems did not compare with old facility systems Health & Safety issues at top of the Agenda Commissioning required to be carried out in presence of trained operatives Service delivery could not be adequately carried out without training Response times and ultimately mitigation of deductions through failures require training TUPE breach if training not executed to allow staff to perform their duties

12 The reasons for the objectives Completion of construction handover documentation Essential for the preparation of ALL method statements Requirement to reconcile ‘as built’ facility with priced project 1998 Requirement to reconcile location of all plant and equipment O&M manuals and Safety File required to write PPM HTM’s required to be reconciled with Safety File ‘As built’ facility reconciliation with lifecycle costings Required to complete commissioning Required to populate the CAFM system

13 The reasons for the objectives Production of management method statements NOT to be mistaken for ‘operational’ method statements The objective was to introduce the PFI principles of performance, availability and payment mechanism to the ‘management’ team Introduce the HTM requirements to the delivery of the service Cross reference O&M, Safety File and ‘as built’ documentation to original project documentation Develop overarching management reference tool for on-site team who were not familiar with PFI Required to satisfy elements of the Project Agreement

14 The reasons for the objectives Gap analysis of built environment to original priced FM Project had gone through usual construction period development No FM input during construction, consequently no continued reconciliation had taken place Some elements of D&B type construction approach had ignored original FM calculations Nuances of ‘as built’ accessibility to plant and equipment needed to be discovered and recorded Areas had to be recalculated and costs for servicing applied without increase to FM original costs (excluded indexation)

15 The reasons for the objectives Gap analysis of built environment to original lifecycle Project had gone through usual construction period development No lifecycle input during construction, consequently no continued reconciliation had taken place Some elements of D&B type construction approach had ignored original lifecycle calculations Nuances of ‘as built’ accessibility to plant and equipment needed to be discovered and recorded for replacement costings Areas had to be recalculated and costs for replacement applied without increase to lifecycle original costs (excluded indexation)

16 How the objectives were met Delivery of service to appropriate levels A matrix of the risks to be covered was generated The risks were associated with individual service delivery types Performance was analysed and associated to MMS Health & Safety, specifically HTM requirements were incorporated Response times were examined in the context of available staff and their ability and target areas generated Service was put in context of clinician requirements Lifecycle strategy was related to MMS and service delivery

17 How the objectives were met Delivery of service to appropriate levels Staff training was elevated and accelerated including management PFI structure was detailed and explained in context of facility CAFM and Helpdesk systems were populated with all project specific data FM staff were introduced to construction and commissioning team Existing service delivery techniques were integrated into project from non-pfi healthcare service delivery projects Clear delineation of clinical and FM areas of responsibility were agreed with the Trust

18 How the objectives were met Fully functioning and operational helpdesk The helpdesk was made project and site specific by FSI Response times and priority levels were input CAFM system populated with accurate ‘as built’ asset data Competent and responsible helpdesk operatives recruited PPM linked to reactive requests to prevent failures and spot trends Crystal reports used to generate accurate reports for invoice support Constant monitoring of the system introduced with the implementation of a dedicated 24/7 helpdesk manager

19 How the objectives were met Production of report to support payment mechanism requirements Physical monitoring and reporting requirements detailed and pro- forma created for direct input to CAFM Reporting format and detail agreed with the Trust No instance of failure to report deficiencies set at KPI 100% Report was integrated into MMS which defined how to spot trends, understand default triggers and manage risks Trends were acted upon and additional rectification reports generated SPV and Funder together with Trust agreed actions on reports

20 How the objectives were met Completion of commissioning Commission management plan generated and accelerated Commissioning data incorporated into MMS and operational systems Commissioning figures published as baseline for system operation Commissioning team and Construction handover team integrated to produce parallel documentation not sequential Commissioning management plan agreed with Trust and areas of non-compliance agreed for mitigation Final payments withheld from Contractor and Commissioning team until documentation completed

21 How the objectives were met Programme of staff training on new systems Manufacturer and installers of systems compelled to train FM staff on correct operation of all systems Health and Safety related issues given highest priority Commissioning required to be carried out in presence of FM operatives Instances of non-performance on PPM issues were charged back to contractor TUPE requirements were published and put in context of training to avoid instances of breach of conditions

22 How the objectives were met Completion of construction handover documentation Document control room (library) created Register of all documents both complete and incomplete created Construction documentation management plan implemented O&M manuals and Safety File given the highest priority HTM’s reconciled with Safety File ‘As built’ drawing programme accelerated to completion Commissioning data cross referenced to construction data All information provided electronically for input to CAFM system

23 How the objectives were met Production of management method statements NOT to be mistaken for ‘operational’ method statements MMS extracted information Project Agreement, Output Specification, Financial Model, O&M’s, Safety File and HTM’s Written as a quick reference guide for management, placed in the data room (library) Written in plain english removing legalise Provided to the Trust as the required method statements and agreed as an accurate reflection of the spirit of the agreements Intended to be ‘live’ documentation for continual use

24 How the objectives were met Gap analysis of built environment to original priced FM Physical checks made on the ‘as built’ environment – survey Complete reconciliation of asset’s with original asset schedule FM re-priced as if starting from scratch – gap analysis undertaken FM Strategy developed with original costs on ‘as built’ environment with the original output specification standards Areas had to be recalculated and costs for FM applied without increase to original costs (excluded indexation) NO erosion of standards was acceptable New strategy agreed with the Trust

25 How the objectives were met Gap analysis of built environment to original lifecycle Physical checks made on the ‘as built’ environment – survey Complete reconciliation of asset’s with original asset schedule Lifecycle re-priced as if from scratch – gap analysis undertaken Lifecycle re-modelled and strategy put in place with original costs on ‘as built’ environment Areas had to be recalculated and costs for replacement applied without increase to lifecycle original costs (excluded indexation) No erosion of standards was acceptable New strategy agreed with the Trust

26 Some of the more bizarre revelations Re-measurement of the checks required on ‘as built’ environment increased possible failure points by 20% to 251,641 Service failures in first month were re-measured using call completion times instead of call start times yielding an increase from 55% completion to 88% completion The helpdesk received 16,411 calls in the first month of operation

27 The lessons learned Create a vehicle for the bid team to articulate the spirit of the agreements to the operational team Place operational FM management representative within the construction team during the construction period Continually examine any changes in design or construction with original FM and LCM costs and specifications Educate construction team on the requirement for complete, accurate O&M, Safety File and ‘as built’ drawings prior to handover Make operational FM team part of the commissioning process Create MMS for non-pfi literate staff and train them

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