The Ministry of Defence has formally launched the selection process to find a private-sector partner to manage its £23bn estate.
The lucrative contract could see the successful bid team take on the majority of the work currently undertaken by the Defence Infrastructure Organisation, the MoD’s property and services provider.
DIO invited 12 companies to a soft market testing exercise earlier this year. The firms included Babcock, Bechtel, Capita Symonds, Carillion, CH2M Hill, Interserve, Jacobs, KBR, Mace, Serco, Telereal Trillium and URS.
Several of the firms have since formed consortia and among those tipped as front runners for the contract are a Telereal Trillium-led team, Jacobs and Jones Lang LaSalle, URS and Capita Symonds and Land Securities and Serco.
The initial value of the contract is estimated to be around £40m a year but if the successful consortium is to take on the majority of the DIO’s target 3,000-4,000 staff, one bidder estimated it could be worth up to £300m a year.
DIO expects to appoint a partner by April 2013, subject to approval from Treasury.
The partner will initially work as part of DIO’s existing organisation, seeking cost savings and advising on how to achieve its aims.
It will oversee a sell-off of thousands of acres of MoD land and assets and will be responsible for managing existing and new suppliers to DIO.
DIO chief executive Andrew Manley said: “Since DIO was formed last year we have been at the forefront of the wider reform going on across this department. During that time we have achieved a significant amount and I believe a strategic business partner could take DIO another step closer to becoming a world-class public-sector infrastructure delivery organisation.
“Over the coming months we will be considering whether a strategic business partner can help us continue, and build upon, the transformation programme that we have already made significant progress on, and can enable us to deliver SDSR savings.”
jack.sidders@estatesgazette.com
