Transcript DISPOSAL PROGRAMME 2005/2006

BRIEFING SESSION ON APPOINTMENT OF A
SERVICE PROVIDER/S TO CONDUCT LEASE
REVIEW
20TH SEPTEMBER 2012
Ms. L. BICI
BACKGROUND
•
One of the key functions of the Department is to provide office
accommodation to 41 National Client Departments. This accommodation is
provided through state-owned and leased accommodation. Majority of the
leasing periods range from 1 year to 9 years 11 months with a rand spend in
excess of approximately R3 billion per annum.
•
The Department seeks to appoint a qualified service provider/s to conduct a
comprehensive review of the leases portfolio the NDPW has entered into
with private sector. This is a priority project because the Department is
currently faces a number of service delivery challenges. These relate to
among others:
–
Certain weaknesses which compromise achievements of realising the value for money and
service delivery in the leasing environment.
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BACKGROUND…
which led to the withdrawal of the delegations for signing of new leases
and lease extensions from the Regional offices. This situation has placed
significant pressure on the approval process which is exacerbated by high
month-to-month lease, renewals and new leases which requires
processing.
The Minister brought a Turnaround Team as well as National Treasury on
board to assist the Department with these leasing challenges and to put
systems in place to stabilise the environment.
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PROJECT MANAGEMENT & GOVERNANCE PROTOCOL
NT
NDPW
Steering
Committee
Lease Review
NDPW
And
Lease Operations
Improvement Team
Team
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LEASE PORTFOLIO
Overall Size of the Lease Portfolio for Office Accommodation
Region
Number of Leases
Estimated Value of leases per Year
Month-to-month leases
Bloemfontein
199
86 900 714
107
Cape Town
354
286 410 443
86
Durban
448
291 868 032
69
g
214
338 904 177
3
Kimberley
212
58 664 392
1
Mmabatho
166
101 459 989
127
Mthatha
191
67 670 835
60
Nelspruit
205
136 342 263
108
Polokwane
199
121 508 759
113
Port Elizabeth
360
213 919 758
85
Pretoria
240
1 545 625 944
91
TOTAL
2 788
3 249 275 311
850
Johannesbur
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6 BIGGEST CLIENT DEPARTMENTS
Client Department
No of leases
Estimated Annual rental
payable
South African Police Services
1253
927 105 776
Labour
212
124 880 725
Defence and Military Veterans
203
218 980 561
Home Affairs
201
201 333 032
Correctional Services
192
85 713 722
Justice and Constitutional Development
126
250 128 176
Total for main clients
2 187
1 808 141 994
%’age to Total lease
78.4%
55.6%
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Scope of the Work and Expected Outputs
•
The required service is made up of three distinct phases for which
the bidders are requested to provide proposals.
•
The bidders’ proposals must distinguish the resources as well as
the costs associated with each of the phases.
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Scope of work (phase 1)
Audit of the Leases ( approximately 2 788)
(1) Procedures for the desktop audit of the lease files:
• Verify that there is a valid lease agreement in place for the premises;
• Whether the lease agreement is signed by both parties;
• Whether the lease agreement is DPW standard lease agreement, has
been modified or it’s lessor’s;
• If the bank account details changed since the inception of the lease
• of lease expiry;
• What process was followed to secure the lease (negotiated/
nominated/open tender etc) and reasons for the choice of process;
• What is the lease period;
• Escalation in the lease agreement;
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Scope of work ….(phase 1 )
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Whether Landlord is BEE compliant according to the Department’s BEE
Strategy;
Square meters occupied;
Verify information from Property Management Information System
(PMIS) with lease agreement including the rental amount and
descriptions;
All documents are in the file including lease agreement and
confirmation of client needs to procure the lease;
Confirmation of rental amount and tenant installations costs;
Verify if the rate per square meter charged in terms of the lease is
market related;
Whether the annual escalation rate is market related;
Whether the tenant installation is amortized into the rental;
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Scope of work.. (phase 1)
(2) Procedures for the physical verification of the leased premises
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Verify that the client is in physical occupation of the premises;
Approximate the square meters occupied;
Confirmation from user department for occupation.
(3) Lease Information System
– Reconcile the lease details (period; expiry date; rental; square
meterage etc) with PMIS system.
– Verify whether the current rental paid is in line with what the lease
stipulates;
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Scope of work (phase 2)
Immediate support to eliminate the current backlog of
the approximate 400 leases at various stages of the
lease process:
• Create a lease data base;
• Assess critical needs to deal with backlog and reduction of
month to month leases, renewal of leases that have
expired or about expire;
• Correct rates per square metre are market related rentals
(escalation, tenant installations etc. are in place);
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Scope of work….(phase 2)
• Submissions are in line with the Departmental policies and
procedures including the Supply Chain Management
Processes, Departmental BEE Strategy etc;
• Verification of the size of the accommodation required by
clients;
• Confirmation of Clients Needs Assessments and funds;
• Terms and conditions of the lease agreement are in favour
of the Department;
• Rates per square metre are market related rentals and
have been benchmarked outside the Department;
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Scope of work…..(phase 2)
• Escalation, tenant installations etc. are in place;
• Conclude an assessment and benefit received for
Operating Cost Charges;
• Be part of the advisory team to advice the Acting DirectorGeneral on the signing and approval of lease documents;
• Develop processes moving forward to mitigate the risk of
future backlogs arising.
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Scope of work ….(phase 2)
• Leases reaching expiry (approximately 700)
– Whether the client confirmed if they still need premises;
– Submission of Client Needs Assessment and confirmation
of funds;
– Procurement Instruction has been issued to the Regional
Offices;
– New Procurement processes have commenced if the client
still need accommodation.
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Scope of work (phase 3 : Stabilization)
Business Process re-engineering of the Lease Function:
• Review and align business processes and delegations;
• Shortcomings on the lease management process including
SCM in relation to leases, their root causes and economic and
service delivery impacts thereof;
• Alignment of existing Lease Management policies and provide
recommendation based on best practice (This includes the
lease agreement contract template);
• Review the current BEE Strategy and its implementation;
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Scope of work …. (phase 3)
• Draft recommendations for change and propose new operating
model for approval by the project steering committee;
• Review human resources structure and recommend a structure
relevant for the Lease Management function;
• Propose a change management plan;
• Review of Property Management Information Systems for
leases.
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Required Expertise of the Team
– Demonstrated experience in lease management and appropriate
contracting modalities;
– Demonstrated experience in Property Law;
– Demonstrated experience in best practice; Financial Management
and Property Management policies;
– Demonstrate knowledge of commercial property market structure
and economics;
– Demonstrated experience in data analysis and data mining and
knowledge of applicable tools;
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Required Expertise of the Team
– Understanding of facilitating business process improvement in
government;
– Understanding of Business support systems;
– Proven success in undertaking lease management and turnaround
functions;
– Change managements experience;
– Building of capacity in client departments;
– Demonstrated experience in specialised audits;
– Demonstrated experience in forensic data analysis and
investigation;
– Understanding of public sector programme evaluation;
– Understanding of public sector programme management.
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Contract period
– Phase 1 and phase 2 of the Lease Review and Improvement must
be executed simultaneously.
• Phase 2 of the project is targeted for completion by 30
November 2012
• Phase 1 of the project is targeted for completion by 30
December 2012
• Phase 3 is targeted for commencement in February 2013
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EVALUATION CRITERIA
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A two envelope system will be applicable with the technical
proposal and commercial proposal being in separate envelopes
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Evaluation criteria will be in two stages:
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STAGE 1: Functionality Criteria
Experience in lease contract management;
Qualification of the project team;
Relevant experience and expertise;
Strength of the proposal.
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STAGE 2: Short listed bidders will be evaluated on price and
preference, where price is 90 points and preference is 10 points.
Service providers may be requested to make presentations on their
proposals once shortlisted.
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EMPOWERMENT
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The National Department of Public Works is an equal opportunity,
affirmative action employer. In this light of this, the formation of
consortium or the inclusion of proposals on how this project can best be
used to further the broader aims of transformation is strongly
encouraged.
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CONFILCT OF INTEREST
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The consultant should not receive any remuneration in connection with
the assignment except as provided in the contract. The consultants
and its affiliates should not engage in consulting activities that conflict
with the interests of the client/principal under the contract, and should
be excluded from downstream supply of goods or construction works or
purchase of any asset or provision of any other service related to the
assignment other than a continuation of “service under the on-going
contract.
All landlords and brokers are excluded from tendering due to the
inherent conflict of interest that may exist should their services be
engaged.
Service Providers are required to declare in writing, as part of their
proposals submission, that they have no conflict of interest in acting for
the NDPW in this assignment.
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I
THANK YOU!
Questions!
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