Guidance

Project Hestia

Updated 3 December 2014

1. Background

The Defence Infrastructure Organisation (DIO) plays a vital role in supporting our armed forces by building, maintaining and servicing the infrastructure needed to support defence; this includes providing Soft Facilities Management (Soft FM) Services across the defence estate.

In the UK, DIO currently delivers Soft FM services through more than 80 contracts with industry partners at a cost of around £250 million a year. The Hestia programme aims to consolidate Soft FM services into seven regional contracts, each in their own right a project.

2. Hestia overview

2.1 The vision

With a clear customer focus and working closely with delivery partners, Soft FM services provided by DIO will satisfy customer demands (now and in the future) through a delivery model that represents best value for defence.

Project Hestia will deliver a core set of standardised Soft FM services to defence sites within the UK including:

  • catering for entitled personnel
  • retail and leisure where provision is justified or it is provided as a retail opportunity by the contractor
  • cleaning and associated services including window cleaning, laundry, dry cleaning, tailoring, cobbling, domestic assistance and portable ablutions
  • waste management
  • Hotel and mess services encompassing single living accommodation (less accommodation bookings for junior ranks SLA)

Core services will be supplemented by those required in a particular location either to meet a unique need (e.g. equine waste disposal in London) or if a previously outsourced non-core service needs to be continued (e.g. gymnasium staff in Navy Command).

Hestia excludes sites covered by Public Finance Partnerships (PPP), Private Finance Initiatives (PFI), the Defence Training Estate, Housing, sites which have Total FM contracts in place (e.g. Abbey Wood), US Visiting Forces (USVF) and those with Soft FM contracts that outlive Hestia.

3. Desired outcomes of Hestia

Hestia will:

  • reduce the number of existing arrangements from around 80 to 7; this will make them more efficient to manage and offer better value for money
  • deliver contracts that are flexible enough to work with future defence needs and focus on meeting the needs of our customers
  • introduce a simplified and effective model that fits in with wider defence policy and initiatives, including ‘Pay as you dine’
  • enable effective joint working with delivery partners and suppliers
  • roll out projects in phases so we can incorporate lessons learnt as we progress

4. Regional Contracts

Region Contract Award In Service Date
South Qtr 1 2017 Qtr 3 2017
South East Qtr 3 2017 Qtr 1 2018
Scotland & Northern Ireland Qtr 4 2017 Qtr 2 2018
North Qtr 4 2017 Qtr 2 2018
Wales & West Midlands Qtr 1 2018 Qtr 3 2018
East Qtr 1 2018 Qtr 3 2018
South West Qtr 3 2018 Qtr 1 2019

All dates shown above are at 50% confidence levels which are the approved dates with risk added

5. Value for money

In the current fiscal climate it is essential that Hestia can demonstrate that the regional contracts will deliver the estate required by our armed forces in the most cost effective way. The tendering process will be used to ensure that successful bidders have the right culture of continuous improvement and value for money to be able to achieve this.

6. Assurance

Hestia is following the principles of Office of Government Commerce (OGC) Gateway™ process, and is running in 4 stages: initial gate business case, model research, model development, contract procurement and delivery through to main gate approval.

7. Engagement with industry

Hestia seeks to provide commercial opportunity through the procurement process for the widest possible array of potential prime contractors, subcontractors and supply chain businesses, across the UK and within the EU, irrespective of size or specialisation.

Hestia will also engage as appropriate with professional and trade organisations such as the Business Services Association (BSA) and Waste and Resources Action Programme (WRAP).

During the tendering process for the regional Soft FM contracts Hestia will organise site visits for bidders to provide knowledge and affinity for customer requirements, and using negotiated processes to help them develop their tender solutions against the statement of requirement.

Hestia will aim to open the supply chain up to small and medium enterprises; the creation of regional Soft FM contracts should help towards that and the team will work with industry to explore options for greater involvement of smaller and local businesses.

8. Other principles

Hestia contracts are designed to be sufficiently flexible to adapt to the emerging impact of wider change programmes on the future size and shape of the defence estate and the commercial activities required to maintain it.

8.1 Funding flexibility

The use of output specifications will enable DIO expenditure to be properly controlled and managed to ensure the new estate contracts are affordable within the current budget and sufficiently flexible to accommodate future fluctuations in defence spending.

8.2 Expertise

The ‘Hestia team’ has been recruited from across DIO and from the wider public sector and industry. It includes staff with a variety of professional qualifications, and experience of both the current DIO commercial arrangements and of contracting arrangements within other organisations.