With the aim of driving greater efficiency in the management of the Commonwealth’s property portfolio, three property service providers have been appointed.

The providers are Broadspectrum Property Pty Ltd (Broadspectrum), Evolve FM Pty Ltd (Evolve FM), and Jones Lang LaSalle (ACT) Pty Ltd (JLL). They will provide leasing and facilities management services to over 90 Commonwealth entities.

These appointments are part of the Government’s plan to realise further savings in excess of $100 million in property-related expenditure over the four years of the contracts, including through consolidating the Commonwealth’s buying power.

The new property service provider arrangements complement other efficiency measures already in place, including Operation Tetris (see below), which had a goal of realising savings of $300 million over 10 years through reductions in surplus leased property holdings.

The appointment of the providers followed an open tender process and represents strong outcomes for Indigenous business and small to medium enterprises (SME). Each Property Service Provider has committed to exceed the Indigenous Procurement Policy targets of 3 per cent for levels of Indigenous employment and/or engagement of downstream contractors. The Property Service Providers are also required to meet or exceed the Government’s SME targets of 10 per cent of downstream contract value.

Broadspectrum and JLL are large, established global providers. Evolve FM is an Australian-based, Indigenous-owned company.

The appointments are for an initial term until 30 June 2021, with possible extensions of up to a further four years.

Operation Tetris squeezes more in

The Department of Finance’s property efficiency program consists of:

• Absorbing entities’ lease requirements, where feasible, into existing vacant office accommodation (Operation Tetris) undertaken in the ACT in 2015-16 and rolled out nationally from 2016-17.
• Ensuring that leases and other property services are delivered through coordinated procurements that will maximise the Commonwealth’s substantial purchasing power.

In support of Operation Tetris, the government established a ‘Whole-of-Australian-Government’ coordinated procurement system for property-related services. This arrangement covers leasing services and property and facilities management for domestic office accommodation and shopfronts.

The coordinated approach for property-related services is designed to improve the efficiency of property services across the Commonwealth and maximise the value for money that can be achieved by consolidating the Commonwealth’s purchasing power.

All non-corporate commonwealth entities (NCCE) will be required to commence using the arrangements for their outsourced property needs once their existing contracts expire. NCCE will, however, be able to enter into new contracts, including any extensions or expansions to existing property-related arrangements (excluding leases), as long as those contracts expire before 30 June 2018. Lease arrangements will remain subject to Resource Management Guide 504 (RMG 504) in respect of endorsement by the Minister for Finance.

Since the national roll-out, the government claims Operation Tetris has successfully filled over 60,000 square metres of vacant and surplus office space in the ACT and a further 7,000 square metres in other capital cities, including:

• A reduction in the median work point vacancy rate from 20.9 per cent (2015) to 13.8 per cent (2016).
• A reduction in net lettable area leased by the Commonwealth from 3.13 million square metres in 2015 to 2.89 million square metres in 2016.