Market Testing: Getting It Right

OK – you’ve decided that you’re going to market test one or more of your FM services (if you’re not sure that this is the right thing to do – and it may not be - then go back and have another look at Part 1 of this series). How do you ensure a successful outcome?

Knowing what it is that you want to achieve will help greatly – and how it differs from the status quo. That can all be documented in a service specification against which potential suppliers can bid. It can sometimes be a delicate balance between all the competing stakeholders – finance, the Trust board, staff, those who actually receive the service and those in Estates & Facilities responsible for overseeing the delivery – and that’s where some impartial support can be invaluable. We also have seen cases where the negative opinions of the current service have clouded the expression of future service requirements or the exercise has turned into a service user’s wish list. Again, independent support(such as that offered by GK Transformation) can help negotiate to a position where the specification captures the service requirements at a cost the Trust can afford.

The next stage is just as critical and too often rushed or given too little attention: How do we evaluate bidders responses and proposals against the specification? At the highest level, there is usually a split to be made between (lowest) cost and (highest) quality – with numerical scores required for both. Superficially, it may appear easier to assign a score to a cost – it is after all just a number. However, contacts are rarely fixed price – therefore, some consideration needs to be given to evaluating those not-so optional extras and variation costs. Again, a professionally-written specification can comprehensively capture requirements, and known variables, to minimise the need to negotiate later from a weak position with an entrenched contractor. Over the years, GK Transformation have seen (but not used) attempts to manipulate tender return costs, through such mechanisms as “ceiling prices” or mathematically discontinuous payment mechanism functions, many of which have had disastrous outcomes for both the Trust and the contractor. Far better to estimate the expected cost (if you’re not confident of this, you shouldn’t be outsourcing!) and develop a scoring mechanism that gives a reasonable spread of marks around this figure.

Evaluating quality in numerical terms is quite an art. But in practice, it all comes down to risk – or confidence. If we appoint X as contractor, what are the chances that they will fail to feed a patient the right meal at the right time – or undertake the scheduled water safety check-list for that little-used shower?

Trusts frequently choose criteria that reflect specific historical problem areas. While this may have some validity, depending on the specific operational environment, it would be better to put together an optimised set of criteria designed to examine how the contractor will ensure the services are delivered to specification.

So, bringing the financial and quantitative quality scores together should give you the result that you’ve picked a contractor you can afford and one who can deliver the service to the level you need. Finally, the sales pitch: Can GK Transformation help you through this process? Yes we can, and have done so for numerous clients over the last 25 years. If you want to know more about our quarter century of success, give us a call.

In the next part this series, we’ll look at Market Testing as a project, and the timescales and milestones along the way.