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MoD admits slippage in £5bn construction programme

25 Jun 12 The Defence Infrastructure Organisation’s £5bn Next Generation Estate Contracts (NGEC) programme has already been hit by delays before any contracts have even been awarded.

The DIO, which is the property arm of the Ministry of Defence, has revised the timings following a review of the procurement schedule for its future UK estate commercial arrangements.

Under NGEC, the DIO 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.

The prime contracts will now be awarded in early 2014, and the first capital works framework – for East Midlands and eastern England – will be awarded in August 2013. DIO said that this revised schedule “reflects the impact of various emerging factors, including the Strategic Defence and Security Review (SDSR), the creation of DIO and the high degree of industry interest shown by industry which led to the evaluation process taking longer than planned”.

HM Treasury has formally approved the changes to the programme and the necessary extensions to the existing UK contracts.

Steve Rice, Head of NGEC, said: “We now have in place formal approval to take forward this major procurement programme, and I am encouraged by the enthusiasm of industry to be involved in delivering these new contracts. We all recognise the importance of NGEC for our military customers, and we will continue to work with our current contractors to ensure that existing service levels are maintained right up to the new arrangements coming into service.”

The programme is in the early stages of competitive dialogue and bidder tendering for the prime contracts and capital works frameworks.

The setting up of NGEC is part of a Transforming Defence agenda, to remove bureaucracy from the MoD and make it smaller.  

NGEC revised programme

Contract award

In-service

Regional Prime Scotland & Northern Ireland

24/01/14

21/07/14

National Housing Prime

05/03/14

05/11/14

National Training Estate Prime

05/03/14

22/09/14

Regional Prime South East

17/03/14

30/09/14

Regional Prime South West

17/03/14

30/09/14

Regional Prime Central

17/03/14

30/09/14

Regional Capital Works Framework East Midlands & Eastern England

16/08/13

National Capital Works Framework

18/05/14

Other regional frameworks

To be confirmed

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