Prime Contracting

Background

In our role as Prime Contractor to the Ministry of Defence throughout Scotland and the islands, we had total responsibility for the delivery of the estate for eleven years. The estate supporting operational output comprised 8000 assets, 4500 of which were operational, the remainder being housing stock.

The client had recognised that the estate was ageing, in a deteriorating condition and configured to support an obsolete operation. As a result it was the wrong size, in the wrong condition, unfit for purpose and occasionally in the wrong location.

What we did 

We conceived and delivered Prime Contracting in order to re-shape and refurbish the estate to support  the current MoD operation. To achieve the alignment of client and contractor necessary to deliver these outcomes, the contract was based on a target cost with incentives for achieving the desired outcomes.

 Contractor and client alignment  also required the development of an integrated delivery model to act as a backdrop to the change programme and to clearly define the roles of client and contractor. A shared vision, mission and objectives, supported by joint governance and business planning, ensured that activities and outputs were complimentary and collaboratively monitored.

We assembled an operating model comprising an optimised mix of self delivery and supply chain delivery. Supply chain partners were selected on the basis of alignment to vision, mission and objectives and shared in the incentivisation mechanism. 

In preparation for delivery, assets were assigned an operational priority and requirements for planned and reactive maintenance were targeted accordingly. Planned maintenance tasks were reduced from 240000 per annum to 165000. 

Condition and utilisation factors were collected and evaluated and the client targeted their share of maintenance savings at an investment programme of rationalisation (by sale and/or demolition) and renovation. The programme had a total value of £275M over the contract period.

Similarly, condition and utilisation factors were evaluated to establish new build requirements as part of a capital works investment programme. We delivered over thirty capital works as part of the Prime Contract using the incentivised target cost mechanism to establish further savings for re-investment. The capital investment programme totalled £246M over the contract period.

The Results

The deployment of Prime Contracting solution delivered control to the client in the management of our service delivery, asset compliance and investment and estate transformation. It represented a significant step change in return on investment.

Our delivery of targeted maintenance, rationalisation, renovation and new build generated savings in perpetuity of £23M per annum, as well as an estate tailored to support the operational output of the MoD in Scotland. 

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