MoD’s regional primes hit by funding setback

Uncertainty over programming and funds is hampering the delivery of the Ministry of Defence’s (MoD) £3bn regional prime contracts, according to the National Audit Office’s (NAO) Ministry of Defence: Managing the Defence Estate report.

The 39-page report, published today, revealed that the MoD’s five regional prime contracts, set up to provide a consistent approach to maintenance across the defence estate, are at risk of failing to live up to their expectations.

The NAO reported that due to balancing conflicting defence priorities funding levels were insufficient and that the contracts were more based on input rather than output specifications, resulting in inconsistent standards for maintenance across the estate.

The NAO argued that the changing priorities in defence meant that all planned works, including £10m of capital works projects, were not progressing, with contractors unable to deliver efficiencies that arise from a long-term programme of work through innovation and learning.

It added that disruption was being caused to supply chains, which would now make it difficult for them to be re-established.

Last week, a Carillion Services and Enterprise jv was selected as preferred bidder for the £500m Central area regional prime contract. CarillionEnterprise will be responsible for new build and refurbishment of 8,500 buildings over a seven-year period, with a possible three-year extension.

A start is due in April 2006.

Others in the running for the contract were: Amec Turner;  Debut Services (Bovis Lend Lease/Babcock Support Services); and Prime Serve UK (WS Atkins Facilities Management/Balfour Beatty Group).

The MoD has now awarded or selected preferred bidders for four of its five regional prime contracts – Scotland, South West, South East and Central.