Defence Estates, the Ministry of Defence’s property arm, has revealed that it is piloting two variations on its prime contracting procurement route.
Chief executive Ian Andrews announced the pilots at a conference last Friday. He said that, under the first type of contract, a single contractor will be appointed to act as a one-stop shop and will look after the MOD’s building programme in one region for at least five years.
The second type of contract cuts across regions and spans the different armed services. This is being piloted on a scheme to provide ground lighting at about 40 airfields.
Andrews said negotiations with a number of firms were under way for the contracts.
Ted Pearson, commercial director of Defence Estates, told Building that the one-stop-shop trials would be small scale, but that others would be started within five years.
The regional contracts will be seen as the jewel in the crown of the prime contracts, as firms will enjoy a steady stream of revenue for five years.
Andrews said that further details on prime contracting would be revealed early next year. He said: “The ideal partnering arrangement is when we can say: ‘We need a new building to do this’ and the contractor comes back and says ‘No you don’t’.”
He said contractors would have to embrace “effective project and supply-chain management”, “fitness for purpose” and “fair payment of subcontractors”. Andrews added: “We want a taut contract that clearly articulates responsibility so as to minimise the risks of expensive claims and counterclaims. But we will also need some provision for dispute resolution.”
A Defence Estates source said that a new strategy for property would be launched in January or February. The review would look at how the MOD could manage buildings more effectively.