challenges in implementing performance-based …jpak.jkr.gov.my/document/files/demo dokumen/ibex -...

CHALLENGES IN IMPLEMENTING PERFORMANCE-BASED CONTRACTING

IN MANAGING BUILDING FACILITIES

Case Study Bangunan Sultan Iskandar (KIK) & JB Sentral

10 September 2015

Asset & Facility Management Company

Bangunan Sultan Iskandar & JB Sentral

Abraj Al Bait Towers, Makkah

Design and Build Contractor

Gerbang Selatan Bersepadu Project

Medium Term Link

Special Purpose Vehicle (Developer)

Universiti Al-Azhar Kampus Tuanku Muhriz

Gerbang Pendidikan Seri Menanti

Customs, Immigration & Quarantine Complex (Bangunan Sultan Iskandar)

Bukit Chagar, Johor Bahru

The Abraj Al Bait Towers Makkah, Kingdom of Saudi Arabia

Gross Floor Area: 2.95 mil sq.ft (273,600 sq.m)

Gross Floor Area: 16 mil sq.ft (1.5 mil sq.m)

AMPM CURRENT PROJECTS

Customs, Immigration & Quarantine Complex (Bangunan Sultan Iskandar), Bukit Chagar, Johor Bahru

Building Owner : Bahagian Pengurusan Hartanah Jabatan Perdana Menteri Government’s : Jabatan Kerja Raya Malaysia Representative Gross Floor Area : 2.95 mil sq.ft (273,600 sqm) Building Function : Customs, Immigration and Quarantine Complex (non-stop operations) Building Classification : Building Security Category 1 Number of Agencies : 22 agencies Number of Users : 100 million users per year 135,000 vehicles daily

ABRAJ AL BAIT TOWERS (DEVELOPMENT OF KING ABDUL AZIZ ENDOWMENT - DOKAAE)

Building Owner : Government of Kingdom of Saudi Arabia

Concessionaire : Saudi Binladin Group (SBG)

Facility Manager : Alborj International for Operation & Maintenance (with AMPM as the FM Consultant & Support Services Provider)

Gross Floor Area : 16 mil sq.ft (1.5 mil sqm)

Building Mix : a) Residential b) Hotels c) Clock Tower d) Offices e) Retail Shops f) Restaurants g) Auditorium h) Car Park

District Cooling Plant : 48,000 tons refrigeration

Capacity : 80,000 pilgrims

RANGE OF SCOPE OF SERVICES “ AMPM Offers Integrated & Comprehensive Asset & Facility Management Services ”

Civil, Structural, Architectural,

Mechanical, Electrical, ICT and Custodial Services.

ENERGY MANAGEMENT SERVICES

The Energy Management Services (EnMS) Division offers:

• Qualified and Registered Energy Manager

• Compliance on Energy Act, Regulations & Certifications

• Energy Audit & Conservation Study

• Investment Grade Energy Audit

• Implementation through energy services company (ESCO)

• In-house Energy Management Implementation & Assistance

• Demand Side Management

• Renewable Energy

• Condition Based Monitoring, Energy Measurement & Verifications

• Independent Audits

CASE STUDY

Introduction

• KIK Facility Management Contract was the first outsourced

Performance-Based Contracting implemented by the Government

(June 2007 - November 2013) followed by JB Sentral Facility

Management Contract (January 2009 - May 2013).

• Being a new contracting approach, Government’s representatives (JKR)

and Contractor (AMPM) experienced differences in the interpretation of

the contracts terms.

• The state of readiness in managing PBC was not in place – standard

documents such as JKR66, PHK, PPJHK, etc. still using existing formats

for other standard contract formats i.e. JKR203A, JKR203 and not

specifically designed for FM.

KONTRAK PENGURUSAN FASILITI KOMPLEKS KASTAM, IMIGRESEN DAN KUARANTIN (KIK) & JB SENTRAL

CONTRACT BRIEF

Objectives of FM Contracts as stipulated in the Contract:-

• KIK - To outsource the Centralised Operation & Maintenance

Management of CIQ Complex

Form of Contract - Facility Management Contract (2007)

Described in Appendix 5 (Section A)

• JB Sentral - To outsource the Management, Operation and

Maintenance of Bangunan JB Sentral

Form of Contract - PWD Facilities Management Form (2008)

Described in Appendix 3 (Recital C of Contract)


CONTRACT BRIEF

Performance Based Contract Type (Not traditional task based)

• KIK Contract [Clause 3.3 – Contractor’s performance to the

satisfaction of the P.D]

“The Contractor shall perform the Contract to the satisfaction of

the P.D. in all aspects, as set out in the Contract, including

meeting the KPI”.

• JB Sentral [Clause 8.1 – Level of Performance]

“The Contractor shall perform the Services according to the

provision of this Contract and comply with the standard

specified in the KPI provided in Appendix 5 …”.


CONTRACT BRIEF

Definition of KPI

• KIK - Clause 1.1 (v) & 13.1 (a) of COC

“means the performance and work standards in Section A of Appendix

5 that are required to be achieved by the Contractor under this

Contract. The KPI may be altered in accordance with the Contract.”

• JB Sentral - Clause 1.1 & 8.1 of the COC

“means the performance and standards for Services as specified in

Clause 8.1 and Appendix 5 that are required to be achieved by the

Contractor under this Contract;”


CONTRACT BRIEF

Contract Sum

• KIK - Clause 2.3 of the COC

“The Contract Sum shall be a firm and fixed price for the Contract

Period and shall not be adjusted or altered in any way otherwise than

in accordance with the express provisions of this Contract.”

• JB Sentral - Clause 2.2 of the COC

“The Contract Sum shall be a firm and fixed price for the Contract

Period and shall not be adjusted or altered in any way unless

expressly provided in this Contract.”


CONTRACT BRIEF

Performance-Based Contract (not traditional task-based)

• Risks fully rest on the Contractor to ensure that the agreed KPIs are

achieved.

• Contractor bears all/any additional costs incurred over and above his

planned resources and budget to meet the set KPIs.

• General provisions of discretion by the Government to instruct Contractor to

update, maintain and amend the Maintenance Schedule is for the purpose

of complying with KPI.

• If KPI is achieved, no expressed provision for the Government to interfere

with Maintenance Schedule

• If KPI is met and services/resources input requirement is less than his

planned resources and budget, Contractor benefits the cost savings (if any);

• If KPI is met - no expressed provisions that Contractor is obliged to return

any savings to the Government or deductions for reduced resources input.


KIK Contract’s KPI ( page 1 of 2 )

NO. SERVICE

DESCRIPTION

PERFORMANCE

MEASUREMENT TARGET VALUE

1 Overall Service

Delivery

Customer

Satisfaction Customer Satisfaction Survey = 3.0*

2

General Complaint

on Service

* All services

including cleaners

User General

Complaint

Maximum total of 32,004 per month for all services.

• ICT 10,668

• BMM 10,668

• SS 10,668

Total 32,004

3

Attending to

General Service

Complaint

Response Time

Minimum percentage of Work Order responded within 30 minutes as per below services:

• ICT 75% • BMM 75% • SS 70%

4 Resolving General

Service Complaint Turnaround Time

Max 25% incidences of un-close work order from total work order in the same month.

• ICT 25% • BMM 25% • SS

5

Availability of

Major system

in each services

Service Downtime

Max 25% downtime of major system in services hour per month [hour/month]

• ICT 25%

• BMM 25%

• SS

NO. SERVICE

DESCRIPTION

PERFORMANCE


6 Emergency

Service Request

Emergency

Response

Min 70% Emergency Service per allowable complaint responded within 15 minutes

• ICT -

• BMM -

• SS 70%

7

Recurring Complaint

on Attended

Work Order

Recurring Complaint

on Resident User

General Complaint

Maximum percentage of incidences from total Work Order per month as per below services:

• ICT 25%

• BMM 25%

• SS 30%

8

Quality of

Service Delivery

or Workmanship

Unsatisfied

Work Rating on

Resident User

General Complaint

Max 15% incidences of total Work Order per month per services

• ICT 15%

• BMM 15%

• SS -

9

Execution of

Planned Preventive

Maintenance

according to

schedule

Execution of

Planned Preventive

Maintenance

Min 80% execution according to schedule per major services

Total PM

Schedule

• ICT 80%

• BMM 80%

• SS -

KIK Contract’s KPI ( page 2 of 2 )

NO SERVICE DESCRIPTION PERFORMANCE

MEASUREMENT

TARGET VALUE

(KPI)

1 Overall Service Delivery Customer Satisfaction Customer Satisfaction

Survey

2

Availability of All Management, Operation and

Maintenance Services and System in Form of

Written Reports Officially Submitted

Availability of Weekly, Monthly,

Half Yearly and Yearly Reports

100% Compliance

to Submission Date

3 Complaint on Services

Resident Users Complaint

Public Complaint

Zero Complaint

4 Resolving Custodial Service Complaint Execution Time Within 24 Hours

JB Sentral Contract’s KPI ( page 1 of 4 )



(KPI)

5 Recurring Complaint on Attended Work Order Recurring Complaint Zero Recurring Complaint

6 Effectiveness of Customer Care Centre Regarding

Request and Complaint Response Time

EMERGENCY ***

Immediate response with 15

minutes follow up time.

URGENT****

Response within 15 minutes

with 1 hour follow up time.

GENERAL *****

Response within 30 minutes

with 24 hours follow up.

7 Availability of Major Services e.g. Air-Condition,

Power Supply and Water Supply Continuous Service

Zero Downtime

of Major Service

8 Availability Of Comfortable Working Environment Air-Conditioning Temperature

24°C ± 1°C DB, RH 55 to 70% 100% Compliance



MEASUREMENT

TARGET VALUE

(KPI)

9 Execution of Planned Preventive

Maintenance as per Schedule

Execution of Planned

Preventive Maintenance

100% Execution

According to Schedule

10 Execution of Corrective Maintenance Execution Time

EMERGENCY ***

Immediate response,

rectification time within 3 hours.

URGENT****

Response within 30 minutes,

rectification time within 24 hours.

GENERAL *****

Response within 1 hours,

rectification time within 3 days.

11 Quality of Service Delivery or

Workmanship Satisfactory Executed Work 100% Compliance

12

Compliance to Statutory Requirement

All Systems are Operated Correctly

All Appropriate Plants,

Equipment's and Structures

Shall Comply with the Relevant

Statutory Inspections Schedule

and Operating Requirements

100% Compliance



MEASUREMENT

TARGET VALUE

(KPI)

13 Provide Spares Necessary

to Allow the Buildings to Function

Availability of ALL Spares

at ALL Time

There shall be no disruption

due to lack of spares

14 Develop, Manage and Maintain

a Technical Library

Technical Reference Materials,

Operation & Maintenance Manuals,

As Built Drawings and Data Sheets

are Available for Use at All Times

All Reference Materials,

Operational & Maintenance

Manuals, As Built Drawings and

Data Sheets are Current,

Relevant and Up to Date

15 Energy Management

and Conservation

Implementation of

Energy Management and

Conservation Program

Yearly Energy Audit Report,

Monthly Building Energy

Performances

Energy Management and

Conservation Committee

Submission and Verification of

Yearly Audit Reports, Target and

Presentation to PD / SO


ITEM DESCRIPTION PERFORMANCE

MEASUREMENT

TARGET VALUE

(KPI)

1A

Planned Preventive Maintenance for

Civil & Structure, Housekeeping,

Landscaping & Pest Control

Scheduling, Scheduled Corrective

Maintenance

Completion of monthly PPM

for Civil & Structure 100% Completion

1B Completion of monthly Housekeeping,

Landscaping & Pest Control Scheduling 100% Completion

1C Completion of Scheduled

Corrective Maintenance 100% Completion

2A

Service Requests

Response Time by

Appropriate Personnel

General: 30 minutes

Urgent: 15 minutes

Emergency: < 5 minutes

2B Execution Time

General: 3 days

Urgent: 24 hours

Emergency: 3 hours, except

Lift Entrapment: < 15 minutes

3 Customer Satisfaction Customer Satisfaction Customer Satisfaction Survey

(Quarterly) ≥ 3

4 Complaint on Services Resident Users Complaint

Public Complaint ≤ 10 No. of Complaint

5 Recurring Complaint

on Attended Work Order No. of Recurring Complaint Zero Recurring Complaint

Current Contract – BSI Contract’s KPI ( page 1 of 2 )

ITEM DESCRIPTION PERFORMANCE MEASUREMENT TARGET VALUE

(KPI)

6 Quality of Service Delivery

or Workmanship

Satisfactory

Executed Work 100% Compliance

7A

Reports

Timely Submission

of Reports

100% Compliance

to Submission Date

7B Accuracy of Reports ≤ 40 No. of Statistical Error

8 Injury due to

Improper Maintenance

No. of Incident due to

Improper Maintenance Zero Incident

9 Toilet Supply Availability

During Office Hours

100% Available

During Office Hours

10 Toilet Asset

Asset Functioning /

Good Working Condition / Meet

Specification

at All Times

100% Available

at All Times

Current Contract – BSI Contract’s KPI ( page 2 of 2 )

No Adjustment Provisions Clause

KIK

a) Interpretation – Reduction in cost of performing the Contractor’s

obligations due to ambiguity, discrepancy and/or inconsistency

“…deducted accordingly from the Contract Sum.”

1.4

b) Variation (Adjustment of Contract Sum) – upon determination

of the valuation of variation by way of addition or deduction

17.5

JB Sentral

a) Resolution of ambiguities, discrepancies and/or inconsistencies

“…deducted accordingly from the Contract Sum.”

1.4

b) Variation (Adjustment of Contract Sum) – upon determination

of the valuation of variation by way of addition or deduction

25.5

Expressed Provisions to Adjust Contract Sum


No. Deduction provisions Clause

KIK

i) LAD deduction, if Contractor fails to meet KPI –

[as per Appendix 5]

13.2

ii) Default in insuring – Government takes over 21.2

iii) Incompliance with SOCSO Registration – Government

takes over

21.3

iv) Contractor is in default - Government’s right to step in to

carry out services – Government takes over

24.1 (g)

v) Right to deduct monies under the Contract or any other

Contract which the Government and the Contractor are

parties (set off provision)

31.1

vi) Termination - 34.1(d), 35.1 & 36.3

Expressed Provisions for Deductions Under the Contract


No. Deduction provisions Clause

JB Sentral

i) APD deduction, if Contractor fails to meet KPI –

(as per Appendix 5]

8.2

ii) Default to obtain license – Government takes over 24.1

iii) Right to deduct monies under the Contract / any other

Contract which the Government and the Contractor are

parties (set off provision)

27.1

v) Auditing by the Government – Government takes over 30.2

vi) Termination - 31.1 (d), 31.2(c), 32.2 & 33.3

vii) Continuous default or defaults that affect national

interests, risk to safety & health etc - Government rights

to step in to carry out services – Government takes over

34.1(g)

Expressed Provision for Deductions Under the Contract


No Deduction provisions Clause

KIK

a) Monthly Scheduled Interim Payment Certificates * (MSIP)

Contractor’s defaults

Advance Payment

Variations

“Any other deductions” under the Contract not covered in b, c, d

Errors (corrections/adjustments from previous MSIP)

28.3 (a)

28.3(b),

28.3(c),

28.3(d),

28.3(e),

28.3(f)

* “ The Parties agree that P.D shall be entitled to revise or amend

the amount of the MSIP set out in Appendix 10 provided such

revision or amendment does not alter the total amount of the

Contract Sum (including additions / deductions in accordance

with this Contract) that is payable to the Contractor pursuant to

this Contract”.

28.6

(Para 1)

b) Final Certificate subject to Clause 25 (Unfulfilled Obligations) &

other deductions authorized under the Contract

29.2

Provisions to Effect Deductions Under the Contract

(based on Permissible deductions of specified provisions)


No Deduction provisions Clause

JB Sentral

a) Monthly Scheduled Payment Certificates ** (MSP)

Contractor’s defaults including any APD

Variations

“Any other deductions Government entitled under this

Contract not covered by b, c and/or d

26.3 (a)

28.3(b),

28.3(c)

28.3(d)

** “The Parties agree that the P.D/S.O shall be entitled to

revise or amend the amount of the MSP set out in

Appendix 6 where in the opinion of the P.D/S.O the

Contractor fails to comply with the KPI”.

26.6

(Para 1)

b) Final Certificate subject to Clause 29.2 (Unfulfilled

Obligations) & other deductions authorized under the

Contract

28.2(a)

Provisions to Effect Deductions Under the Contract

(based on Permissible deductions of specified provisions)


CLAUSES REFERRED BY JKR IN EFFECTING DEDUCTIONS

Contract Sum

• KIK & JB Sentral - Clause 2.1

“For the consideration mentioned in Clause 2.2, the Contractor shall carry

out the Services in full compliance with the terms and conditions of this

Contract.”

• KIK & JB Sentral - Clause 2.2

“The Government hereby covenants to pay the Contractor the sum of ….

or such other sum as shall become payable hereunder at the times and in

the manner specified in this Contract in consideration of the Contractor

performing the services in full compliance with the Contract…”



Issue of Monthly Scheduled Interim Payment Certificates

Clause 28.3 (KIK) / 26.3 (JB Sentral)

“The PD shall within 28 days upon receipt of an application for a Monthly

Scheduled Interim Payment ... make a valuation … and issue a Monthly

Scheduled Interim Payment Certificate to the Government … stating the

amount (if any) due … after taking into account the following matters:

• KIK - Clause 28.3 (e)

“the amount of any other deductions from the Contract Sum that the

Government is entitled to make under the Contract that are not

covered by the provisions in Clause 28.3(b), (c); and/or (d);”

• JB Sentral - Clause 26.3 (d)

“the amount of any other deductions from the Contract Sum that the

Government is entitled to make under the Contract that are not

covered by the provisions in Clause 28.3(b), (c); and/or (d);”



General Requirements

• KIK – Item 3.6 of the Government General Requirements

“The contractor shall carry out the total comprehensive maintenance of

the Services as detailed in the Scope of Works … and in the General

Requirement incorporating the Specifications for the respective Services.

The term comprehensive maintenance shall include all aspects of

preventive, predictive and corrective maintenance, condition monitoring,

inspection, servicing, repair and replacement, supply of consumables or

upgrading all services, equipment, facilities, fittings and fixtures including

external works and landscaping. The FMC shall propose and follow the

preventive schedule maintenance as mentioned in the specification.”



General Requirements

• JB Sentral - Item 3.0 (b) of the Technical Specifications

“The scope of work shall include management, operation and

maintenance services to be delivered in relation to the Asset and are

described … includes the following:

(i) the required performance from the management of the FM Services

(ii) the required service levels during the management of the FM Services; and

(iii) the performance indicators that shall be used to assess the Contractor’s

performance.”



Documentations for Monthly Monitoring and Contracts Administration

Corporate Office MALAYSIA : 3, Jalan 222, Petaling Jaya 46100, Selangor, Malaysia T. +6 03 7957 8890 F. +6 03 7957 0931 Operations Office MALAYSIA : Level 4, North Wing, Bangunan Sultan Iskandar Jalan Lingkaran Dalam, 80300 Johor Bahru, Johor, Malaysia T. +6 07 218 8181 F. +6 07 226 8010 Operations Office KINGDOM OF SAUDI ARABIA : Level P4, Abraj Al Bait Towers Development of King Abdul Aziz Endowment Makkah, Kingdom of Saudi Arabia T. + 966 12 571 9191 F. + 966 12 571 8428

challenges in implementing performance-based …jpak.jkr.gov.my/document/files/demo dokumen/ibex -...

Documents