FM Public Sector Market Update Q1 2021

FM Public Sector Market Update Q1 2021

Posted by Carla Rosch on 01-Jul-2021 17:45:00

This update was originally posted on the i-FM website [sign up here]. It is the first of our regular quarterly updates that we will be carrying out in partnership.

To download your free sample data of expiring FM contracts click here.

 

The UK government awarded 183 contracts relating to facilities management in Q1 2021, worth a total of £465m.

The Covid-19 pandemic had a significant impact in government FM spending throughout last year, as 9% fewer contracts were awarded in 2020 compared to 2019 and the value of these shrank by 40% to 649 contracts worth £2bn. 

However, by the end of the first quarter of 2021, the market was already showing signs of recovery, with a 45% increase in the value of contracts awarded in Q1 of 2021 compared to the same period last year.

Volume and value of contracts (£) awarded by quarter, 2020-21

Quarterly chart

Although Local Government issued by far the most FM contracts (88), it is public healthcare that amasses the biggest contracts in terms of value, with a total of £329m.

Value (£) and volume of contracts awarded by contracting authority type, Q1 2021

Supplier horizontal chart FM

The top contract was Covid-19 Testing Site Facilities Management, for £221m awarded by the Department of Health and Social Care to Sodexo on 13/01/2021 to support the rapid set-up and operation of testing sites at various locations across the UK, as part of the government's pandemic response. The main FM services included are site management, security, patient traffic control, cleaning and the management of all site infrastructure and consumables.

Value (£) and volume of contracts awarded by suppliers, Q1 2021

Top Suppliers FM Q1 2021

Opportunities

The number of Prior Information Notices (PINs) published has increased steadily each month so far this year, reaching 37 in Q1 2021. While many of these notices do not specify the contract value, they have a collective total of at least £329 million.
 

Value (£) and volume of Prior Information Notices by month in Q1

PINs Q1 2021 FM

For example, the Door Entry, Access Control System and CCTV Systems Framework PIN published by Efficiency East Midlands was published in March, with an open deadline. Even if you have missed the pre-engagement, it is still worth keeping an eye out for the tender, as the framework could publish up to £250m in contracts.

Looking forward

£274m worth of contracts will expire in Q1 of 2022. It is likely most of these will be re-tendered, leaving enough time to prepare before they are published.

Value (£) of contracts by end date

Expiring awards FM Q1 2021

Defence has £91m worth of contracts expiring in the first quarter of next year, with local and central government each at £77m. Together, they account for nearly 90% of the value of contracts that will expire in Q1 2022. The top three expiring contracts are worth nearly £155m:

Top awards FM Q1 2021

The Ministry of Defence has a large contract expiring in Q1 2022 which it awarded to Sodexo in 2016, for facilities management services including catering, building and window cleaning services, refuse and waste-related services, hotel accommodation services, laundry management and tailoring services. 

Elsewhere, the Cabinet Office published a Procurement Policy Note (PPN 05/21) in early June establishing reporting changes in public procurement that will affect all contracting authorities by April 2022 spending over £200m and by April 2023 spending over £100m per year. Buyers will need to consider the National Procurement Policy Statement when undertaking procurements, so that the wider social benefit of government spending is factored in. 

Additionally, the contracting authorities that qualify for these new regulations must publish procurement pipelines and benchmark their procurement capability. Read more about this here.

As companies prepare for an increase in public contracts, understanding the public sector market analysis will be key to better planning and management of the flow of demand. 

Download a sample of the data used for this report here.