The MOD has announced that it will develop six regional capital works frameworks for construction projects valued below £12m and one national framework for higher value projects, more complex projects and cross-region programmes up to a value of £50m, under its Next Generation Estate Contracts (NGEC) programme.
Industry is now invited to submit expressions of interest, marking the start of the procurement process for these new commercial arrangements.
The regional frameworks are designed to demonstrate ever improving value for money in MOD construction projects, and an opportunity for a greater proportion of Small and Medium-sized Enterprises (SMEs) to be involved in the frameworks.
The regional frameworks will cover: Scotland; the North East, North West and Yorkshire and the Humber; the West Midlands and Wales; the East of England and East Midlands; the South East (including London); and the South West.
For each framework the MOD will select a pool of up to five pre-approved suppliers, who will then be asked to submit competitive bids on a project-by-project basis. The framework agreements will run for four years, with the option to extend them for up to a further three years.
Companies expressing an interest in the regional frameworks will need to have had a minimum £20m annual construction turnover in recent years, reflecting the scale of construction projects these companies would need to deliver. These regional frameworks will, however, provide opportunities for SMEs below that threshold to be considered as potential subcontractors.
Estimated total contract values over the four-year period are between £100m and £250m for each of the six regional frameworks, and between £250m and £400m for the national framework. It is expected that all frameworks will be awarded by Autumn 2012.
David Olney, the Deputy Chief Executive of Defence Estates, said:
In these financially challenging times, we are looking to suppliers to deliver value for money. We recognise the potential for smaller enterprises to contribute here, alongside larger national and multinational suppliers.
“That is why we are opening these commercial opportunities up to a mix of company sizes.”
Steve Rice, Head of the NGEC programme, added:
We have consulted widely with the DE customer community, industry and wider Government, and have concluded that we need to widen the scope for suitably experienced companies in the SME category to be involved in smaller construction projects.
Irrespective of size or specialisation, future suppliers will have to meet MOD’s demanding requirements and will need to demonstrate innovation, enough flexibility to meet the evolving requirements of the Armed Forces, and a willingness to make a proactive contribution to energy efficiency.
Tender adverts for the Capital Works Frameworks will be published in the Defence Contracts Bulletin (DCB) for DCB subscribers and more widely on the free of charge Tender Electronic Daily (TED) service (ted.europa.eu) under the Official Journal of the European (OJEU).