Australia’s federal government is making preparations for the next phase of their office overhaul project, which will start in the latter half of 2018. The project will work on the commercial fitouts in Canberra and across the country, which is expected to deliver savings for the government, with the lowest estimates sitting at $200 million over four years.
The plans will allow for new contracts for larger property companies in the country as the government works to streamline its supply chain by cutting many of the suppliers. Currently, the commonwealth spends about $2 billion annually for the commercial fitouts in Canberra and across the country for its 94 departments and instrumentalities. Now, they have awarded new facilities management contracts to three key companies, which will go in effect on the first of July.
The three groups are Broad-Spectrum, Evolve and Jones Lang LaSalle, who will handle issues ranging from building maintenance to safety and security. The AU government currently spends $500m annually on facilities management, with the new deal, which reduces the suppliers to three, aimed at saving money via streamlined oversight.
According to Assistant Finance Minister David Coleman, there are also plans to overhaul the government’s $400m annual expenditure on commercial fitouts in Canberra and across the country, as well as improving the subletting of vacant government office space.
Coleman says that the government has already made some progress on reducing property costs for taxpayers, but there might be more on the way, adding that the AU government will be making further decisions later in 2018 regarding office fit-outs and subleasing.
The government has already made $105.3m in savings over the forward estimates thanks to the streamlining which cut costs on federal office space, with the next phase awaiting approval and estimates.
Back in May, the government released the Australia Government Occupancy Report for the financial year of 2017, which shows that it had manage to cut federal rental footprint by at least 9% since 2014 thanks to “Operation Tetris”, which resulted of 700,000m2 of unused office space being filled. An additional $100m in savings is expected over four years under the program.