News

Defence Estates outlines £500m-a-year spending programme

30 July 2010

The MoD’s Defence Estates could offer opportunities for firms hit by public sector cuts, Construction News reported.

Steve Rice, the Next Generation Estate Contracts programme manager told Construction News that the Scotland and Northern Ireland maintenance framework, the capital projects frameworks and the housing and training contracts will go to the market before the end of the year.

The remaining three regional deals - covering South-east England, South-west England and the rest of England and Wales - will happen a year later.

Rice said the work could benefit both large and small UK contractors. “We are not precluding anyone. Anyone who has an interest, we are willing to talk to them.”

With the £55bn secondary school renewal programme axed, hospital and social housing funding cut and the £1.8bn prisons building programme hanging in the balance, defence offers a rare glimmer of sustained public sector work over the next few years.

Although the exact level of spending will not be known until the Strategic Defence and Security Review is completed this autumn, the work is estimated to be worth at least £500 million per year.

“There is a reasonably healthy programme as far as we can see for both new-build and refurbishment. There will be buildings that will need to be replaced, buildings we will have new requirements for. Logically there will be a need for a considerable amount of work,” Rice said.

The defence estate is valued at more than £15bn; it spans 240,000 hectares and 45,000 buildings.

There will be a smaller number of maintenance contracts in the next generation of deals, and Rice warned incumbent contractors they would be under pressure to reduce costs to win work.

A wide range of work is covered by the capital works frameworks, from civils projects such as airfield pavements and sea walls to buildings works such as offices, garages, messes and specialist training facilities.

Rice said bids from joint ventures able to handle the variety of work were welcome. Defence Estates is holding a further industry day in October where it will set out more details of its future contracts.

Comments

MOD maintenance work worth £500M a year although welcome, will be a poor substitute for a healthy construction industry not only because of this relatively tiny sum but also because of the MOD tendering process. This has generally been mismanaged in the past as the consultants advising the MOD come up with ever more weird and wonderful tendering procedures resulting in huge waste in time, paper and money spent by the tendering consortia.

The last such tender process for the selection of Prime Contractors for the five regions, which also included for significant new build, took the best part of 2 years. The response (by all bidders) to the numerous and largely meaningless questions about intentions, environmental and sustainability issues would have easily cost more than a million A4 sheets of paper, and countless hours at the computer. Each bidder could have spent close to £1m all told on the tender effort.

Beefing up the tender documents and tying up tenderers with all sorts of promises and statements of good intentions has not produced better contract and site managements. So please MOD, stop making the process more complicated and wasteful than it needs be.

Ramsey Joseph, 1 August 2010

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