DIO to partner?

The Defence Infrastructure Organisation, which formally replaced Defence Estate in April 2011 has issued a formal invitation to private sector companies interested in managing the department’s estate.

Through a process of “soft market testing” the theory that best value for money will be achieved through greater involvement of the private sector will be explored.  The soft market testing will provide the opportunity for all parties to explore different and, hopefully original, ideas that will enable the best value for money agenda to be pursued.

DIO has already ruled out the possibility that an existing contractor could be chosen as a partner in this activity, with acting Chief Exec Andrew Manley saying that they would not be able to “bring the right mix”.  This rather harsh assessment would seem to condemn all current incumbents into a 'task driven, contracting only' role, perhaps a comment on previous procurement policy. 

DIO has announced that it is targeting savings of £1.2 billion over the next four years through efficiency measures and asset sales.  The MOD is owner to one of the largest estates of land and built asset in the UK.  Over 240,000 hectares of land, much used for training purposes, is owned and any potential asset sales, particularly of land parcels, will create significant interest.  The MOD acknowledges that DIO is obliged to consider the potential application of the Crichel Down Rules to all of its surplus sites.

Another factor in this exercise is the effect that the return of service personnel to the UK from Germany will have.  It is expected that all 20,000 troops will return over the next 10 years and the requirement for accommodation will be a significant element in the thinking.  Currently around 50,000 service family accommodation properties are managed on behalf of the MOD.