Vinci Facilities, Amey and Vivo win UK defence contracts
VINCI Facilities has been awarded an estimated £1.1 billion contract to provide facilities management services to Ministry of Defence (MoD) for its Built Estate across the South East of England. The total contract is for a seven-year term, with an option to extend for three additional years.
The deal includes £423m for the core contract and a potential £732m for billable works. It is one of four regional hard FM and capital works contracts and VINCI Facilities will be managing over 6,200 buildings and infrastructure assets supporting a significant number of MoD military and civilian personnel in over 59 establishments and is being mobilised now.
It is among a flurry of deals involving the MoD and Defence Infrastructure Organisation (DIO) this month.
Amey has secured two contracts with the DIO to maintain Service Family Accommodation (SFA) across its Central and Northern regions.
The contracts, which fall under the Regional Accommodation Maintenance Services (RAMS) element of the Future Defence Infrastructure Services (FDIS) will run for seven years with an option to extend for an additional three. In addition to the core services, which include housing maintenance, the contracts will deliver improvement projects and refurbishment work to approximately 25,000 properties.
The contract award follows Amey successfully delivering maintenance solutions under National Housing Prime - procured under the Next Generation Estates contract in 2014. Amey’s defence team will work with the DIO to provide enhanced services, as outlined within the new FDIS requirement, through collaborative working and improved data management.
RAMS will support more than 500 jobs within Amey and its key supply chain partners in both the Central and Northern regions. New ways of working will provide opportunities for flexible employment, meaning members of the military community, parents, and carers will be able to access jobs. This will translate into more choice and flexibility for people living in SFA.
Craig McGilvray, Managing Director of Amey Secure Infrastructure, said: “We recognise the important role housing plays to military personnel and are committed to providing an enhanced service that not only improves living standards but contributes to thriving communities.
“Supporting and sustaining regional and local supply chain partners remains a core part of Amey’s agenda and we are pleased that our delivery model will support specialist contractors across Britain including Northern Ireland.”
Air Commodore James Savage, DIO Head of Accommodation, said: “Accommodation is such an important part of family life for Servicemen and women, which is why we collaborated closely with representatives of our Service personnel and their families to develop these contracts and ensure that their needs are fully considered.
“These new contracts offer the opportunity to break decisively from the past and to build on the commitments made by all suppliers to innovate and deliver more responsive and flexible services to the Armed Forces and their families.”
This month VIVO Defence Services (VIVO), a 50/50 Joint Venture between Serco, the international provider of services to governments, and ENGIE were awarded contracts to provide asset and facilities management services for the UK Defence built estate by the Defence Infrastructure Organisation (DIO).
VIVO has been awarded contracts for two of the four regions being tendered under Lot 3 of the Future Defence Infrastructure Services (FDIS) programme. VIVO will be responsible for providing services in the South West and Central regions of the UK, the largest two regions of the four that were competed, and which represent around 2/3rds of the MOD’s estimated value of Lot 3 of the Future Defence Infrastructure Services contracts.
The total core contract value to VIVO for the two regions is estimated to be around £900m over the initial seven-year period. There are a further three one-year extension options. In addition to the core fixed price contract for each region, there will be significant amounts of additional project work, which will be commissioned as required by the DIO. The Ministry of Defence estimates that they are likely to be worth a further £2.5bn over the initial seven-year term.
Collaborate to avoid commercial risks and systemic failures
Clients should work collaboratively to minimise commercial risks and avoid inappropriate risk transfer as this will not only lead to a negative outcome on individual contracts but also systemic failure in a fragile market, the Construction Leadership Council has warned.
The CLC, in collaboration with NEC, has today published joint guidance to industry and clients on dealing with and accommodating the impact of Covid-19 on work under NEC4 contracts.
The guidance adds to the suite of outputs from the CLC’s Business Models: Contractual Best Practice group which has routinely called for strategic collaboration between clients and the supply chain to avoid systemic market failures and compromised project delivery.
The guidance focuses on the NEC4 Engineering and Construction Contract (ECC), although it can also be applied to the NEC4 Engineering and Construction Subcontract (ECS), NEC3 ECC and ECS, subject to some amends which are outlined within the guidance.
To help clients and the supply chain to collaborate, the joint guidance offers support in navigating a number of circumstances within the context of the Covid-19 pandemic, including: Act of prevention; Project Manager’s instructions; Compensation events; Evaluation of a COVID-19 Related Compensation Event; Working Areas; Resource Utilisation; and Dealing with risk on future contracts.
Steve Bratt, Chair of the CLC’s Business Models Workstream said this guidance was developed in response to a series of questions which were raised with regard to projects impacted by Covid-19 operating under NEC contracts.
“As industry continues to manage the challenges of Covid-19, we are becoming increasingly concerned that many outstanding disputes remain unresolved and much uncertainty exists with regard to future contracts," he said. "We are therefore keen to do all we can to ensure clients work with their supply chains to fairly and collaboratively manage the commercial risks caused by Covid-19. Safety is paramount, but collaborative risk sharing will ensure secure project delivery and a long-term sustainable industry.”
Covid-19, safe working procedures and wider disruption has presented all parties with unquantifiable and unmanageable risks and costs, he added. Traditional behaviours such as inappropriate risk transfer will not only lead to a negative outcome on individual contracts but will almost certainly lead to systemic failure in a fragile market seeking to build back greener and better.
Peter Higgins, Chairman of the NEC4 Contract Board said NEC is pleased to have worked with the Construction Leadership Council in preparing this advice on dealing with covid-related issues under NEC contracts. "NEC has always been a contract focusing on the parties working together to achieve a successful contract, and this guidance will help in managing collaboratively the risks which have arisen from COVID-19," he said.
Industry leaders have called for acceleration of rules relaxing requirements for COVID-19 self-isolation for double-vaccinated workers. Currently the rules will only be relaxed on August 16.
CLC co-chair Andy Mitchell said it has received reports from across the industry of plants, sites and offices having to wind down activities as staff have been asked to isolate.
"This is putting very significant pressure on the sector, risking project delivery and even the viability of some firms. Where staff are already fully vaccinated, and recognising that such people will be free to work from 16 August anyway, we are asking the Government to bring forward this date for essential industries like construction, ensuring that the industry doesn’t grind to a halt."
An RICS survey of the global construction sector found over 40% of professionals reporting an increase in disputes since the onset of the COVID-19 crisis. By contrast, fewer than 3% of respondents noted a fall in disputes over the same time, suggesting that the pandemic is exerting further pressure on an already stressed industry.