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Four forced to wait until 2014 for revised £350m defence deal

The Defence Infrastructure Organisation is set to begin competitive dialogue with the four bidders for its first regional facilities management contract, now valued at up to £350 million.

Carillion, Interserve, Babcock Support Services and TurnerHenry are competing for the first of the DIO’s four regional facilities management contracts developed under the Next Generation Estate Contracts programme.

The Regional Prime Scotland and Northern Ireland contract was originally valued at up to £500m and was due to be awarded in August with work commencing in 2013 but it will now not be awarded until ‘early 2014’.

The DIO say this is due to several ‘emerging factors’ within the procurement schedule including the ‘high degree of industry interest shown by industry which led to the evaluation process taking longer than planned’.

CN revealed in August 2011 that the £5bn NGEC Programme was set to encounter delays with a revised programme being formulated.

It said: “DIO wants to ensure that all NGEC stakeholders – including staff, current contractors, DIO customers and wider industry – have a realistic expectation of the achievable timeframe for these contracts. It is therefore reviewing the NGEC programme timetable to ensure that it reflects the evolving and complex circumstances in which these contracts are being procured.”

The DIO issued OJEU notices for further facilities management contracts worth up to £4.35 billion over a five to 10 year period in February.

The deal covers a five-year period and incorporates around 30 key sites including Fort George Barracks, RM Condor, Glencorse Barracks and Craigiehall in Scotland, and Aldergrove Airfield, Thiepval Barracks and Kinnegar Logistics Base in Northern Ireland.

Up to five representatives from each of the bidders will now attend an initial one-day ‘competitive dialogue’ session at Forthview House in Rosyth, the main DIO offices in Scotland.

Bidders will be asked to share supply chain development plans and offer innovative solutions for reducing estate management costs.

Following the initial dialogue, bidders will then be asked to develop outline solutions to meet the service requirements. Further dialogue will follow, with each bidder being invited to submit a more detailed technical solution in summer 2012.

The NGEC Programme is developing a new suite of contracts for the UK Defence estate, comprising four Regional Prime contracts for hard facilities management, one national and six regional Capital Works Frameworks for construction projects, a National Housing Prime contract, and the National Training Estate Prime contract. The contracts are estimated to be worth between £500m and £600m per annum, and more than £5 billion over 10 years, exclusive of construction projects.

Contract project manager, John Brennan said: “Defence transformation is driving fundamental changes to the military estate, including the scope of this geographically varied and challenging contract. These discussions should provide bidders with a coherent understanding of what is needed, from which to develop innovative and cost-effective solutions to support our Armed Forces.

“The successful bidder can expect wider responsibilities than current DIO industry partners, so we are also considering the bidders’ capacity in new areas such as managing energy consumption, reducing carbon emissions, and providing more comprehensive asset data and estate-related management information.”

NGEC commercial manager, David McLaughlan said: “A good prime contractor needs healthy, robust supply chain arrangements, which is why we will be exploring bidders’ plans in this area of development during this key stage in the procurement process. For smaller businesses with innovative estate solutions, the message is to make your offering known to each of the four bidders for this contract as early as possible.”

Contact details for each bidder are available on the NGEC website at:http://www.mod.uk/DefenceInternet/MicroSite/DIO/OurPublications/NGEC/IndustryDaysAndPotentialBiddersDirectory.htm

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