Gary Wingrove is responsible for helping cut BT’s £900m-a-year property spending habit. And to do it, he’s moving away from its frameworks. So who is he looking to talk to, asks Emily Wright, and what does he want to hear?
Gary Wingrove never wanted to be an astronaut or a fighter pilot when he was growing up. For him, there was never any doubt that he would work in construction. The son of a tiler, his experience of life on site started early: “As far back as I can remember, the building trade was part of my life,” he says. “I used to jump in the van on a Saturday and go down on site and play around. I hope I won’t get shot by the health and safety police for that,” he laughs. “But I always knew this was the career I wanted.”
Wingrove spent his early career working as a QS for “contractors of various sizes”. He made the leap to the client side of the industry ten years ago, becoming head of construction programme management at BT.
He plays a major role in cutting BT’s £900m annual property spend by about 12% a year - something he knows he can achieve only by toughening up its procurement system and demanding greater value for money from the supply chain. This means BT is to become the latest major client to emulate BAA by moving away from frameworks. This, Wingrove points out, will offer opportunities for anyone not already on one of its frameworks or pre-approved lists.
Change in procurement
Since joining BT full-time in April 2009, Wingrove’s hardest task has been to oversee the delivery and management of the firm’s development pipeline across 170 countries - while simultaneously cutting annual construction spend. “Property spend is around £900m a year,” he says. “There is pressure on us to reduce costs by 10-12% each year. With a property spend of about £1bn, that’s a significant amount of money.” To achieve this saving, Wingrove is joining BAA, the ministries of defence and justice, the Highways Agency and others by rethinking procurement.
“Historically, BT has had a set-up where the supply chain is tied up on frameworks and [there is] another national panel of other firms who have all been pre-approved - so there is still limited competition,” he says.
“Now we are trying to move away from using the frameworks. They were set up at a time when there was quite a lot of work around and they worked in that context. But in the current market, they don’t give us best value.”
Over the next 12 months, Wingrove will be bringing in new firms to “widen BT’s field of vision”. He hopes the move away from frameworks will be seen by the industry as a positive development, but there will be no formal change to the system à la BAA. At the airports operator, all projects worth more than £25m are sent out to tender. BT’s strategy will be more subtle.
“This won’t be a wholesale back to the market, open season,” he says. “But there will certainly be opportunities. We are taking a long, hard look at our supply chain and we want to fill some gaps.
“So it will be a case of looking at things on a project-by-project basis and saying:
‘We don’t have enough London fit-out contractors. We want some on there to get some better value so let’s stick two or three on the list who don’t currently work for us.’”
No more Mr Nice Guy
Wingrove insists the industry at large and BT’s existing supply chain should not see the move away from frameworks as adversarial. But he does think the time has come to toughen up. “We like to create long-term relationships with a supply chain, but you need to freshen things up,” he says. “BT are considered nice people to work for. Some people might say we have been too nice, particularly in the current market. I think we are being harder now by planning to review our tender list on a project-by-project basis, rather than assuming we’re going to use the pre-approved contractors and consultants.”
What about the reaction from the current incumbents? Wingrove has a short, sharp answer: “Under their current contracts, they have no right to any work whatsoever and we have every right to bring in whoever we like. I hope our incumbent supply chain will rise to the challenge.”
Even if the companies do this, winning work with BT will not be a walk in the park. Quite apart from the fact that, like any good client, Wingrove is looking for the best of the best, the work available will be limited over the next year or two at least, and competition will be fierce.
“We had hoped the budget reins would be let off slightly since last year as BT’s results were good but, probably quite rightly, the pressure has been kept on us to reduce costs further. As a result, work will be driven by necessity. We are looking to rationalise in the UK and there is a programme rationalising office space in the US, Far East and China. The other piece of work we have running at the moment involves rationalising our data centre portfolio.”
Budgets won’t always be so tight, however, and Wingrove is keen to get new firms on board in time for a period of increased spend: “We have a large property portfolio and the time will come when we have to spend more money as the buildings will start to let us down. We’re making them work harder at the moment - putting more people into fewer buildings - so we’ll have to upgrade them.”
So what does he want from potential supply chain members? Innovation and money-saving ideas are near the top of the list: “It’s not as if we’re looking for just interior designers or a particular M&E contractor,” he says. “It’s the style. We’re looking for people who have a bit of original thinking who, on top of giving us a good price for the job, can bring some extra value along because of past experience. We want people who can think on our behalf rather than just taking instructions.”
He also says he would not be averse to adopting another BAA method - incentivising money-saving ideas with a financial pay-off. “At the moment margins for contractors are very tight so I don’t see why we couldn’t say: ’We’ve done the initial design, we’ve priced it, we could do with shaving some money off and we’ve run out of ideas. If you can come up with any, there is a share in it for you.’”
Health and safety “gone mad”
I think we need to take a step back from the health and safety nanny state that has been created. Some of the things you have to do now are just comical.
Yesterday I went to a site that’s complete in terms of shell and core and almost complete in terms of fit-out. The carpet is down and there was furniture going in. But still, we had to put on personal protective equipment - hard boots, high vis, hats, goggles. Then we got into the building and had to put on overshoes so as not to damage the carpet.
I just think this is health and safety gone mad.
I understand it if you walk onto a site and there are cranes swinging around everywhere. At the moment it’s just ridiculous.
Journey from contractor to client
For 20 years I was working as a QS for contractors of various shapes and sizes. When you’re working for a contractor, I guess you don’t usually think about a move to the client side - that’s more the consultants’ realm.
But it was all about contacts and timing for me. I knew someone at Morgan Stanley who was working on Canary Wharf and set up a team there within Morgan Stanley to look after the cost management and procurement functions. Having done that, I met various people along the way. One of them ended up running property services at UBS, so he asked if I would come across and do the same over there, which I did.
I got made redundant from UBS in 2008, that’s no secret, and I was offered a full-time position here at BT in my current role in April 2009.
The next generation of office workers
As well as his role at BT, Wingrove is the incoming president of the British Council for Offices (BCO). He is now planning the council’s 2011 conference, which will be held in Geneva.
He says it will be themed around the changing shape of offices and catering to the “Facebook generation”, a new wave of office workers who might not want to continue working in a traditional desk-and-phone office set-up. This is something BT has been moving towards for a number of years, to the point where 65% of staff don’t have a desk allocated to them.
“We need to listen to what the next generation is saying,” he urges. “Because in real terms, people who are thinking about investing in a new building now won’t be moving into that building for maybe six years in the City. By that time, people just going to university will be a few years into their careers and people out of university now will be getting to management level, making decisions. It worries me that we are not talking to those people. It needs to be about what they want. A developer and an architect can no longer be allowed to go off and design and build something based on what they want.”
Wingrove will be using his position as BCO president and the conference next year to get across some of his key thoughts on how the industry should be trying harder to connect with this new generation.
“I think we should be liaising more with universities and colleges as an organisation and ask students and graduates how, given a magic wand, they would like to work. Do they want to go into an office? Do they want to have access to social networking sites throughout the day? Do they want to have fixed working hours?
“I really think people want to be more flexible now. Yes, they want to come to a place to meet and sit down to work individually and in teams. But you don’t need to provide banks of 1,400 desks to do that. Just provide wi-fi and flat surfaces in all different shapes and sizes for people to work on. It will come, as always, through certain companies. It will start with the Googles and the Microsofts. Then the BTs and Vodafones will follow and, kicking and screaming, the lawyers and investment bankers will be bringing up the rear.”
Wingrove adds that his presidency will not just be focused on updating office space for people, but also on how to update commercial buildings to meet higher sustainability levels: “I have been building with glass and concrete for as long as I can remember. But you see cars and planes being built out of composite carbon fibres. None of that seems to be coming into the industry. Is it that it can’t? Is the industry not interested? Could we not replace some of the products that cause us problems in terms of sustainability?
“I get the feeling we’re not looking hard enough to answer questions and so that will be another major focus point at the conference next year.”