Suppliers invited to build MoD housing contracts

23 May 2011

23 May 2011 | Lindsay Clark

The Ministry of Defence (MoD) is engaging with suppliers early to innovate in housing maintenance and management contracts to be awarded next year.

The defence procurement teams have been using supplier events to explain how the new contracting process will work, as well as gathering ideas for improvements.  

Around 90 businesses that have expressed an interest in managing, maintaining or supplying the UK’s 49,000 military homes through the new National Housing Prime contract, which could be worth up to £1.5 billion, attended one such event which took place earlier this month.

The end-to-end contract could, for example, allow suppliers to manage all repairs up to £1,000 for a fixed fee upfront, rather than billing for individual jobs, project manager Colonel Bill Morris told SM.

“The more the MoD get in the way of what the contractor should do for the customer, the more we add cost and delay into it,” he said. “What we want to do is get the contractor to do the majority of the work in a more automatic manner, [so] we don’t have to interfere with them. For that, we need to make sure the work is divided up and specified correctly and we can delegate the risk, where it’s appropriate, to the contractor.

“If we contract out little bits individually … you can see that process is mucky and open to having our bureaucratic footprint on it,” Morris added.

It would be up to the contractor to run a helpdesk and determine whether the repair job was worth doing, based on agreed criteria. The MoD would then check that assurance programme “rather than checking all the jobs individually”, Morris said.

By inviting suppliers to provide input, the MoD hoped “to get a better contract and a better content for the contract”.

The event also allowed potential prime contractors to talk to small and medium-sized businesses that could form part of the subcontracting supply chain, he said.

The National Housing Prime contract will be awarded in late 2012, and will run from April 2013 for five years initially, with the option to extend it by a further five years. It is estimated to be worth up to £1.5 billion over 10 years, depending on which services are included and on whether the contract is extended.

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