On a small scale, most people are aware that any type of improvement to a property involves rallying the right specialists and coordinating work to take place to fit a tight schedule. This often involves a lot of trust and a belief that all the work will be done on time, within budget, to the best of abilities and to the highest standards for the specified outcome. What happens though, if your budget is about 2 billion GBP and you are the Ministry of Defence? The need for high quality and affordable improvement mixed with respect for the sensitive nature of the work to be carried out can only be managed one way; through prime contracting.
Traditionally, the MoD have entrusted all the maintenance and building work that needs to be done to individual contractors, which prior to legislation change in 1997 totalled around 800 for the year. The need to save money and to create some form of cohesive team that understood that the 'soft issues' of culture, creativity and innovation were just as important as more concrete variables such as cost and quality, commonly labelled as 'hard issues'. The aim was to bring development practice within MoD development to ratio of 60 to 40 of hard issues against soft issues and a ratio of 80 to 20 for quality against price. This reflected a change in attitude and direction within the industry, where the emphasis was no longer on creating a to-do list for contractors, and instead creating a contract whereby the terms of agreement were based on output specification. This was only achievable by selecting one prime contractor.
It was hoped that this move would save the Mod in the region of 500 million GBP and create a more secure system for getting essential work done. It does seem that in these times of heightened security that it makes sense to only have one contracting body coordinating work that has the potential to be politically sensitive. The ratios stipulated also reflect the desire for work to be carried out in accordance with the soft issues that are of importance rather than just drawing up plans that would get the work done quickly and cheaply. The main principles involved in prime contracting involve the coordination and collaboration of sub contractors that are working for a united goal.
The process of output specification by way of determining a contract ensures that the end result is clear, and it is then the job of the prime contracting company to ensure that it is achieved according to the directives set out in the legislation, aiming for the specified ratio balance. When drawing up the collaborative plans, the prime contractor has to produce a bespoke plan that is sensitive to MoD protocol and makes judgements on costing after the technical capabilities and issues of sensitivity have been dealt with.
Ultimately, the benefits of using a prime contractor to carry out the work means that the MoD can explain what they want and then let the contractor deal with the rest. The contract will basically agree to cover all the elements that are requested, including health and safety, design, development, facilities management, portfolio production et al to deliver a service that has every aspect covered from beginning to end in a single package. The damage limitation of this type of contract is enormous, not only in terms of security, but in functionability, something that was difficult for the MoD to manage under the former process.
Author Resource:-
Dom Donaldson is an expert in the Prime Contracting Industry.
Find out more about Prime Contracting and the type of service you can expect from URS Corp.
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