More details are available of the Australian Government's strategic alliance with PricewaterhouseCoopers to outsource the management of the Commonwealth's Aus$2.5 billion non-Defence property portfolio, previously reported on i-FM (see News story)

As part of the deal, PwC will move its global IT development team for e-property solutions to Australia from the United States.

The announcement is significant as the scale of the property management and maintenance contract is one of the most extensive of its type in the world.

"To the best of our knowledge this is the first time in the world that a government has outsourced its global real estate management," said Mr Terry Weber, PwC partner, real estate outsourcing. "It demonstrates that the Australian Government is at the cutting edge in this field, and as a leader in real estate outsourcing, PwC is naturally delighted to be involved in such an exciting and truly global partnership."

Worth around Aus$88 million over the five year minimum term, the contract will provide for the more effective and efficient management of the portfolio, comprising over 400 properties located in 50 countries, and give the Australian Government access to international best practice in the property management arena.

SME support

The contract is also expected to deliver savings to the Australian taxpayer of around Aus$74 million over 5 years in addition to providing a substantial industry development and support package for the benefit of Australian small to medium enterprises.

To deliver the outsourced services, PwC and its key subcontractors Knight Frank (Australia), KFPW, Multiplex Constructions and Colonial First State Investments will agree to use a diverse range of Australian SMEs to provide building, maintenance and related services.

PwC has agreed to undertake a strategic investment in new web based technology and establish a global property services centre of excellence in Canberra. It has also agreed to relocate its global IT development team for e-property solutions from the United States to Canberra, providing additional opportunities to utilise both local IT skills and expertise and Australian SMEs.

Under the terms of the contract, the consortium will convey a minimum of 27% of the total contract value to Australian SMEs. PwC will provide assistance to these suppliers through a series of education and training programs designed to improve Australian SME penetration into the growing B2B e-procurement marketplace.

Call centre

PwC has also agreed to establish an international call centre in Canberra and upgrade its Victorian National Call Centre with a substantial investment in new technology to be provided by an SME.

The Canberra call centre, which is expected to create about 40 new jobs, will act as a hub for the delivery by PwC of call centre services in the Asia Pacific region and will provide opportunities for the local IT&T industry to provide the required integration/installation services.

A key subcontractor to PwC, Knight Frank (Australia) has also agreed to establish a new office in Darwin to service the South East Asian component of the contract. This will facilitate local business development and new business opportunities in southern Asia.

According to a Government statement The Department of Finance and Administration (DOFA) has already made substantial progress towards improving the performance and efficiency of the property portfolio. It has been focussed for some time on bringing the management of Commonwealth property into line with private sector practice. The selection of an alliance partner will accelerate this process.

The Government will retain the ownership of, and responsibility and accountability for, the assets within the Portfolio. To achieve this, DOFA will establish a small strategic management unit to provide portfolio and policy advice, manage the strategic alliance, and monitor service delivery and portfolio performance against clearly defined measures.

In addition, the delivery of service standards to the tenants of portfolio properties will be contractually guaranteed through a comprehensive Service Level Agreement to be incorporated within the contract.

Richard Byatt