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Preview of the Year – Defence

Defence procurement has been lengthy and subject to delays over the past couple of years, but big deals are now being awarded again with major frameworks up for grabs in 2014.

Two Ministry of Defence frameworks were awarded late in 2013 after years in procurement, and the Next Generation Estate Contracts will come into effect this year as existing arrangements expire in 2014.

Frameworks worth billions will be awarded this year, adding up to hundreds of millions of pounds in potential wins for individual contractors.

Five were appointed in December to a new £400m National Capital Works framework in December, with the East Midlands and East of England regional capital works framework awarded to five firms in November.

Balfour Beatty, Henry Brothers, Interserve, Kier-Graham Defence, Lend Lease, Miller, Morgan Sindall and Robertson will compete for up to five places on the four-year Scotland regional capital works framework, which will be used for the design and build of construction projects in the region valued up to £12m.

Ongoing regional procurement

The procurement process for four more regional capital works frameworks is continuing, covering the North-west, North-east and Yorkshire and Humber; West Midlands and Wales; the South-west; and the South-east.

However, there is uncertainty over the North and Central frameworks, after the MoD told Construction News in November that they were now subject to “anticipated demand for capital projects”.

One of the first contracts to be awarded in 2014 will be the Regional Prime Scotland and Northern Ireland contract, covering hard facilities management of 30 sites on the defence estate across the two regions. It is due to be awarded in Q1 2014 and in full service by July, and is worth up to £350m over five years.

The four shortlisted bidders are Babcock Support Services, Carillion Enterprise (a Carillion Services and Enterprise Managed Services joint venture), Interserve and TurnerHenry (a Turner Facilities Management and Henry Brothers JV).

There are three other five-year regional prime contracts with shortlisted bidders, with all three due to be awarded by March and in full service by September.

For the South-east, the shortlist comprises Babcock Support Services, Carillion Enterprise, KBR (Kellogg Brown & Root and Balfour Beatty Workplace JV) and PriDE (Interserve Defence and SSE Contracting JV). The contract is worth up to £1.2bn.

In the South-west, Babcock Support Services, Carillion Enterprise and Landmarc Support Services are in contention for the contract worth up to £1.35bn, while the Regional Prime Central contract (covering Wales, the North, the Midlands and East Anglia) is worth up to £1.8bn and sees Axiam (Interserve Defence and DynCorp International JV), Babcock, Carillion Enterprise and KBR in contention.

Housing prime primed

As well as hard FM, the national housing prime contract is due to be awarded by March this year after procurement began in February 2011.

The contract will provide repairs and maintenance to more than 49,000 UK military homes, grounds maintenance and housing construction projects of an individual value of up to £3.93m, with the total contract worth up to £1.5bn over five years.

There are three shortlisted bidders for the deal: Carillion Enterprise, Babcock and a Kier and Turner Facilities Management JV.

Similarly, a national training estate prime contract is due to be awarded by March, with Babcock, Landmarc and a Kellogg Brown & Root and Balfour Beatty Workplace JV vying for the contract, which is worth up to £900m over five years.

Deals to watch

Regional capital works framework Scotland
Value: up to £250m
Shortlisted: Balfour Beatty, Henry Brothers, Interserve, Kier Graham Defence, Lend Lease, Miller, Morgan Sindall, Robertson

National Housing Prime
Value: up to £1.5bn
Shortlisted: Carillion Enterprise, Babcock Support Services, Kier–Turner Facilities Management JV

National Training Estate Prime
Value: up to £900m
Shortlisted: Babcock Support Services, Landmarc Support Services, KBR-Balfour Beatty Workplace JV

Regional Prime Central
Value: up to £1.8bn
Shortlisted: Babcock Support Services, Carillion Enterprise, KBR, Axiam

Regional Prime South-west
Value: up to £1.35bn
Shortlisted: Babcock Support Services, Carillion Enterprise, Landmarc Support Services

Regional Prime South-east
Value: up to £1.2bn
Shortlisted: Babcock Support Services, Carillion Enterprise, KBR, PriDE

Regional Prime Scotland and Northern Ireland
Value: up to £350m
Shortlisted: Babcock Support Services, Carillion Enterprise, Interserve, TurnerHenry

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