Outsourcing is a form ofalternative service delivery(ASD). Last year BCBC made acommitment to Government’sCore Services Review andDeregulation Task force toexplore ASD and increase theuse of the private sector forservice delivery.

The Property ManagementOutsourcing Project currentlyunderway helps BCBC achievethose commitments and will beginto transform BCBC into the futurecorporation that was envisioned bysenior management and the Boardduring preparations for the CoreServices Review.

The organizational redesign thatwas completed this spring; alongwith the changes anticipated

through the business processreviews (implementation beginningthis summer), and the potentialoutsourcing of PropertyManagement, will mean thatBCBC will become an organizationthat is:

• more flexible and responsive tocustomer needs;

• focused on building its businessin strategic advisory services toministries and the broaderpublic sector;

• a partner with the privatesector to serve public sectorneeds, and

• a leader in the stewardship ofreal estate assets on behalf ofGovernment.

Property Management wasidentified as the mostappropriate candidate foroutsourcing because it met the following criteria:• There are adequate suppliers of

property management services inthe marketplace

• The service will be ongoing andrequired over the long-term

• Customer expectations of qualityand choice standards can be met

• The service can be readily bundledinto an appropriate outsourcingopportunity on either a regionalor provincial basis

• Successful outsourcing of theservice has been provenelsewhere

• Outsourcing causes minimaladditional risks for theCorporation/Shareholder

• There should be minimal impactto BCBC employees

If outsourcing of PropertyManagement proves viable and acontract(s) is awarded, there ispotential to realize ongoing savingsand continue to reshape theorganization to support its shift infocus to providing strategicadvisory services to ministries andthe broader public sector.

Why Property Management?

Buildings Post

Property Management Outsourcing Project

JUNE 2003The Outsourcing Project

Special Edition

“BCBC

will evolve

into an organization

that uses its knowledge

resources to interpret

customers’ needs and

design strategic

solutions that work.”JJoohhnn BBeeaalleess

The ProcessInitially in 2002/03, BCBC began by exploring alternativeservice delivery through a series of pilots.However, it became evident that if BCBC were to deliver on itscommitments in time to report back to the Core Services and DeregulationTask Force, a different approach was required. The Property ManagementOutsourcing Project will incorporate the information gathered and, whereapplicable, the lessons learned through the earlier pilot projects.

The added advantage of a tighter timeline is that employees will knowmuch sooner about the impact that alternative service delivery might haveon their work and future roles/responsibilities at BCBC.

The objectives of the Property ManagementOutsourcing Project are to:

• deliver on BCBC’s commitment to Government topursue alternative methods of service delivery;

• meet and, where possible, exceed customers’ servicequality expectations;

• provide customers with the most cost-effective,flexible and efficient property management services;

• enable BCBC to focus its efforts on providing strategicadvisory services to customers as a strengthenedshared services provider;

• allow BCBC to realize internal cost savings;

• minimize BCBC’s costs related to the acquisition andmaintenance of property management relatedinfrastructure;

• minimize impact on BCBC employees;

• enable BCBC and the service provider(s) to expand anddevelop new public-sector clients and business in theprovince, and

• encourage value-added benefits for the Province.

These objectives will help to shape the criteria used toevaluate the proposals submitted at the Request ForProposal stage (RFP).

The Project

Objectives

T H E O U T S O U R

Board

Executive Sponsor - Sharon Halkett

Deal /Corporate StructureS. Bartos

ProjectManager

Rick Steele

SeniorAdvisor

Colin Ewart

Legal/ Risk Mgmt.Scott Bartos

T i m e l i n e

Outsourcing Project Governance

STEERING COMMITTEE

WORKSTREAMS

VendorSelection/

NegotiationS. Halkett

PM OperationalAnalysisT. Gagne

Transition &Contract Mgmt.

B. Atchison

RFQ/RFPProcess

J. Veenema

HRStrategyB. Clow

BusinessCase

D. Larusson

Stakeholder Relationships/CommunicationsC. Ewart

Corporate CoordinationM. Pucsek, Customer; J. Meredith, Energy & Environment; C. Turner, IT; I. Maitland, Pricing; D. Wilson, Leasing;

W. Ford, Real Estate; T. Young, Portfolio Management

AdvisorsOutsource Process – D. Jeffreys; Change Mgmt. – D. Harker; Fairness Monitor – G. Macauley; Special Advice – HR/IT/Corporate

2. Request for Qualifications (RFQ)

2. Request for Qualifications (RFQ)Closed May 30, 2003

The RFQ is intended to identify and create ashortlist of qualified parties. Interested partiessubmitted a written response demonstratingtheir qualifications for evaluation on a numberof criteria specified in the RFQ includingexperience, financial viability andcommitment. An evaluation committee,established by BCBC, will evaluate theresponses.

3. Draft Request for Proposal (RFP)3. Draft Request for Proposal (RFP)June/July, 2003

The short-list of candidates that qualified in the previousstage (RFQ) will be invited to participate in the draft RFP. This process allows the short-listed candidates to providefeedback on the proposed RFP, allowing for furtherrefinements to the RFP and potential contract terms.

1. Request for Expressionsof Interest (RFEOI)

1. Request for Expressionsof Interest (RFEOI)Closed April 25, 2003

This initial stage signaled to themarketplace BCBC’s intent to examinethe viability of outsourcing its propertymanagement services. This step did notqualify parties and there was noobligation to submit a response. However,interested parties could respond byconfirming their general interest in theProject. Twenty-seven formal responsesto the RFEOI were received.

CEO

Co-Executive Sponsor - Barry Herring

Finance

C. Paterson

ExecutiveCommittee

C I N G P R O J E C T

Who’s Involved?Internal teams are managing the OutsourcingProject. This will help to facilitate the tight timelineand ensure that the people who know the business bestare the ones responsible for designing a partnershipwith a potential outsource provider(s) that meets all ofBCBC’s requirements.

The project is governed by a steering committee andsupported by a number of work stream teamscomprising representation from across the Corporation.The steering committee has retained consultants withspecialized expertise to assist with the work (e.g.fairness monitor, outsource process, etc.)

2 0 0 3 - 2004

4. Request for Proposal (RFP)

4. Request for Proposal (RFP)August, 2003

The RFP is issued only to the short-listed candidates and is intended toelicit formal proposals for theprovision of property managementservices. The RFP step will involvepresentations, information sessions,interviews and reference checks.

5. RFP Closes5. RFP ClosesOctober, 2003

BCBC will establish an evaluationcommittee to evaluate the proposalssubmitted against the criteria in theRFP.

6. Award6. AwardFall, 2003

If a successful proponent(s) isidentified, BCBC and the newprovider(s) will complete final duediligence activities and negotiatefinal contract terms.

7. Roll-out7. Roll-outWinter/Spring,2003/04

This stage begins after BCBCand the new provider(s) signthe final agreement. It isexpected that the transitionof property managementservices from BCBC to thenew provider(s) could takeuntil early in the new year(2004).

Work Streams/TeamsDeal/Corporate StructureLeads the due diligence work on behalfof BCBC. The workstream will beinvolved throughout the RFP process toassist with the development of businessterms that meet BCBC’s objectives.

Business CaseWorks closely with KPMG, BCBC’sconsultant on the outsource process, to develop the business case which willhelp BCBC determine the viability ofoutsourcing property managementservices.

FinanceWorks with each of the other teams andprovides advice to the steeringcommittee about the financial impact ofthis project on BCBC. It also leads thedevelopment of a new financial modelwhich will determine how BCBC willoperate if Property Management isoutsourced.

HR StrategyResponsible for negotiating andimplementing the employee transferbetween BCBC and the potentialoutsource provider(s). This team will alsodevelop the overall human resourcesstrategies around people transitions.

RFQ/RFP ProcessManages the procurement processensuring that: the various steps in theprocess are followed; respondents’questions are addressed; the responsesmeet the mandatory criteria, and thatcommunications with respondents isappropriate and thorough. This teamalso drafts the Request for Proposal(RFP) with input from otherworkstreams.

VendorSelection/NegotiationResponsible for identifying the membersof the team that will evaluate theproposals submitted, using the criteriadeveloped in consultation with the otherworkstreams. Final contract negotiationswill also be led by this group.

Property ManagementOperational AnalysisDescribes the current delivery structure,and the process and deliverables for theservices potentially outsourced. Thisworkstream will also provide input onthe criteria to be used in the RFP.

Transition and ContractManagementResponsible for managing the workrelated to the transition of propertymanagement services to the successfulproponent(s). This team will alsocontribute to the development of thefuture contract management framework.

Stakeholder Relationships/CommunicationsStakeholder (e.g. customers, suppliers)engagement strategies that allowstakeholders to have input into the RFPwill be developed by this workstream.The workstream is also responsible forensuring that all stakeholder groups,including employees, receive timely andaccurate information about the process.

Corporate CoordinationProvides analytical support and adviceto the project as required.

AdvisorsBCBC has retained a number of advisorswith specialized expertise:

Outsource Process (Diane Jeffreys,KPMG) to provide advice on the overallprocess, business case development andhelp BCBC ensure it meets all duediligence requirements.

Change Management (Darryl Harker,Strategy One) to provide strategic adviceregarding change management andtransition.

Fairness Monitor (George Macauley,Independent Consultant) to provideadvice about the fairness andtransparency of the process to allstakeholders.

Additional advisors may be retained atlater stages of the process as required.

BCBC

will become

an organization that is

more flexible and responsive

to customers

needs.

The Outsourcing Project

CustomersBCBC has advised its customers that it is confident thatemployees will do their best to keep customers’ needs inthe forefront as this project unfolds. For their part, ourcustomers understand BCBC’s need to explore the potentialof outsourcing Property Management and are interested tosee where the process leads us.

Over the next few weeks, BCBC will continue to engagecustomers, at various levels, in a process that will allow them tohave input to the Request for Proposal (RFP). The objectives ofthis process are to ensure that customers’ current needs areaccurately reflected in the RFP, and that their anticipated futureneeds are registered, to allow potential outsource providers tobetter understand the changing requirements of our customers.

BCBC will continue to communicate with customers at all levels.It is important that everyone at BCBC do their part to provideaccurate information to customers about this process andcontinue to demonstrate our commitment to excellence incustomer service.

SuppliersIn April, current BCBC suppliers received the first ofseveral planned letters aimed at keeping them informedthroughout this process (letters to both our suppliers and customers are posted on BCBC’s intranet site at:http://corp.bcbc.bc.ca/organizational_redesign/). Giventhat the primary responsibility of a potential outsourcer(s)would be to manage a large number of smaller contracts onBCBC’s behalf, we anticipate that by and large, there will belittle impact on the supplier community.

Between now and the potential contract award to an outsourcesupplier(s), it is business as usual, with BCBC continuing to useits standard procurement management processes.

EmployeesOne of BCBC’s primary objectives through this process isto limit the impact of an outsourcing arrangement onboth customers and employees. The best way to achievethat objective is to successfully negotiate a transfer ofProperty Management staff to the potential outsourcesupplier(s).

That negotiation process does not officially begin until potentialoutsource suppliers are identified, however, BCBC has signaled itsintent to transfer employees in both the RFEOI and RFQ. Studiesof public and private organizations that have outsourced indicatethat the transfer of included and excluded employees is commonpractice.

BCBC continues to meet with union representatives to shareinformation and keep the BCGEU involved in the process. As more information becomes available, employees will be updatedthrough email (d.all) and staff meetings.

For up-to-date information on this project and the other changes happening at BCBC, visit BCBC’s intranet site and click on Organizational Redesign.

Transparency and Fairness

Transparency and fairnessTransparency and fairness are critical throughout this process.Potential proponents (outsource providers who participate in thisprocess) will all have equal access to information about BCBC.BCBC must ensure that no proponent receives special ordifferent information during this process.

To ensure that proponents are treated equitably, BCBC hasestablished a communications protocol. All inquiries related toany stage of this process must be referred to John Veenema,Purchasing Manager at (250) 952-8336 or email:purchmgr@bcbc.bc.ca

Any of the information contained in “public” documents (e.g.this newsletter, vendor letter, customer letter, RFEOI, RFQ) maybe shared with anyone who is interested. General information isalso available on BCBC’s website: www.bcbc.bc.ca

During the draft RFP stage a data room will be established atBCBC’s head office so pre-qualified proponents have equalaccess to detailed information about BCBC’s PropertyManagement services. In addition, at a later stage, potentialproponents may also choose to visit selected BCBC properties,accompanied by Property Management Outsourcing Projectteam members.

Please keep in mind that the Property ManagementOutsourcing Project is a competitive procurement process. Aswith all competitive procurement processes, some informationwill need to remain confidential. There will come a time whenthe details of the negotiation process cannot be discussed. It isimportant to remember however, that BCBC is dedicated toachieving the objectives set out for this project and committedto follow the process outlined in the RFQ.

ResearchMuch research has already gone into investigating thepros and cons of outsourcing, and work will continuethroughout the process. Lessons learned from BCBC’s pilotprojects, along with research completed on experiences inother countries and organizations, including AlbertaInfrastructure, Ontario Realty Corporation, US GeneralServices, UK Office of Government Commerce, AustraliaDepartment of Finance, New Zealand, Canadian ImperialBank of Commerce and Canada Post and Public Works andGovernment Services Canada, will be utilized during BCBC’soutsourcing project.

In addition, prior to starting this project, BCBC met informallywith a number of large private sector organizations that havesuccessfully taken on outsourcing projects on behalf oforganizations like ours. These meetings offered suggestions aboutbest practices in property management services and illustratedhow employee transitions to new outsource providers have beenhandled elsewhere.

So far, research suggests that if thoughtfully considered,outsourcing can be a positive experience for employees,customers and shareholders.