Facilities Management - News

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GSA adds vendor agreements

WASHINGTON, C.D.—The U.S. General Services Administration (GSA) has established 12 new blanket purchase agreements for office supplies under the Federal Strategic Sourcing Initiative that will help federal agencies meet mandates to cut procurement expenditures by 7% for the current and 2011 fiscal years.

President Barack Obama charged all government agencies with reducing procurement expenditures by 3.5% for both FY 2010 and 2011. The new agreements will help achieve this goal since discounts increase as collective purchases grow across the federal government. The pricing structure in the new agreements more fully leverages the government's buying power.  The estimated savings that can be achieved through these blanket purchase agreements is $48 million per year for a four year total of $192 million, a 7% savings.

The 12 agreements are broken down into three distinct pools offering a wide range of solutions. Pool One’s seven vendors offer office supply catalogs emphasizing a combination of socioeconomic solutions, sustainable product offerings and price. Pool Two is comprised of two companies providing office supply catalogs with an emphasis on sustainable product offerings and low prices. Pool Three is three companies offering discounted prices on toner catalogs that focus on socioeconomic solutions, sustainable product offerings and price.

For more information, see www.gsa.gov

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Building operations add to economy

WASHINGTON, D.C.—The expenditures that sustain office building operations—management, maintenance, repairs, building services and utilities—generate continuous and growing outlays that support local businesses, create job demand and contribute significantly to U.S. gross domestic product (GDP), according to Building Owners and Managers Association (BOMA) International.

This direct spending and its re-spending within those respective local jurisdictions, their states and the nation generated significant economic impacts, summarized below:

• For each dollar of outlay for office building operations, the national economy gained $2.90 with the result that $40.8 billion in annual operating outlays contributed a total of $118.4 billion to GDP in 2009.
• For each dollar of outlay for office building operations, U.S. workers realized an increase of $0.92 in personal earnings with the result that $40.8 billion in annual operating outlays generated a total of $37.6 billion in new earnings for workers residing within these office market areas and respective state economies in 2009.
• For each $1 million in outlays for office building operations, 24.4 jobs were supported nationwide with the result that $40.8 billion in annual operating outlays supported a total of 994,728 jobs across all sectors of the national economy in 2009. This is in addition to the more than one million jobs supported directly as a result of these outlays for office building operations.

For more information, see www.boma.org

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Staffing levels to stay low

DURHAM, N.C.—Chief financial officers in the United States say they have limited plans to hire over the next 12 months, although nearly 60% won’t return their staffing to pre-recession levels until 2012 or later. Benefits and wages also remain at reduced levels at many firms, and credit is still tight for small firms, which is hindering hiring plans and constraining growth, according to the Duke University/CFO Magazine Global Business Outlook Survey.

The recovery is not completely stalled, however, as CFOs predict strong business spending and earnings growth.

Summary of Findings

• U.S. CFOs expect to increase domestic employment by less than 1% during the next 12 months. It may be several years before employment returns to pre-recession levels, which will weigh on consumer spending. Fewer than half of companies that cut employment packages expect to restore pay, training, and benefits to their pre-recession levels during the next year.
  
• Borrowing conditions remain tight, with roughly an equal split between firms reporting that credit conditions have tightened and those saying credit has eased. One-third of micro-firms (100 or fewer employees) say credit conditions have worsened in the past six months.
  
• Earnings are expected to rise 12% and capital spending 9% in the next 12 months. Research and development and tech spending will increase 4% to 6%.
  
• CFOs’ economy-wide concerns include weak consumer demand, federal government policies, price pressure and global financial instability. Top concerns about their own businesses include maintaining profit margins, low employee morale and health care costs.
  
• Fully 80% of European CFOs say the financial stability of Europe is severely threatened by the financial problems of Greece, Spain and Italy. At the same time, 68% agree strong European countries should provide financial support to economically troubled countries. About 30% believe Greece should be excluded from the "eurozone," but only 9% percent think Spain and Italy also should be excluded.

Employment, Capital Spending, Earnings

U.S. companies expect full-time domestic employment to inch up by 0.7% over the next year, while temporary employment will fall 0.2%. The labor picture is much worse in Europe (with a planned workforce reduction of 1.6%) and much stronger in Asia (with expected growth of more than 5%).
Nearly 60% of U.S. CFOs say it will be 2012 or later before employment at their firms returns to pre-recession levels. Among companies that instituted employment-related cuts in the past few years, fewer than half say during the next year they will restore bonuses, overtime, employee training and development, retirement benefits or health benefits to pre-recession levels. About half will restore wages and weekly work hours.

On a positive note, U.S. capital spending is expected to increase 9% over the next year, tech spending is expected to rise 6%, and advertising/marketing and research/development 4%. Earnings are expected increase 9% to 12 % in the United States, Europe, and Asia.

Top Concerns

The top two concerns for U.S. CFOs are weak consumer demand and the federal government’s agenda. U.S. CFOs, who expect to raise the prices of their products by 1.5%, are also worried about price pressure from intense competition. Maintaining employee morale is among the top company-specific concerns.

Health care costs also have reappeared among the top four concerns for U.S. companies, with corporate health care payments expected to rise 8% in the next year.

In Europe

Fully 70% of CFOs believe the emergency lending measures taken to date by European leaders will improve the European economy.

• The employment picture in Europe remains bleak. In the next 12 months, European CFOs expect to cut domestic full-time workforce (-1.6%) and part-time employment (-4.5%). They also plan to reduce marketing and advertising spending (-0.8%).
• While confidence in Europe’s economy has dipped after several quarters of gains, capital spending and earnings will increase about 10%.
• Borrowing in Europe has become more difficult: 29% of finance executives say borrowing conditions have deteriorated, compared to 19% who say conditions have improved in the past six months.

In Asia

• Top Asian concerns focus on intense price pressure, weak consumer demand, global financial market instability and currency risk.
• Attracting and retaining qualified employees is a major concern for Asian companies, especially in China. Other top company-specific concerns include achieving profit margins and maintaining employee morale and productivity.
• Asian CFOs expect capital spending to increase by nearly 12%, and say earnings will climb by just over 10%. Domestic employment will rise by more than 5 % in Asian countries.
• Among firms that cut employment-related benefits and costs during the recession, the majority have already restored or increased wages, bonuses, hours worked, and retirement and health benefits. Overtime hours are still somewhat restricted.

Detailed results are available at www.cfosurvey.org

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Tennessee airports gain funding

NASHVILLE, Tenn.—Federal aeronautics grants totaling $1,690,891 have been approved for six Tennessee airports. “Our local airports are vital to the economy and travel system of Tennessee,” said Bredesen.  “Investing in our airports helps keep them competitive and efficient at meeting the needs of businesses and travelers.” For more information, see www.tennesseeanytime.org

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British workers don’t feel loyal

LONDON—UK businesses face a staff backlash against ongoing pay and recruitment freezes with around one in four employees planning on leaving their company in the next year. The period of employees ‘battening down the hatches’ is beginning to end and could leave organizations vulnerable to the loss of highly skilled key workers at a critical time for economic recovery.

A study of more than 4,000 employees by leading market research company GfK NOP has revealed that around 13% of workers claim they plan to leave as soon as possible, with a further 11% hoping to leave within 12 months. Staff in the agriculture, transport and communication, energy and water sectors are the most likely to be actively looking for a new job.

For more information, see www.gfknop.com

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