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The Ministry of Defence has launched its procurement for a private sector partner to manage 拢20bn worth of defence estate

Phillip Hammond said the Defence Infrastructure Organisation (DIO) would begin the process to procure a strategic business partner (SBP), which would manage the defence estate, worth nearly 拢20bn and including around 4,000 sites.

The OJEU notice for the strategic business partner was published today.

The Ministry of Defence said it wanted to create 鈥渁 sustainable, efficient and professional organisation at the best cost to the taxpayer鈥�.

鈥淭he procurement exercise launched today aims to do that and could help transform DIO into a world-class public sector infrastructure delivery organisation,鈥� the MoD said.

It said that through the procurement process the DIO would test whether the strategic business partner could:

• Manage the DIO鈥檚 operations and staff, initially as part of DIO鈥檚 existing organisation. It said it was envisaged that this will include 鈥渞eviewing the organisational structure presently being put in place by DIO to advise on what further efficiencies can be driven from the business, what additional skills are required to deliver DIO鈥檚 strategic objectives and the options for providing those skills鈥�.
• Develop and implement a strategic asset management plan to 鈥渋ncrease the utilisation of the estate, which will lead to rationalisation and commercialisation opportunities鈥�.
• Further develop and implement the transformation of the DIO
• Manage existing and new suppliers and other third party arrangements
• Develop contracting strategies to drive further efficiencies and deliver better value for money for the MOD across its estate

The move comes after the DIO launched a 鈥榮oft-market test鈥� earlier this year on its plans to procure a private sector partner.

the DIO was 鈥渂esieged鈥� with expressions of interest with 鈥渂ig names鈥� such as Serco, Capita, Babcock, and CH2M Hill all expressing an interest. Other firms said to be interested include Telereal, Trillium, Sodexo, Interserve, Carillion, Land Securities, and GVA Grimley.

The DIO is managing the 拢5bn New Generation Estates Contract (NGEC) programme, which includes a 拢1.5bn contract to provide repairs and maintenance to the more than 49,000 UK military homes.

However, in January the DIO said no NGEC contracts would be awarded this year,

Andrew Manley, chief executive of the DIO, said: 鈥淪ince 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.

鈥淥ver 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 will enable us to deliver 鈥� savings.鈥�