DIO Soft market testing findings published

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Defence Infrastructure Organisation (DIO) has published the findings of a recent 'soft market testing' exercise, which sought industry's views and feedback on potential strategic business models that DIO may adopt in the future.

In November 2011 the Defence Board reviewed the work that DIO had undertaken so far in identifying a number of different strategic business models that the organisation could adopt. These included models that would involve transferring some or all of DIO’s operational activities to the private sector and the Defence Board endorsed DIO progressing with this work, and looking at how these potential options might work in practice.

In January 2012 DIO issued a Prior Information Notice (PIN), which invited external parties to participate in the ‘soft market testing’ of the potential strategic business models. Soft market testing seeks to explore potential roles for the private sector, test some of the commercial principles being considered, and understand the likely interest from industry. The issuing of the PIN marked DIO’s intention to engage with the market, but was not a commitment to enter into any formal procurement.

DIO was seeking feedback in a number of areas to inform the options analysis of the strategic business models, including industry’s views on opportunities for private sector involvement in DIO’s operational activities. DIO has now published a summary of the written responses to the PIN in line with commercial good practice guidance.

Of the companies that responded to the PIN, a cross section were down-selected by DIO to take part in the soft market testing process. These companies took part in structured interviews and provided detailed written answers to a questionnaire set by DIO.

Key findings included a strong interest from industry to be involved in DIO’s transformation. Industry’s preference is for DIO to transfer all of its operational activities to a partner, rather than the partial transfer option. Industry would also prefer to see a contractual term long enough to allow them to fully transform the business and deliver long-term benefits.

David Marsh, DIO Director Business Partnering, said:

The soft market testing process for strategic business models has been very helpful in DIO’s options analysis. I would like to thank the companies that took part