Service and Solutions

Alternative Forms of Delivery

February 2005

An overview of PWGSC real property

Portfolio

• Steward of $7B in holdings, includingnational treasures

• 6.7M m2 (52% owned/48% leased)

• 2,100 leases worth $709.6M

• 254 Government of Canada buildings

• Accommodation of 210,000 public servants & parliamentarians in 1,900 locations

Public Works and Government Services

“The Government of Canada’s strategic real property advisor and portfolio manager”

PWGSC’s Alternative Forms of Delivery

Performance-based Contract:

• Statement of Work

• Performance Management Framework

Service Delivery

‘Delegated manager’

Faster processes, industry expertise

Commercial interests& public trust

responsibilities

Private sector

Federal departmentsService Offering

Service Delivery

“Seamless Relationship”

Service Management

Public accountability

Standards & policy development,

client relationships

Strategic contract management

PWGSC

Service Management

AFD New Procurement

Objectives of RFP

“The Department is seeking a dynamic, solution-oriented private sector Real Property Service Providers who demonstrate commitment to long term collaborative relationships and strategic alliances for the delivery of high quality service to our clients”

Expansion of servicesIncrease in inventory from 2.4 million m² to 2.9 million m²

Flexibility to increase Project levels from $200 K to $1 M.

Number of portfolios (and Contracts) reduced Fees to be a fixed lump sum tied to Consumer Price Index rather than a percent of O & M.

Contractor's property managers to be integrated with the Department's Service Integration Teams.

Approach to New Procurement

Facilitate and encourage tenants to deal directly with the Contractor (and vice versa).

Contract term - 4 years with 3 two year options (potential 10 year contract)

Amended KPI Framework - reduced # of KPIsContractor to implement Quality Management System to the ISO 9001 - 2000 standard

Reduced inspections and contract oversight by PWGSC – more strategic focus on Portfolio Management, rather than day-to-day activities

Shift focus from inputs to outputsNew Contractor Incentive Program

Approach to New Procurement(continued)

ISO

certified

Performance v. quality management

• Quality control & process descriptions

• Quality assurance & measurement

• Internal & external audits

• Corrective action on any non-conformance

• Innovation & new ideas – continual improvement

• Quality monitoring

• Key Performance Indicators (KPI)

• Fee determination

• Incentive program

SERVICE PROVIDER: Quality Management

PWGSC: Performance Management

Service Offerings

Property Management Services

• Building Performance Reviews

• Service Calls• Energy Management• Daily Operations• Maintenance

Management• Building Cleaning• Materiel Management• Other Building

Services• Grounds Upkeep and

Landscaping

• Physical Security Services

• Building Infrastructure Continuity Plans– Prepare, maintain and

annually update– PWGSC template

tailored & populated• Building Emergency

Plans• Business Continuity Plan• Commercial Operations

Project Delivery Services

• Managing Projects within Cost Categories

• Tenant Service Projects

• Commissioning

Optional Services

• Lease Administration and Facilities Management Services

• Project Delivery Related Services – Projects $200,000 to $1,000,000

• Commercial Operations Related Services – Leasing

Requirements Related to All Services

• Contract Relationship Management

• Tenant Relationship Management

• Quality Management• Subcontract

Management• Management of PWGSC

Contracts• Novation and

Assignment of Existing Contracts

• Occupational Health and Safety

• Environmental Protection and Conservation

• Stewardship of Heritage Character and Design Quality of Buildings

• Critical Incidents• Risk Management

TRANSITION

• SEAMLESS DELIVERY

• BUSINESS AS USUAL

• IMPACT ON CLIENTS = NONE

• Guiding principle Partnerships, not policing

• Focus Adding value for Canadians

The evolution of AFD in PWGSC

“Service providers are powerful partners in driving economy, quality, innovation & satisfaction”

Initial AFD

→ Encouraged innovation

→ Continuous improvement

→ Self-monitoring QMS

Traditional relationship

Strategicalliance

1998 2005• Heavy prescription

• Hands-on monitoring

• Lack of trust

Strengthened alliance

2002

• Turnaround exercise

• Team-building

• Reduced oversight

New procurement

AFD context in PWGSCAFD context in PWGSC1998 2005

Term 3 years + 4 x 1 year = 7years

4 years + 3 x 2 years = potential 10 years

Services Property management & project delivery (up to $200K)

All inclusive Property Management Services/

Project delivery (up to $200K)

Scope 300 office buildings;2.4M m2

319 office buildings; 2.9M m2

Organization 13 Regional contracts 8 Regionally-based individual portfolios encompassing all parts of Canada

Secured Options n/a • projects up to $1M

• facilities management

• commercial leasing

• lease administration

Service Provider Brookfield Lepage Johnson Controls

SNC-Lavalin ProFac Inc.

Regrouping of Portfolios Along Regional Lines:

No. of Bldg. M2 Pacific 33 194,151Western 20 294,474Ontario 55 340,412Ottawa Downtown 18 435,033Ottawa Perimeter 25 511,535Gatineau 11 487,609Québec 55 381,500Atlantic 102 274,956

* BCBC agreement (89,000m2) has been included in portfolio #1(Pacific).**SPMC agreement (40,000 m2) is being incorporated into portfolio #2 (Western).

Procurement - Summary

Request for Proposal issued April 16th - closing July 15, 2004

Bid Evaluation Period - mid July to September 30, 2004

TB approval and contract award – November 22, 2004

Contracts signed without negotiation – December 7, 2004

Transition period of 4 months commencing December 1, 2004

Start date for new contracts April 1, 2005

Contract Award

• Through the use of a competitive process a new Service Provider was the successful bidder for all 8 portfolios.

• SNC-Lavalin ProFac Incorporated signed contracts with PWGSC in December 2004 and take over their duties on April 1, 2005

• The web-site for SNC-Lavalin ProFac Inc. is www.snclavalinprofac.com

Building on the AFD success - PWGSC has expanded services to include 2/3 of the our custodial office inventory in the new AFD contracts.

Private sector will manage the day to day operations of federal properties

PWGSC retains asset management, strategic investment decision-making, acquisition and disposal services, payments in lieu of taxes, and operation of the National Service Call Center.

PWGSC will focus on our key role as strategic real property advisor to government and remains accountable for all services provided to our customer departments, whether delivered in-house or through external service providers.

Conclusions

Departments will continue to contact PWGSC for service requests and use the National Service Call Center to obtain service.

New AFD incorporates lessons learned, industry best practices and more ambitious performance indicators to ensure the highest quality service delivery.

New contracts provide flexibility to increase AFD inventory by up to 10% and provides optional services for facility management, lease administration, commercial leasing and project delivery services ($200K >$1Million)

As opportunities present themselves, other assets and services will be assessed to determine whether they could also benefit from the efficiencies offered by AFD.

Conclusions (continued)