Regional prime contract
The Ministry of Defence spends in excess of a billion pounds a year on its facilities, of which more than half is on maintenance and refurbishment of the existing structures. The Ministry of Defence undertook a review to improve its procurement procedures. As part of the review the prime contracting model for procurement of new assets and maintenance of existing assets was implemented.
A prime contractor has overall responsibility for the management and delivery of a project to meet the output specification efficiently, economically and in a timely manner. Scotland was the first of the first-generation regional prime contracts to be tendered. This prime contract covered the maintenance of the majority of all Ministry of Defence facilities in Scotland and new capital projects over a ten-year period. The capital projects delivered included accommodation and messing facilities, runway upgrades/resurfacing, aircraft maintenance facilities, security upgrades, infrastructure and control centres.
Currie & Brown was part of the Turner Estate Solutions supply chain to provide commercial support in relation to financial planning, cost management, risk management and whole-life costing.
The prime contracts included maximum price target cost (MPTC) pricing provisions, which is an arrangement whereby the prime contractor has incentives to reduce costs through innovation and at the same time increase the percentage profit return against properly incurred actual costs. Our principal function was to work with the prime contractor to agree MPTC allowances and monitor/audit to completion.
The success of this project required a ten-year relationship demanding a cultural change by all parties. Currie & Brown supported parties with key contractual negotiations, leading the way to win/win outcomes. As we were engaged from project inception, we had the opportunity to provide advice that could support the challenges of the project solutions, thereby ensuring that the best value-for-money solution was considered and adopted.
Whole-life performance of buildings is a specific requirement of the Ministry of Defence. As part of the project team, we identified the areas where future facility operational costs could be reduced and helped ensure that informed investment decisions were made.