Public-Private Partnerships: Background Papers for the U.S.-U.K. Conference on Military Installation Assets, Operations, and Services

By Ellen M. Pint; John R. Bondanella et al. | Go to book overview

Appendix G: MoD Initiatives in
Construction and Property
Management
MoD's initiatives to improve the management of its entire defense base holdings have resulted in new business processes. The two most prominent of these are, first, the reorganization of the administrative processes, relationships, and responsibilities between the Defence Estates (DE) and the remainder of the MoD; and second, the development of a new model for construction procurement based on “Prime Contracting.”DE was created in 1995 after the breakup of the Property Services Agency, which performed construction and maintenance management for all U.K. government agencies. DE was refocused in 1999 to provide central strategic management of the U.K. defense estate as a whole. During the 1980s, the PSA was perceived to be a very large and bureaucratic organization that did not perform well and was too closely linked to the construction industry. In the mid1990s, MoD was spending about £1.5 billion annually on construction, but its projects were frequently over budget and behind schedule. At that time, a small Defence Works Services team existed within DE to advise MoD clients and to let contracts on their behalf. However, that team stood back from direct involvement after the contract was let. As a result of the Labour Government's Strategic Defence Review in 1998, DE was given the task of changing the business processes associated with construction and property management.157Under the old processes, capital construction work and property management services were procured separately:
Capital construction: construction management was outsourced to a commercial project manager and a separate construction contractor.
Property management: the supervision and execution of all maintenance and minor construction work valued at less than £240,000 were contracted out for either a three- or five-year period to separate contractors (Works Services Managers and Establishment Works Contractors, respectively).

DE's new business philosophy follows the conclusions of a recent report by Sir John Egan on government construction procurement—that improved construction industry performance should be driven by the customer through effective partnering with a single prime contractor and its supply chain. DE's Prime Contractor program involves a single contracting organization that provides overall construction and maintenance services, either directly or as part of a team with other subcontractors. Under prime contracting, construction and facilities management are outsourced but the assets being built and managed belong to the government.

____________________
157
Discussions between Defence Estates staff members and RAND (Ellen Pint, John Bondanella, and Jonathan Cave), November 1, 1999, Sutton Coldfield, United Kingdom.

-129-

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Public-Private Partnerships: Background Papers for the U.S.-U.K. Conference on Military Installation Assets, Operations, and Services
Table of contents

Table of contents

  • Title Page *
  • Preface iii
  • Contents v
  • Figures ix
  • Tables xi
  • Summary xiii
  • Abbreviations xxiii
  • 1 - Introduction 1
  • 2 - U.K. Overview 3
  • 3 - Housing 33
  • 4 - Base Operations 51
  • 5 - Logistics 75
  • 6 - Comparisons and Conclusions 103
  • Appendix A - Conference Participants 107
  • Appendix B - Short Definitions of Key U.K. Initiatives and Terms 111
  • Appendix C - Mod Pfi Contracts 115
  • Appendix D - Case Studies of Two Pfi Contracts 117
  • Appendix E - Mod Executive Agencies 121
  • Appendix F - Privatization of Mod Married Quarters Housing 123
  • Appendix G - Mod Initiatives in Construction and Property Management 129
  • Appendix H - Privatization of the Royal Dockyards 133
  • Bibliography 139
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