Procurement Modernisation in Government

Across Australia and New Zealand, government procurement is facing a quiet but significant transformation.

Historically, public sector procurement has been shaped by a strong focus on probity, fairness, transparency and compliance. These principles remain fundamental and non-negotiable. However, the operating environment in which government agencies procure goods and services has become far more complex than the frameworks many procurement functions were designed for.

Cost pressures are persistent. Markets are volatile. Supplier capacity is constrained. Regulatory obligations are expanding. At the same time, governments are being asked to deliver better services, faster outcomes, and stronger accountability for public spending.

In this context, procurement modernisation is no longer about incremental improvement. It is about ensuring that procurement functions are fit for purpose — capable of balancing value for money, risk, policy outcomes and operational realities in an increasingly demanding environment.

For government agencies, statutory authorities and government-owned corporations across Australia and New Zealand, procurement modernisation has become a critical enabler of effective service delivery and public trust.

Why government procurement must modernise

1. Value for money is under greater scrutiny

Public sector procurement has always been accountable to taxpayers. However, the level of scrutiny has intensified.

Rising operating costs, infrastructure investment, health and social service demand, and fiscal constraints mean agencies are under pressure to demonstrate that procurement decisions deliver whole-of-life value, not just lowest price.

This requires procurement functions to move beyond compliance-led processes and develop stronger capabilities in:

• Demand definition and challenge
• Market and cost driver analysis
• Evaluation of total cost and risk
• Contract and supplier performance management

Without these capabilities, agencies risk delivering technically compliant outcomes that fall short of policy and service objectives.

2. Risk and resilience are now central considerations

Recent years have highlighted the vulnerability of public sector supply chains — particularly in health, emergency services, infrastructure and social services.

Government procurement teams are increasingly expected to understand and manage:

• Supplier financial and operational risk
• Market capacity constraints
• Concentration and dependency risk
• Contractual exposure and continuity arrangements

Modern procurement approaches embed risk considerations into sourcing strategies from the outset, rather than addressing them reactively once issues arise.

3. Policy objectives are shaping procurement decisions

Procurement in government is not just a commercial function — it is a policy lever.

Agencies are required to support objectives such as:

• Local industry participation
• Indigenous procurement
• Modern slavery prevention
• Sustainability and emissions reduction
• Workforce and skills development

Balancing these objectives with value for money and service delivery requires more sophisticated procurement strategies, clearer trade-offs, and better data to support decision-making.

4. Capability constraints are limiting effectiveness

Many government procurement functions are operating with:

• Lean teams
• High staff turnover
• Heavy reliance on templates and process
• Limited time for strategic thinking

Procurement modernisation must address not just systems and policies, but capability, operating models and decision rights, otherwise transformation efforts will not be sustained.

What procurement modernisation looks like in government

Procurement modernisation in the public sector differs from the private sector in important ways. Compliance, transparency and probity remain paramount. However, modernisation enables agencies to deliver these requirements more effectively, not at the expense of outcomes.

In practice, modernisation spans several core dimensions.

1. Clearer demand definition and scope discipline

One of the most powerful — and often underutilised — levers in government procurement is demand clarity.

Many sourcing challenges stem from:

• Poorly defined scopes of service
• Legacy requirements carried forward without review
• Inconsistent specifications across agencies or business units

Modern procurement functions work closely with policy, operational and technical stakeholders to:

• Clarify outcomes required
• Standardise requirements where appropriate
• Remove unnecessary complexity
• Align scope with available market capability

This approach reduces risk, improves market response and strengthens value for money outcomes.

2. Category-based procurement strategies

Leading government agencies are increasingly adopting category management approaches, even within constrained regulatory environments.

This involves:

• Analysing spend and demand patterns across agencies or portfolios
• Understanding supply market dynamics and constraints
• Segmenting categories based on risk, value and policy sensitivity
• Defining sourcing strategies that are fit for purpose

Rather than treating each procurement as a standalone event, categories are managed over time — enabling better planning, market engagement and performance oversight.

3. Smarter market engagement and sourcing approaches

Procurement modernisation enables agencies to use a broader range of sourcing approaches, such as:

• Multi-supplier panels and standing offers
• Staged or two-step procurements
• Collaborative procurement across agencies
• Outcome-based and performance-linked contracts

Early and appropriate market engagement — conducted within probity requirements — improves response quality and reduces procurement risk.

4. Stronger contract and supplier management

For many government agencies, the greatest value leakage occurs after contract award.

Modern procurement functions focus on:

• Clear performance measures aligned to service outcomes
• Structured contract management frameworks
• Regular supplier performance reviews
• Early identification and resolution of issues

This shifts procurement from a transactional role to an ongoing stewardship role, supporting better service delivery and accountability.

5. Better use of data and insights

Data remains a significant challenge in government procurement.

Modernisation initiatives focus on:

• Improving spend visibility and classification
• Linking procurement, finance and operational data
• Enabling reporting that supports decision-making, not just compliance
• Supporting audits and external scrutiny efficiently

Technology plays an important role, but only when aligned with processes and capability.

6. Fit-for-purpose governance and operating models

Procurement modernisation in government must respect delegation frameworks and legislative requirements.

This includes:

• Clear decision rights and accountability
• Appropriate separation of duties
• Scalable governance models for low-risk vs high-risk procurements
• Centralised support with decentralised execution where appropriate

The goal is not to reduce control, but to apply control proportionately and intelligently.

Strategic sourcing in a government context

Strategic sourcing in government is not about copying private sector practices wholesale. It is about applying structured, evidence-based thinking within a public accountability framework.

Effective strategic sourcing in government involves:

• Understanding total cost, risk and policy impact
• Aligning sourcing strategies to agency objectives
• Designing procurement approaches that attract capable suppliers
• Managing supplier relationships within probity boundaries

This is particularly important in categories where markets are thin, suppliers are capacity-constrained, or services are critical to community outcomes.

Where procurement modernisation delivers the greatest impact in government

Across Australia and New Zealand, procurement modernisation has proven particularly valuable in:

Health and human services

Complex service delivery models, workforce pressures and regulatory requirements mean procurement must carefully balance cost, quality and continuity.

Infrastructure and capital programs

Procurement plays a critical role in risk allocation, market capacity management and long-term value for money across major projects.

Property, facilities and asset services

Large, recurring spend categories often suffer from fragmented sourcing, inconsistent scopes and limited performance visibility.

ICT and professional services

Rapidly changing markets and skills shortages require flexible, well-governed sourcing approaches.

Common challenges agencies encounter

Despite strong intent, procurement modernisation efforts in government often face challenges such as:

• Over-emphasis on policy and templates without capability uplift
• Technology implementations that replicate existing inefficiencies
• Limited stakeholder engagement
• Inconsistent application across portfolios or regions
• Change fatigue within procurement teams

Addressing these challenges requires a pragmatic, staged approach grounded in how agencies actually operate.

How Trace Consultants can help government agencies

Trace Consultants supports government agencies across Australia and New Zealand to modernise procurement in a way that is practical, compliant and outcome-focused.

We bring deep experience working within public sector environments and understand the balance required between probity, value and service delivery.

Procurement maturity assessments and strategy

We help agencies understand their current procurement maturity and define a clear, achievable roadmap aligned to policy, capability and resourcing constraints.

Strategic sourcing and category management

Trace supports complex sourcing initiatives across government, including:

• Indirect services and facilities
• Workforce and labour categories
• ICT and professional services
• Logistics and supply arrangements

We work alongside internal teams to design sourcing strategies that withstand scrutiny and deliver sustainable outcomes.

Governance, operating model and capability uplift

We assist agencies to:

• Clarify roles, responsibilities and decision rights
• Design scalable governance frameworks
• Uplift procurement capability through practical tools and coaching

Our focus is on leaving agencies stronger and more self-sufficient.

Independent and objective advice

Trace is independent of software vendors and outsourcing providers. This allows us to provide objective, transparent advice aligned solely to the needs of government clients.

Looking ahead

Procurement modernisation in government is not about abandoning compliance — it is about strengthening it through better design, clearer accountability and stronger capability.

As fiscal pressure, complexity and public expectations continue to grow, procurement will play an increasingly important role in enabling governments to deliver outcomes that matter.

The agencies that succeed will be those that:

• Treat procurement as a strategic capability
• Invest in people, processes and data
• Apply governance proportionately
• Engage markets intelligently
• Focus on long-term public value

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Procurement Modernisation & Strategic Sourcing

For many Australian and New Zealand organisations, procurement has traditionally been viewed as a transactional function — focused on running tenders, negotiating rates, and enforcing compliance. In periods of stability, that approach was often “good enough”. Today, it is no longer sufficient.

Volatility in global supply chains, sustained inflationary pressure, labour shortages, heightened regulatory scrutiny, and rising stakeholder expectations have fundamentally changed what is required from procurement. Boards, CEOs and CFOs are increasingly looking to procurement not just for savings, but for risk management, resilience, sustainability, and long-term value creation.

This shift has brought procurement modernisation and strategic sourcing firmly into focus.

Rather than a single project or system implementation, procurement modernisation is an end-to-end transformation of how organisations define demand, engage markets, manage suppliers, leverage data, and govern spend. Strategic sourcing sits at the core of this transformation — ensuring that sourcing decisions are aligned with business strategy, not just short-term cost outcomes.

For organisations across Australia and New Zealand — particularly in government, health, infrastructure, retail, FMCG, manufacturing, education and large asset-intensive industries — getting this right has become a material source of competitive advantage.

Why procurement needs to modernise

1. Cost pressure is structural, not cyclical

Many organisations initially responded to inflation and margin pressure with short-term cost-out programs. However, it has become clear that cost pressure is structural:

• Input costs remain volatile
• Labour markets are tight
• Energy, compliance and insurance costs are rising
• Suppliers are under pressure themselves

In this environment, traditional “price-down” sourcing approaches are often ineffective or unsustainable. Procurement must move upstream — addressing demand, specifications, scope of service, and operating models, not just unit rates.

2. Risk and resilience are now board-level issues

Disruptions over the past few years have exposed just how fragile many supply chains are. Procurement teams are now expected to understand:

• Supplier financial viability
• Geographic concentration risk
• Dependency on single suppliers or regions
• Contractual exposure and exit options

Modern procurement functions embed risk-based sourcing strategies, diversified supplier portfolios, and proactive supplier relationship management rather than relying on reactive mitigation after issues emerge.

3. Sustainability and regulation are reshaping procurement decisions

Environmental, social and governance (ESG) considerations — particularly Scope 3 emissions, modern slavery obligations, and ethical sourcing — are no longer optional.

Procurement teams must now balance cost, service and sustainability outcomes, often with incomplete data and fragmented systems. This requires new capabilities in data capture, supplier engagement, and category strategy design.

4. Procurement is expected to enable the business, not slow it down

Business leaders increasingly expect procurement to be an enabler of growth, innovation and operational performance. Lengthy sourcing cycles, rigid processes and poor data visibility undermine confidence in the function.

Modern procurement organisations are redesigning processes, governance and technology to support speed, transparency and better decision-making, without sacrificing control.

What procurement modernisation really means

Procurement modernisation is often misunderstood as simply implementing a new source-to-pay system. Technology is important — but on its own it rarely delivers sustainable value.

In practice, procurement modernisation spans six interconnected dimensions:

1. Demand management and specification discipline

One of the most overlooked levers in procurement is demand.

Modern procurement functions work closely with stakeholders to:

• Challenge what is being bought, not just who it is bought from
• Standardise specifications where possible
• Remove gold-plating and legacy requirements
• Align demand with actual business need

In many organisations, a significant proportion of addressable savings sits upstream of the sourcing process — locked into poorly defined scopes, inconsistent specifications, and unmanaged demand growth.

2. Strategic category management

Strategic sourcing is most effective when embedded within a robust category management framework.

This involves:

• Deep spend and demand analysis
• Understanding supply markets and cost drivers
• Segmenting categories based on risk, value and complexity
• Defining clear sourcing strategies aligned to business objectives

Rather than running one-off tenders, modern procurement teams manage categories as ongoing portfolios, continuously adjusting strategies as market conditions change.

3. Smarter go-to-market strategies

Procurement modernisation enables more nuanced go-to-market approaches, such as:

• Multi-supplier frameworks
• Panel arrangements with performance differentiation
• Outcome-based contracting
• Collaborative sourcing models
• Long-term partnerships for critical categories

The right approach depends on category characteristics, risk appetite, and organisational maturity — not a one-size-fits-all tender template.

4. Supplier relationship and performance management

Modern procurement functions recognise that value is delivered after the contract is signed, not at award.

This requires:

• Clear performance metrics linked to business outcomes
• Regular, structured supplier reviews
• Transparent issue escalation pathways
• Joint improvement initiatives

Strategic supplier relationship management (SRM) is increasingly important in categories where service continuity, innovation or risk management matter as much as price.

5. Data, insights and digital enablement

Data remains one of the biggest constraints in procurement.

Modernisation focuses on:

• Improving spend visibility and classification
• Integrating procurement, finance and operational data
• Enabling real-time reporting and dashboards
• Supporting scenario analysis and decision-making

Technology should support better behaviours and decisions — not simply automate broken processes.

6. Governance, capability and operating model

Finally, procurement modernisation requires clarity on:

• Decision rights and delegations
• Centralised vs decentralised models
• Category ownership and accountability
• Capability uplift and change management

Without the right operating model and skills, even well-designed strategies struggle to stick.

Strategic sourcing: moving beyond tactical savings

Strategic sourcing is often used as a catch-all term, but in a modern context it has a specific meaning.

At its core, strategic sourcing is about aligning sourcing decisions with long-term organisational strategy, not just near-term budget cycles.

This includes:

• Understanding total cost of ownership, not just price
• Aligning sourcing outcomes to service, risk and sustainability objectives
• Designing sourcing strategies that remain viable in volatile markets
• Engaging suppliers as partners where appropriate

For many organisations, this represents a significant shift in mindset — particularly where procurement has historically been measured primarily on annualised savings.

Where procurement modernisation delivers the most value

Across Australia and New Zealand, procurement modernisation is delivering material benefits in several common areas:

Indirect procurement and services

Categories such as facilities management, property services, labour hire, IT services, professional services, logistics, cleaning, security and maintenance often suffer from:

• Poorly defined scopes
• Fragmented supplier bases
• Inconsistent rates and service levels

Modern sourcing approaches can unlock both cost and service improvements without compromising operational outcomes.

Capital projects and asset-intensive environments

In infrastructure, health, education and large facilities, procurement plays a critical role in:

• Managing contractor risk
• Aligning commercial models to delivery outcomes
• Ensuring transparency and governance

Strategic sourcing supports better risk allocation and lifecycle cost management.

Regulated and government environments

Public sector and highly regulated organisations face additional complexity around probity, transparency and compliance.

Procurement modernisation in these environments focuses on:

• Strong governance and auditability
• Clear evaluation frameworks
• Supplier performance management
• Market engagement that encourages competition and capability uplift

Common pitfalls organisations encounter

Despite good intentions, many procurement transformation initiatives fall short. Common issues include:

• Treating procurement modernisation as a technology project
• Over-focusing on savings targets without addressing demand
• Underestimating change management and capability uplift
• Implementing complex processes that stakeholders avoid
• Failing to embed accountability post-implementation

Sustainable outcomes require a balanced, pragmatic approach grounded in how organisations actually operate.

How Trace Consultants can help

Trace Consultants works with Australian and New Zealand organisations to design and deliver practical, commercially grounded procurement modernisation and strategic sourcing outcomes.

Our approach is deliberately independent, solution-agnostic and execution-focused.

End-to-end procurement modernisation

We support organisations across:

• Procurement strategy and maturity assessments
• Operating model and governance design
• Category management frameworks
• Demand and specification optimisation
• Source-to-pay process redesign
• Change management and capability uplift

Our focus is on delivering outcomes that are implementable and sustainable, not theoretical.

Strategic sourcing and go-to-market execution

Trace supports complex sourcing initiatives across:

• Indirect procurement and services
• Logistics, transport and warehousing
• Property and facilities services
• Labour and workforce-related categories
• Technology and professional services

We work closely with stakeholders to ensure sourcing strategies balance cost, risk, service and sustainability — and that suppliers are set up for success.

Data-driven insights and decision support

We help organisations improve procurement decision-making through:

• Spend analytics and opportunity identification
• Should-cost modelling and market benchmarking
• Scenario analysis to support sourcing strategy decisions
• Performance measurement frameworks

Where appropriate, we leverage fit-for-purpose digital tools, including low-code and analytics solutions, to enable better visibility and control.

Independence and objectivity

Unlike many firms, Trace is not tied to specific software vendors or outsourcing providers. This allows us to provide objective advice focused solely on what works best for your organisation.

The road ahead

Procurement modernisation and strategic sourcing are no longer optional initiatives or “nice to have” capabilities. They are becoming core enablers of financial performance, resilience and organisational agility.

For Australian and New Zealand organisations navigating uncertainty, the question is no longer whether to modernise procurement — but how to do it in a way that delivers lasting value.

Those that succeed will be the organisations that:

• Look beyond short-term savings
• Address demand and operating models, not just contracts
• Invest in capability and governance
• Use data to support better decisions
• Treat procurement as a strategic partner to the business

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How to Take Cost Out of Property Services — Cleaning, M&E, Plumbing, Vertical Transport & Waste (Universities, Hospitals, Hospitality, Schools, Prisons)

There’s a familiar meeting in many organisations: the facilities manager, the procurement lead and the CFO sit down to discuss next year’s budgets. The line for property-services looks immovable. “That’s just the cost of doing business,” someone says. But it isn’t. Property services — the combination of cleaning, mechanical, electrical, plumbing, vertical transport, waste and other critical facilities activities — are often a mix of poorly scoped services, legacy contracts, duplicated responsibilities and soft productivity that quietly leaks cash month after month.

Reducing that cost is both art and science. It’s about spending time up-front to understand the true scope, the operating model and the drivers of cost — then aligning procurement, operations and contract management so savings stick. This article is a practical blueprint for Australian and New Zealand facilities, procurement and finance leaders working in universities, hospitals, hospitality, schools and correctional facilities. It covers the levers you can pull, the pitfalls to avoid, the governance you’ll need, and the role of technology and sustainability. It also explains, plainly, how Trace Consultants can help you turn ideas into a deliverable program.

Why property services cost reduction matters

Property services are a recurring, high-touch portion of the facilities budget. The reasons they offer rapid savings opportunities are simple:

• Labour intensity. Labour is usually the largest cost component. Small improvements in productivity, rostering or travel time translate to significant dollar savings.
• Hidden scope & legacy assumptions. Old contracts often include vague scope descriptions, generous supervisor ratios or historic allowances that no longer reflect current needs.
• Fragmentation of responsibility. When responsibilities sit across operations, procurement and estates, duplication or gaps are common.
• Lack of data & performance management. Without good metrics and verification, suppliers tend toward risk-averse behaviour, and opportunities for efficiency go unidentified.
• Complex stakeholder needs. Hospitals and prisons have demanding compliance and safety requirements; universities and hotels are service-led. Each needs a tailored approach.
• Opportunity to link sustainability & productivity. Less waste, better dosing systems, route optimisation and lower water use are both environmentally sensible and cost saving.

When done well, cost reduction delivers more than a smaller line item — it improves service predictability, reduces risk and frees funds for higher-value investments.

The six levers to take cost out of property services

Successful programmes typically combine several levers. Think of them as the toolkit you’ll use:

1. Scope clarity & rationalisation
2. Commercial model & market engagement
3. Operating model & workforce design
4. Productivity, technology & digital verification
5. Procurement, contracting & governance
6. Sustainability & waste minimisation

We’ll walk through each in turn with practical actions and sector considerations.

1. Scope clarity & rationalisation

Most savings programmes start with scope. If you don’t know what you’re buying, you can’t buy it efficiently.

Actions to take:

• Inventory your sites and tasks. Build a central site data pack: floor plates, room types, opening hours, access constraints, and the periodic work that happens (e.g. deep cleans, lift servicing, emergency call-outs). For multi-site organisations (universities, hospitals) this is the foundation for consistent scoping.
• Create standardised service specifications. Move from “hours per week” to outcome-based specifications: audit pass rates, frequency by room type, accepted cleaning methods, allowed chemicals and required PPE. Outcome specs reduce ambiguity and price gaming.
• Rationalise non-core or ad-hoc activities. Identify tasks that don’t need contractor input (e.g. in-team minor repairs, small-value consumables) and consider bringing them in-house or routing through a central helpdesk.
• Tier services by criticality. Not all areas require the same standard: clinical theatres demand different standards to general admin areas. A tiered approach focuses resources where risk and service outcomes are highest.
• Standardise schedules. For institutions with multiple buildings, standard schedules remove bespoke arrangements that add cost and complicate rostering.

Sector note: Hospitals and prisons need higher-control scopes (infection control, security), while hospitality and universities value front-of-house presentation. Scope rationalisation must respect these differences; the point is to remove unnecessary variation, not service.

2. Commercial model & market engagement

How you pay shapes the supplier’s behaviour. Moving beyond simple hourly rates opens opportunities for productivity and innovation.

Commercial models to consider:

• Activity-based pricing: Price by task or area (e.g. per washroom clean, per m² for general areas). This clarifies pricing comparability and links payment to work done.
• Guaranteed FTE (staffing) model: A supplier guarantees rostered hours or FTEs. Useful for predictable demand but requires robust productivity baselines.
• Output/outcome contracts: Payment linked to KPIs and audit results; incentivises performance but needs solid measurement.
• Gainshare or shared savings: Agree a baseline and share improvements — aligns incentives for continuous improvement.
• Hybrid models: Combine guaranteed FTE for core services with activity rates for variable or specialist tasks.

Market engagement tips:

• Run an RFI first. Use a market sounding to understand capacity, innovation and price drivers. The cleaning and facilities market is competitive; RFIs also tell you which operators can deliver multi-site or specialised services.
• Transparent pricing templates. Force bidders to submit comparable pricing by using a detailed pricing schedule and activity matrix.
• Benchmarking. Use defensible benchmarks for labour rates, supervision ratios and productivity standards for each sector and geography.
• Pre-qualification. Screening for safety, insurance, financial capacity, and modern slavery compliance reduces tender risk.

Sector note: For hospitals, ensure bidders demonstrate clinical cleaning capability and infection control training. For prisons, security clearance and experience in custodial environments are mandatory.

3. Operating model & workforce design

Labour is the principal cost. Designing the workforce and rostering to minimise non-productive time is a large lever.

Workforce optimisation actions:

• Activity time studies. Understand real task times for cleaning, inspections, plant maintenance and waste routes. Avoid relying on rule-of-thumb.
• Rostering & travel minimisation. Design rosters that reduce travel time between buildings, cluster tasks spatially, and align shifts with demand peaks (e.g. room turn-around in hospitality).
• Supervision ratio review. Challenge historical supervisor levels. Right-sized supervision reduces overhead yet must preserve safety and quality.
• Multi-skilling & key-person risk. Train staff to perform multiple tasks (e.g. minor M&E fixes), reducing handoffs and wait times. For regulated tasks (mechanical, electrical) keep certified specialists but minimise downtime through task bundling.
• Labour model review: Consider mix of permanent, part-time, casual and contingent labour. Each sector has different constraints — hospitals need higher certainty; hospitality values flexibility.
• In-house vs outsourced design. For some specialised services (vertical transport maintenance, complex M&E), retain strategic in-house capability or a managed supplier; for commodity tasks, a competitive market may be best.

Sector note: In schools, seasonal demand and after-hours access shape rostering. Universities with student labour pools can optimise term-time rosters. However, student labour requires strong governance and supervision.

4. Productivity, technology & digital verification

Productivity gains are sustainable when backed by measurement and digital tools.

Practical technology & productivity levers:

• Digital cleaning verification. QR codes, photo evidence, or checklists on mobile apps increase accountability and reduce disputes. These systems also create auditable records for compliance.
• Workforce management systems. Basic rostering tools and timekeeping reduce payroll leakage and help enforce agreed shifts. Advanced systems optimise travel and skill matching.
• Route optimisation for waste & maintenance. Route planning reduces transport time and fuel; for waste collection, compaction and bin routing is a quick win.
• Predictive maintenance for M&E. Move from reactive repairs to condition-based maintenance to reduce downtime and emergency call-outs for plant and vertical transport.
• Low-code and smart spreadsheets. Pragmatic tools like Smart Excel or Power Platform apps (which Trace Consultants has implemented with clients) can provide immediate visibility and automation without long IT lead times.
• Analytics & dashboards. Pull together hours, audit scores, call-outs and costs into a simple dashboard the facilities and finance teams use to spot trends.

Implementation tip: Start small — pilot digital verification in a handful of buildings before scaling. That proves process change and cultural acceptance.

5. Procurement, contracting & governance

A good contract and an organised governance framework lock in savings.

Contract design essentials:

• Clear scope & exclusions. Avoid ambiguity about responsibilities for minor works, consumables, and site fixtures.
• Performance KPIs & payment linkage. Include KPIs that matter (audit pass rate, response time for emergency call-outs, lift downtime) with balanced incentives and reasonable remedies.
• Transitional arrangements. Mobilisation and demobilisation clauses, training requirements and data migration specifics. Don’t leave mobilisation to goodwill.
• Modern slavery & compliance clauses. Require supplier transparency across labour and subcontractors. For public institutions, this is often a mandatory check.
• Variation management. Define how extra works or scope changes are priced to avoid cost creep.
• Termination & contingency. Include rights and practical steps for supplier failure, including access to key staff records for operational continuity.

Governance model:

• Single point of contract management. A named contract manager coordinates supplier performance, invoicing and governance.
• Monthly performance reviews. Regular scorecard reviews with operations, procurement and finance; escalate for under-performance.
• Quarterly strategic reviews. Focus on continuous improvement, innovation proposals and safety incidents.
• Annual market benchmarking. Revalidate pricing against market movement before price review windows.

6. Sustainability & waste minimisation

Sustainability is increasingly material — and delivers cost benefits.

Sustainability actions that reduce costs:

• Chemical dosing & microfibre systems. Dosing reduces chemical waste and cost; microfibre improves cleaning performance and reduces product use.
• Water efficiency & HVAC controls. Investment in water saving and HVAC optimisation reduces energy and water bills.
• Waste segregation and recovery. Improve recycling, organics removal and reduce general waste to decrease landfill costs and potentially generate revenue.
• Fleet electrification & route optimisation. For organisations with in-house fleets, electrifying vehicles and optimising routes reduce fuel cost and emissions.
• Product procurement & circularity. Moving to re-usable consumables, longer-life assets and supplier take-back programs reduces replacement spend.

Sector note: Hospitals have complex waste streams with regulatory disposal costs — careful segregation delivers both compliance and cost benefit.

Mobilisation & change management — the place where savings are won or lost

Many programs hit difficulties in mobilisation. Treat transition as a project.

Mobilisation essentials:

• Detailed mobilisation plan. Include timelines, recruitment/training, equipment delivery, IT access, and site readiness gates.
• Baseline audits. Capture condition and current performance; these baselines prevent disputes.
• Stakeholder communications. Inform internal teams, unions (where relevant), tenants, clinicians or campus users about changes.
• Trial periods & readiness gates. Pilot approach for 4–8 weeks before full handover; move to full payment only when acceptance criteria are met.
• Risk register & contingency. Identify and mitigate risks (supply chain, mobilisation slippage, industrial relations).

People factor: The supplier’s workforce is your operational asset. Investing in their training, wellbeing and rostering pays dividends in productivity and quality.

KPIs and measurement — what to track

A short, focused KPI set is better than a long wish list.

Suggested KPIs:

• Cost KPIs: Cost per m², cost per bed/room, cost per lift service incident.
• Service KPIs: Audit pass rate, number of corrective actions, average response time for urgent call-outs.
• Productivity KPIs: Cleaned m² per labour hour, first-time fix rate for M&E, average time per service call.
• Risk & compliance: Number of WHS incidents, contractor audits passed, modern slavery screening coverage.
• Sustainability KPIs: Waste diversion rate, water usage per m², Scope 1/2 energy per site.

KPIs must be reconciled to finance for savings to be visible and recognised in budgets.

Common pitfalls and how to avoid them

Avoid these frequent mistakes:

• Buying by price alone. The cheapest hourly rate often hides lower productivity and higher supervision or rework. Compare bids on activity and outcomes.
• Under-specifying the scope. Ambiguity leads to disputes and cost creep. Invest time to specify properly.
• Ignoring mobilisation. Many savings are lost during a poorly executed cutover. Treat mobilisation as a project.
• Weak governance. No one owns the scorecard or pays attention to drift. Create clear contract management routines.
• Neglecting labour and safety obligations. Non-compliant suppliers are a reputational and legal risk. Ensure award compliance and WHS oversight.
• Over-reliance on one supplier. Risk concentration is real — prefer panels or option for multiple suppliers across regions where practical.

How Trace Consultants can help

Trace Consultants brings practical, multi-disciplinary capability to help organisations remove cost from property services while preserving or improving service and compliance. We work with universities, hospitals, hospitality groups, schools and correctional facilities across Australia and New Zealand. Our services are focused on delivery and include:

1. Scope definition and activity-based modelling: We convert building inventories and service requirements into robust activity models so you can procure like-for-like and compare supplier bids on a level basis.
2. Market strategy & procurement design: We design RFI/RFT and procurement strategies (single supplier, regional panels, managed services) and run market engagement to attract capable bidders.
3. Commercial drafting & negotiations: We write clear scopes, pricing schedules and contract clauses that balance commercial outcomes, performance incentives and risk protections.
4. Mobilisation & transition management: We treat mobilisation as a project — recruitment, training, baseline audits and readiness gates — ensuring suppliers meet day-one readiness.
5. Workforce & rostering optimisation: Practical review and redesign of rosters, supervision ratios and travel flows to improve productivity while maintaining compliance.
6. Digital enablement: Rapid deployment of pragmatic tools — Smart Excel or Power Platform apps, cleaning verification and dashboards — to provide immediate control and visibility. This approach accelerates results without heavy upfront IT projects.
7. Risk, compliance and modern slavery reviews: We ensure award compliance modelling, WHS risk assessment and supplier due diligence are embedded so savings are sustainable and defensible.
8. Sustainability planning & waste optimisation: We identify interventions that reduce cost and environmental impact — from dosing systems to waste route optimisation.
9. Continuous improvement frameworks: We establish governance, scorecards and joint improvement programs with suppliers to capture ongoing productivity gains.

We focus on practical outcomes: a defensible plan, a ready market process, a controlled mobilisation, and measurable savings that finance can recognise.

Quick checklist — 20 practical actions to get started this quarter

1. Build a single, auditable site and task inventory.
2. Define tiered service specifications for all building types.
3. Run time-and-motion studies on core activities.
4. Pilot digital cleaning verification in three buildings.
5. Run an RFI to understand market capability and innovation.
6. Create an activity-based pricing template for procurement.
7. Review supervisor ratios and test a right-sizing model.
8. Rework rosters to cluster tasks and reduce travel time.
9. Identify quick wins in waste diversion and dosing systems.
10. Design mobilisation readiness gates and acceptance tests.
11. Implement a simple KPI dashboard (cost, audit, response time).
12. Conduct supplier modern slavery due diligence for top spend.
13. Test predictive maintenance for a key piece of plant (lift or chiller).
14. Negotiate gainshare mechanisms in new contracts.
15. Standardise consumable specifications and consolidate procurement.
16. Embed WHS audits into monthly performance reviews.
17. Map variations and create transparent pricing for extras.
18. Start an employee training programme for multi-skilling.
19. Pilot a small in-house team for a non-critical scope to compare outcomes.
20. Set up monthly governance with finance to track actualised savings.

Taking cost out of property services is not about cutting corners. It’s a disciplined programme of scope rationalisation, smarter commercial levers, better workforce design, pragmatic technology and strong governance. For complex environments such as hospitals, prisons or universities, the challenge is to reduce cost while protecting safety, compliance and service outcomes.

Trace Consultants helps organisations bridge the gap between ambition and delivery. We bring activity-based costing, market knowledge, procurement rigour and hands-on mobilisation experience — so your savings are real, repeatable and defensible. If you’d like to take the next step, a short diagnostic that maps your top spend categories and identifies three tangible savings initiatives is a practical and low-risk place to start.

Ready to turn property services from a tired cost line into a managed, optimising function? Contact Trace Consultants to discuss a pragmatic next step for your organisation.

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