EXTENDED EXEC

TENDER PROCESS
& SESSION 2
The Savoy, London
HOW DO WE
TENDER?
The Savoy, London
Identificat Market Pre- Invite
ion of the Sourci Qualificati
Requirem Analysi to
ng Plan on of
ent s Suppliers Tender
• Current • Business case • Who do we go to • Phone • Tender
Champagne deal written and • Accor? Other conversations documents
expires end of signed off by hotels? Current • Face to face written
April 2019 stakeholders suppliers? meetings • Tender
• Current contract • What do we do – • Who else is documents sent
not fit for re-negotiate; there? to qualified
current tender suppliers
operations • How do we
• Opportunity to tender – open;
asses the market restricted

Further Creation
Evaluat Ongoing
ing Shor Negotiati
on / Final
of
Contract Contract
Tender Manage
tlist
or
Tender Relationsh
Returns ment
returns ip
• Looking at the • Shortlist those • Provide • Pick a winner • Handover of
returns to see suppliers moving information as to • Sign a contract contract from
what has been forward where they Procurement to
offered • Inform those not stand relevant HOD
• Balanced moving forward • Receive final • Ongoing contract
scorecard and provide offers management
approach feedback
Extended Exec
Deutz (Gonzales
Byas) 26 16.5 9 4.5 56 5
Chalres Heidsieck
(Liberty) 36 19 7.5 4.5 67 3
Louis Roederer
(MMD) 30 18 18 4 70 2
Moet & Chandon /
Don Perignon
(LVMH) 22 12 29.25 9.75 73 1
Ruinart / Don
Perignon (LVMH) 5 16 29.25 9.75 60 4

Finance/Procurement
Deutz (Gonzales
Byas) 32 18 12 4 66 4
Chalres Heidsieck
(Liberty) 40 18 12 4 74 2
Louis Roederer
(MMD) 32 18 15 4 69 3
Moet & Chandon /
Don Perignon
(LVMH) 24 12 30 10 76 1
Ruinart / Don
Perignon (LVMH) 0 16 30 10 56 5
 Findings/Insights and Update from Champagne

• Exec balance scorecard showed LVMH (Moet) & MMD first & Second
• Reduced to three potential suppliers
• LVMH – Moet & Chandon / Ruinart / Dom Perignon
• MMD – Louis Roederer
• Gonzales Byas – Deutz
• Have spoken to each supplier and asked for last offers
• Supplier presentations being arranged W/C 15th April
• Final decision to be made

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 So what should we focus on?
• What do we spend the most money on? £39m costs in 2018.

• Cost of Sales £6.3m (Food £3.5m/Bev £2.1m)

• Labour £19.1m = 644 FTE. Rooms £4.1m = 130 fte/F&B £9.2m = 398 FTE /MOD 40 FTE = £1.1m
/Overheads 76 FTE = £4.9m) includes Leased labour 124 FTE = £2.6m

• Direct Expenses £6.1m includes £1.8m Commissions and reservation cost/£1m for Contract cleaning

• Overheads excl payroll £7.5m (A&G £2.1m/S&M £2.8m/POMEC £2.6m) includes £1.2m in credit card
costs/£1.5m on corporate charges and £1.5m on utility costs

6
 So what should we focus on?
Who do we spend most money on?
Top 20 Supplier 2018
Type of Cost Supplier
Staff agencies o ACT
Staff agencies o Alpha
Staff agencies o Summit
Staff agencies o Quadrant
Staff agencies o Assist Security
Staff agencies o Off to Work
Beverage o MMD
Beverage o LWC
Beverage o Bibendum
Beverage o Specialty
AV o PSAV
Music o Gary Parks
Food o Chamberlain (fish)
Food o Finclass (meat)
Food o Mash (F&V)
Finance o Six Card
TV o Hoist
Night Cleaning o Atlas
Florist o Smith & Green

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 So what should we focus on?
• What is coming up for renewal?

• Where can we make most impact?

• Cost savings

• Revenue opportunity

• Quality improvement

• Marketing / Brand enhancement

• Limited resource so need to focus on areas where we can make most impact?

• Do you have any suggestions of areas of focus for Procurement? Why? Team work

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 Team work
• Identify areas of need

• Identify options

• Identify opportunities

9
 Team work
MOD T&C
• £509k Car Service – Millenium • £46k – Aviva
• £629k AV • Scottish Widows
• £23.8k Advanced Pools • Recruitment Agencies
• Vocera
Sales & Marketing
Security
• £0.5m Agencies (Marketing)
• £0.5m Agency Security – Assist Security -A detailed tender was • Agencies (recruitment
done and a number of proposals were reviewed by myself and
procurement in early 2017. • Barter
• £54.6k CCTV/Access Control – Lazerbeam Fire & Security This • Systems
was reviewed by Tim Clough in late 2016/early 2017 with 3
different suppliers proposed. Rooms
• £177.3k Fire Alarm Maintenance – Chameleon Systems - reviewed • £98.2k Dry Cleaning Company
this on an annual basis. They have just completed a large
upgrade to the system. • Recruitment Agencies

• H&S Audits • £135.4k Paul & Co

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 Timeline
• 2019

o April Completion date Extended Exec Sponsor

o Audits End of April 19 Tim Molden
o Background music End of April 19 Raoul Duclos
o Champagne End of April 19 Raoul Duclos
o Chauffer cars End of August 19 Alison Vernon
o AV End of May 19 (e) Raoul Duclos / Jen Burns
o Kitchen equipment maintenance End of June 19 (e) Steve Shelley / Maarten Geschwindt
o May
o Kitchen utensils End of July 19 (e) Maarten Geschwindt / Daniel Pearse
o Aviva End of August 19 (e) Sonja Lang
o Sales & marketing agencies End of Sept 19 (e) Emma Allam
o June
o Dry cleaning End of July 19 (e) Almudena Gomez
o July
o Waste End of May 20 Steve Shelley / Fabrice Lasnon / Almudena Gomez
o Scottish Widows End of Dec 19 (e) Sonja Lang
o August
o Recruitment agencies End of Dec 19 (e) Sonja Lang / Emma Allam
o Paul & Co End of Nov 19 (e) Almudena Gomez
o September
o CCTV End of Jan 20 Tim Molden
o October
o Advanced Pools End of Jan 20 (e) Alison Vernon / Steve Shelley
o Leased Labour End of Dec 19 (e) Sonja Lang
o November
o S&M systems End of Feb 20 (e) Giuseppe Calore
o December

1
 Audio Visual
• PSAV

• Currently a revenue share contract 35% of revenue

• Revenue earned by the Savoy in 2018 £220k, therefore total revenue earned on AV £629k

• Considerations

• Revenue opportunity (£409k based on 2018)

• Quality – Hardware improvement./better technology

• Improved product – marketing opps.

• Responsiveness of existing team

• Options:

1. - Large event spaces – Outsource

- Small event spaces - Outsource

2. - Large event spaces – Inhouse

- Small event spaces - Inhouse

3. - Large event spaces – Outsource

- Small event spaces - Inhouse

1
 Audio Visual
• Different options being explored
• Totally outsourced
• Basic projection in house / Large events outsourced

• Risks & Opportunities

• Opportunities
• Increased revenue
• Better marketing
• Innovation
• Quicker responses

• Risk
• Cost of equipment
• Cost of maintenance
• Cost of obsolescence
• Who sets it up & breaks it down

• Several companies approached

• Initial tenders received

• Shortlisted five companies

• Currently have options from

• PSAV
• Toshiba
• Excel AV
• ProAV / Hoist
• Event Production Services

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 Audio Visual Scorecard
PURCHASE Cost Innovation Added Value Credit Check TOTAL
PSAV / AVI-PSL 15 10 3 1 29
Toshiba 15 10 1 5 31
Excel AV 18 15 3 4 40
ProAV / Hoist 5 8 3 5 21
Event Production Services 0 0 0 0
Max points available 20 15 5 5 45

OUTSOURCE Hire Cost Added Value Credit Check Rebate TOTAL

PSAV / AVI-PSL 15 15 1 15 46
Toshiba 15 5 5 0 25
Excel AV 0 4 0 4
ProAV / Hoist 0 5 0 5
Event Production Services 15 10 0 20 45
Max points available 20 15 5 30 70

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 Car Service
• Millennium

• Currently a revenue share contract 16.5% of revenue

• Revenue earned by the Savoy in 2018 £84k, therefore total revenue earned on car service £509k

• Issues with service?

• Revenue opportunity (£425k based on 2018)

• Current contract expires end of August 2019

• Quality – introduce new fleet of cars/electric/hybrid

• Team

• Responsiveness

• Options:

1. Tender existing contract

2. In house (Purchase/lease equipment)

3. Combination of the above

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 Laundry
• Palace

• Cost £91,238

• Issues with service?

• Cost

• Quality

• CSR

• Responsiveness

• Options:

1. Tender existing contract

2. Purchase v lease

3. Combination of the above

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 Waste
• Brewsters

• Cost £181,482

• Issues with service?

• Cost

• Quality

• CSR

• Responsiveness

• Options:

1. Tender existing contract

2. Negotiate with existing contractor

3. Split the contract

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 Timeline
• 2019

o April
o Audits
o Music
o Champagne
o May
o Chauffer cars
o Kitchen equipment
o Aviva
o June
o Dry cleaning
o CCTV systems
o July
o Waste
o Scottish Widows
o August
o Agencies
o Paul & Co

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 Next steps
• 2 volunteers for each tender team

• Timeline for tenders

• Follow up consideration and scorecard completion

• Identify any further valuable tender opportunities

• Rollout of Contract Management System