BT has awarded the biggest private sector outsourcing contract in recent years to Carillion. The 'evergreen' contract is the outcome of Project Jaguar, a 15 month long review of the way the telecoms giant procures maintenance and FM services across more than 400 office buildings.

BT whittled down over 100 formal responses to a long-list of 16 companies or consortia. This was reduced to a shortlist of four, Amec, Bovis/Dalkia, Carillion/Servus and Citex/Mace and then to two - with Amec and Carillion competing for the ultimate prize.

Outsourcing is expected to deliver savings of more than £200m over five years, which will help BT to recover ground after recent poor results. Seven or eight years ago BT provided many facilities services in-house. These were then commoditised leading to a reduction in support staff numbers from 7,500 to 1,700. This still left BT with 127 different suppliers and 6000 invoices a month.

According to Les Clarke, until recently General Manager of FM Solutions at BT, "There was a proliferation of management, both in-house and external. We were using input specifications rather than asking contractors to deliver output and there was an emphasis on the 'bought-in price'. BT decided to find a better way of procuring services and held a workshop for the industry. We were looking for opportunities to radically contract and integrate the supply chain. We had expected the biggest benefit to be in construction but in fact it has turned out to be in facilities management."

BT has a string of supply contracts which recently ended and others could be novated to the incoming contractor. The outsourcing contract will be built on multi-skilled/multi-tasking operations. Transferring staff will terminate their employment with BT and sign new contracts, rather than moving under TUPE rules. BT wanted an end-to-end E-Service solution and the fact that the final two contenders had invested heavily in IT weighed significantly in the decision.

Although BT was looking for doers rather than managers it does not anticipate retaining a large in-house FM resource. "BT's 'intelligent customer' function will require only around 20 people," commented Les Clarke. Indeed FM Solutions will eventually disappear and Clarke, who has a background in logistics, is already set to move on to his next project. His place is taken by Sion Lattter who will be responsible for implementing Project Jaguar

Richard Byatt