Our country's defence estate is vital to military effectiveness - whether for training units deploying to Afghanistan, maintaining essential operational facilities like airfields and barracks or providing homes for service personnel and their families.
Current commercial contracts for the UK military estate come to an end in 2013/14. Against the backdrop of military operations and the current fiscal situation, Defence Estates, the MoD's land and property organisation, is working hard to develop truly cost-effective new contracts with industry.
The Next Generation Estate Contracts (NGEC) programme seeks to ensure continuity of that essential support to the frontline – whatever the evolving requirements from this autumn's strategic defence and security review.
As we develop the shape of our future estates contracts, we recognise that austerity measures are essential and are working to minimise the impact on our armed forces. But we also recognise that examples of best practice – and to some extent the solutions – are already out there, within the MoD and wider government and across industry.
Since late 2008, Defence Estates has been working closely with our armed forces to gather their views on the current arrangements. One recurring issue, for example, is the need for improved estate condition data so we can better prioritise where to allocate resources.
Across industry, we have engaged an ever-growing number of interested stakeholders through a series of events to update and consult. We have also engaged more than 60 companies through focus groups on key areas of contract development, such as incentivisation, pricing, and energy and sustainability.
Our engagement with the wider public sector is equally important. We have worked with organisations such as the Highways Agency, Home Office, NHS, Hampshire county council, British Airports Authority, Ministry of Justice, Department for Work and Pensions and many others. They have provided valuable ideas, lessons learned, and best practice from their own commercial experiences in construction and facilities management.
Flexibility will be the key to dealing with uncertain future funding. Like every other government department and agency, we expect tight constraints for the foreseeable future, but it is harder to predict accurately the funding levels – or estate requirements – in five or 10 years' time. Contracts and contractors will need to be adaptable to changing levels of work and revenue.
Meanwhile, the imperative to deliver value for money presents as much a challenge for the MoD as it does for its suppliers. We must work with industry to decide how best to drive good performance.
For these reasons, we are looking at innovative ways to do business in the future. Could the contractor fund work to produce low-carbon facilities and recover their costs through the energy savings? Could they secure the necessary planning permission to allow the disposal of surplus estate and be paid out of the sales proceeds?
NGEC offers a real challenge and opportunity for industry – particularly for those companies with an innovative, flexible approach to working with the MoD. Together with such companies, we can find solutions for managing a diverse and complex operational estate which fits the future needs of UK defence.
Steve Rice is head of the Next Generation Estate Contracts programme at Defence Estates
From Flip Chart Fairy Tales
From Bubb's Blog
