This chapter discusses innovative methods of providing military base operations services in the United Kingdom, with comparisons to the U.S. Army. We define base operations broadly, to include support services provided on installations and in deployment, as well as construction and property management.71 We begin by providing background information on military base operations services in the United Kingdom and the United States. We then describe major military base operations initiatives in both countries. We conclude with lessons learned based on the British and American experiences.
The discussion draws on a number of initiatives by the U.K. MoD and the U.S. Army regarding alternative methods of providing government activities and services, ranging from specific service functions on a single base to the design and management of large-scale construction projects.
Greater use of the private sector to provide MoD support services has been a specific objective of government policy since 1979, and the MoD's use of contractors has increased considerably since the early 1980s. Early outsourcing efforts were based on “market testing,” i.e., a comparison of contractor bids with the in-house cost of providing the same services with public-sector employees. In some cases, efficiency improvements were built into public-sector cost projections, but often the comparison was simply with current public-sector costs.
In 1985, the government made it mandatory for MoD to market test catering, cleaning, laundry, security guarding, and minor grounds and building maintenance. But since the potential savings in these areas was relatively small, the MoD began to market test other, nonmandatory services, such as engineering and supply, range operation and support, and some types of training, in the hope of achieving greater savings. The MoD also combined multiple activities into a single contract in many cases. The development of service-level agreements and the creation of a single point of responsibility were key to achieving benefits from market testing.
Table 4.1 shows the number and value of competitions and first-year savings from market testing from 1987 to 1992. On average, first-year savings from market testing were 24 percent of previous costs. Among the mandatory services, over 90 percent of laundry and cleaning services were contracted out; 84 percent of catering units were market tested and 69 percent were contracted out by 1991, including competitions held before 1987. Relatively less progress had____________________