Sara Bean talks to David Brewer, COO of the Defence Infrastructure Organisation (DIO), who explains the huge benefits of a recent overhaul to the procurement of MoD training estate, built estate and accommodation contracts, worth around £3 billion per annum
FMJ recently reported that the Defence Infrastructure Organisation (DIO) – the part of the Ministry of Defence responsible for infrastructure, including military housing, training and construction, had announced the shortlist of the FM services providers for its new Training Estates Services Framework Agreement. The successful contractors have the opportunity to tender for a range of facilities management services such as engineering and building maintenance, as well as specific defence-related requirements including specialist land, training area and rural estate management services.
The announcement heralds a new way of working for a key public sector department with an average spend of around £3 billion per annum in both the UK and overseas. The Future Defence Infrastructure Services (FDIS) programme will change how it approaches projects in the future, by increasing the number and range of suppliers, and enabling small and medium-sized firms as well as larger suppliers to bid.
Says David Brewer, Chief Operating Officer for the DIO: “The DIO provides everything from security services at ministry establishments to the catering, cleaning, engineering and maintenance. It looks after a massive training estate covering around two per cent of the UK land area and approximately 169 sites of special scientific interest. It’s also responsible for running large training areas in places like Canada and Kenya.
“We also have an important role in ensuring we provide the right environment for our service men and women to live and work. Our broad remit is to look after the service family accommodation, comprising around 60,000 homes around the world. We’ve got approximately 45,000 buildings in total that we look after and one of the most extraordinary things about our role is its breadth, variety and complexity. We are even responsible for a care home for military veterans”
Added to this says Brewer: “We undertake all sorts of major projects. This year we’ve completed work on the Army Basing Programme supporting nearly 100 Army units to relocate to the UK from Germany and dockside infrastructure for the Queen Elizabeth Class carriers to name just two projects.”
While the majority of what it does maybe familiar to FM providers, including running living and office accommodation as well as mess (catering) facilities, the DIO is also responsible for specialist services, ranging from the accommodation and facilities on a military base to radar and missile stations.
The DIO has three major components to manage; the military-built estate, the accommodation and the training estate. Over the course of its last round of contracts for accommodation and the built estate, although multiple contracts were up for tender just one organisation, a joint venture with Carillion and Amey won the business. Amey, which stepped in after the demise of Carillion, currently provides all of the built estate and accommodation services while Landmarc provides all of the training estate services in the hard FM space.
Says Brewer: “While we’ve been pleased with the way our current suppliers are working with us, we’d like to get more than a couple of suppliers in the mix. We’re not in any way dissatisfied with them but we do want to enter into a new period where the expectations are framed a bit differently, and reflects both the market and us as an organisation.
“We are really keen to make sure we’ve got a range of service providers across each of our disciplines. That will provide a bit of resilience and also the opportunity from industry providers to drive continuous improvement.”
He continues: “What is also important is that the contracts we have now were agreed during the last recession so you had some very clear messages out there to manage costs in procurement activities. The world has moved on. We’ve matured quite a bit as a client organisation and are aiming to become one of the most enlightened facilities and infrastructure clients in a major space. That means really genuinely wanting to build partnership relationships with the suppliers who work for us and major changes for us as we step up to the role of integrator and expert client.”
COST VERSUS QUALITY
Following a lot of debate in recent years over procurement in the public sector and concerns about a perceived race to the bottom in terms of the quality of delivery, the Cabinet Office published an Outsourcing Playbook. This stressed that it is “Government policy to award contracts on the basis of value for money.” It goes on to define this as securing the best mix of quality and effectiveness for the least outlay over the period of use of the services bought, making it clear that this is not about minimising up-front costs.
This presents a difficult balancing act, especially when you consider the size and scale of contracts in which DIO is involved. Says Brewer: “I have seen in past situations where contractors end up with the lowest common denominator, where one organisation is prepared to go unrealistically low and pulls everyone down with them.
“This is why we’ve tried really hard to get messaging out to people that this [procurement process] is about value for money and it is not a cost driven piece. The first thing is being really clear with the messaging to the market and to all the potential bidders that we are not looking for the cheapest solution. We are not going to allow any kind of game playing around with the financial models – but will scrutinise what is coming in rigorously – for instance that a technical submission is consistent with the financial submission, and that the two line up.
“We’ve also been pretty sophisticated in the way we’ve developed our assessment methodologies, using all of the methods that are viewed as best practice.”