The Ministry of Defence has announced an overhaul of Defence Estates' procurement strategy, which will mean a new structure for £5bn-worth of contracts to be awarded over the next four years.
The contracts, each worth an estimated £500m annually over 10 years, are exclusive of additional major projects.
This follows an 18-month programme of consultation with the construction industry, private sector clients, Government, and users of Defence Estates facilities.
The changes are as follows:
- Routine maintenance services will be delivered through four 'Regional Prime' contracts, covering: Scotland and Northern Ireland; North of England, Wales, the Midlands and East Anglia; Southwest England; and Southeast England. This will involve merging the existing delivery teams for the Regional Prime Contract Central and the Regional Prime Contract East into a single delivery organisation, and merging the delivery teams covering Scotland and Northern Ireland into a single Regional Prime. The Regional Primes may also deliver some construction projects with a value up to £3.93m.
- Construction projects will mainly be delivered through 'Core Works Frameworks'. There may be additional 'Functional Frameworks' for Single Living Accommodation (SLA) and airfield pavements, should there be sufficient demand. For very large projects, the options will be standalone prime contracts, private finance initiatives, or other novel financial structures. In addition a number of 'Regional Frameworks' will establish lists of pre-approved suppliers for major new-build projects.
- Defence Training Estate (DTE) will have a single UK-wide 'National Training Estate Prime' contract delivering range technical support, hard facilities management, soft facilities management, and training range booking services.
- Housing maintenance services will be provided through a single UK-wide 'National Housing Prime' contract. Housing allocation and some other management services may be transferred into this new contract.
David Olney, the acting chief executive of Defence Estates, said: "This approval is the culmination of much hard work across the department, and provides the springboard to put in place improved contracting mechanisms which will service the needs of our Armed Forces until 2020 and beyond. We are working with industry to deliver best value from every pound spent."
Defence Estates will will start inviting companies to submit expressions of interest this autumn.
Contracts will be awarded to successful bidders in a phased approach between late 2011 and 2014.