Mark Jenkin, Defence Support and Reform Group: Effectively working with industry to achieve ‘Value...
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Transcript of Mark Jenkin, Defence Support and Reform Group: Effectively working with industry to achieve ‘Value...
The 2nd Annual Defence Support Services Summit
Partnering with Industry
Mark Jenkin – Head Defence Support Operations
Outline
Effectively working with industry to achieve “value
for money” in Defence Support
• Defence Support Operations
» Where, who, what and why
» Contracted services
• How - priorities
» New Operating Model
» Base Services Retender
Who
DSO STRUCTURE
Mark Jenkin
Head
Defence Support Operations
Sue Parr
Garrison, Estate &
Business Support
CDRE Jaimie Hatcher
Base and Customer
Support Services
Regions:
Central West – Ron Hunter
Nthn NSW – Larry Robbins
Sthn NSW – James Simpson
Qld – Gerald Griffin
Vic/Tas – Steve Georgiou
What we do
• Three key roles DSO performs for Defence are:
– Whole-of-base support functions, through management support
and a governance framework on behalf of Defence Groups and
Services to assist effective command, control and administration
of base-wide issues and base support functions.
– Contribution to stewardship of the Defence estate, through
estate upkeep, estate appraisal and estate program services
and projects, and facilitating the management of estate risk and
compliance.
– Delivering DSO’s share of products and services to Defence as
a shared services provider in support of Defence’s living,
working and training environment, either through external or
internal delivery.
DSO delivers outcomes to support Defence capability supported by:
• A single integrated service delivery organisation with a national footprint
• Value for money through working with industry and leveraging volume
• Connection to both customers and national control
• Geographic coverage where Defence works, trains and lives across Australia
• Large customer population base (100,000):
– 58,000 ADF
– 21,000 APS
– 21,000 Reserves
• Dispersed sites in metropolitan, regional and remote locations
Why
Current Contracted Services
• Relocations Administration Services and Removal Services (Toll) – five
years from 1 July 2010 plus extensions. ~ 22,000 relocations and
20,000 removals each year.
• Provision of Housing and related services (DHA)– 12 years plus 3 x
five year extensions. There is a major review every five years.
17,500 Service residences provided to meet the ADF operational
needs of a mobile workforce.
– Strong governance arrangements
– KPIs – business improvement, reduce Defence costs, sustain
and improve relationships and influence service provider
behaviours to ensure quality services are delivered to Defence
personnel.
– DHA housing model established by government to maximise
involvement of the construction industry (800 – 1000 new
houses per year)
Defence Contracted Services – Relocations and Housing
• HQ Joint Operations Command – joint operational command
facility at Bungendore.
• LEAP 1 – 1,395 Level 5 Live In Accommodation (LIA) units located
at Holsworthy Barracks, Enoggera Barracks and RAAF Amberley.
• LEAP 2 – 3,015 Level 5 LIA units delivered and under construction
at 14 Defence bases Australia-wide.
Considerable financial incentives under PPPs for good performance
– Defence pays the capital costs of the PPP facilities over a 30 year
period, rather than on completion of construction, and abatements are
also applicable if performance does not meet requirements.
At the end of the 30 year agreement, ownership of the PPP facilities reverts to
Defence.
Defence Contracted Services – Public Private Partnerships (PPP)
• Current contracted Garrison Support Services include:
– Management of the Services
– Cleaning
– Grounds maintenance
– Pest and vermin
– Training Area and Range Management
– Laundry and dry cleaning
– Sports and recreation
– Accommodation Management
– Hospitality & Catering
– Canteen/Cafeteria
– Access control
– Waste management
– Airfield support
– Fire Fighting and rescue
– Petrol, oils and lubricants
– Stores management
– Transport
– Workshop
• Current contracted Comprehensive Maintenance Services include:– Management of the Services
– Call Centre
– Fixed Plant & Equipment Maintenance
– Engineering Operations
– General Estate Works
– Special Training Facilities
21 contracts over original 12 DSO regions
Defence Support Operations Current Base Services
Other contracted services managed by DSO include:
– Utilities
– Fresh Rations
– Safe Hand Mail
– Base Security Infrastructure
– Library Services
Defence Contracted Services - other
A new DSO Operating Model
• DSO’s responsibilities will be carried out at the national, regional
and local (base) levels based on the following accountabilities:
– Activities carried out with national scope, and geographically
located in Canberra
– Activities carried out with national scope, and geographically
located in one of our five regions
• DS regions will play dual roles:
– regional and base support roles focused on their geographic
area of responsibility similar to those currently performed; and
– designated national roles supporting activities across Australia
Proposed changes to DSO roles and responsibilities:
• DSRG is under increased pressure to demonstrate value for
money, and to improve effectiveness in delivering products and
services
• Defence is also seeking to deliver efficiencies
• Investment in the DSO future Operating Model, new base services
contracts and new IT systems will allow DSO to improve the way it
does business
Rationale for a new operating model:
New Operating Model
• Current reforms also compel change:
– Changes to Defence priorities and shared services model affect how we operate and deliver outcomes
– Base Services Retendering (BSR) significantly changes future service delivery arrangements and the contracting model
• DSO’s response is to enhance our ways of working:
– From ‘customer’ to ‘partner’
– From ‘regional’ to ‘national’
– From ‘ambiguous’ to ‘accountable’
– From ‘reactive’ to ‘proactive’
Rationale for a new operating model (continued):
New Operating Model
• Identifies and articulates key business functions and processes of
DSO to deliver its outcomes to support Defence capability
• Documents key roles, responsibilities, functions, and processes
required to define DSO activities
• Delivers on DSO business outcomes through:
– Increased consistency and reduced duplication
– Improved planning processes
– Improved capacity to manage risk
– Increased internal product and service management capacity
– Key governance processes
– Changed contract management arrangements
What is the DSO Operating Model?
New Operating Model
Base Services Retender
Elements of the BSR
The BSR comprises a number of
streams.
SOW
Transition
Planning
Procurement
Strategy
Supporting
DataBSR
Information
Systems
Contracting
Model
Performance
Mgt Framework
Affordability
& Reform
Background
1
5
3
4
2
The overall value of these Base Service contracts is approximately $1.1 billion per annum, including estate maintenance projects (risk management works).
Current Base Services comprise 24 individual products and service lines (e.g. estate maintenance, catering, access control). Contracts were tendered based on the former Defence Support 12 regional model.
There are 21 current contracts comprising of:
-9 Garrison Support Services contracts;
-9 Comprehensive Maintenance contracts;
-3 x Base Services contracts (combined).
The dates of these contracts have been aligned to allow Defence to go to market at a single point of time.
In 2012, a formal re-tendering process to replace these contracts commenced that will replace the existing contracts in 2014.
CURRENT
CONTRACTS
Background
2009
Future Acquisition Strategy - Industry was engaged to conduct market research and analyse and assess current contracting arrangements against industry better practice.
Alternative ‘bundling’ options were proposed
Three ‘supply market’ strategies to optimise value for money:
Leveraging volume, increasing standardisation and improvingdemand management.
Reform – Implementation of working group to progress ‘agreed’ initiatives.
Funding - Budget allocations revised to reflect SRP harvest
The Journey 2010
Strategic Reform Program – Establishment of SRP and savings targets.
-GSS - $654m and CMS - $505m.
-Reform - Commencement in developing reform initiatives
Background
The Journey
Industry Consultation – as part of developing the future acquisition strategy for Base Services.
Defence + Industry Conference - Three ‘bundling’ options were presented at the Defence + Industry Conference 2011 for feedback.
Internal consultation also occurred.
Reform and Affordability - Continuation of work on reform initiatives.
2011
Background
The Journey
2012 Request for Information – A formal RFI was issued in February 2012, seeking industry feedback on proposed bundling and market approach.
Statement of Work – Using the agreed guiding principles. Supporting data was sourced from a number of systems, spreadsheets, contractors and regions.
Reform and Affordability - Continuation of reform initiatives in hospitality and catering, access control, sports and recreation.
Invitation to Register – Open approach to the market through AUSTENDER.
Request for Tender – Released through AUSTENDER. Limited to those companies that successfully pre-qualified as a result of the ITR.
Background
2013
The Journey
2014
Request for Tender – Closed on 28 February 2013.
Evaluations – Evaluation team established
Transition Preparation – Transition preparations underway including alignment with the implementation of DSO Operating Model and transition to the new corporate system GEMS.
Negotiations – Subject to successful negotiations contracts will be
signed.
Transition In – Progressive transition of the eight service packages.
Transition Out – Progressive transition out of the existing 21 contracts.
Current Challenges
1
7
3
5
2
Funding available for Base Services contracts has been reduced as a result of SRP targets ($1.1bn over 10 years).
Increased compliance and legislative requirements as well as increased scope of services.
Different arrangements, processes, procedures and experience depending on where you are.
Ability to access innovation or industry expertise.
4
6
CHALLENGES
Inconsistent product support and service delivery arrangements.
Inefficient models exist and Defence is paying to have capacity on hand.
The quality of the supporting data and estate information.
BSR Objectives
1
2
OBJECTIVES
Sustain Defence Capability
Optimise Value for Money
Defence has identified two major objectives in delivering the
provision of Base Services in unison not opposition.
Reframe Statement of Work
1
7
3
5
2
Sustainability
Total Asset Management
Leverage Volume
Competitive Advantage
Innovation
Standardisation
Outcome Based Contracts
4
6
PRINCIPLES
The primary objectives are supported by seven guiding principles
agreed by the Star NEP Committee in December 2011
Strategies
1
3
2
By implementing contract options that leverage volume, standardise requirements, reduce excess capacity and decrease demand management, there is opportunity to restructure and redesign service delivery.
This will optimise value for money whilst sustaining ADF capability and meeting increased legislative compliance activities.
Maximise the opportunity provided by BSR to optimise value for money for Defence by:
~ Allowing modernisation of the providers’ service delivery models,
~ Better leveraging volume (national tender) and standardisation (consistency of activities across Australia), and
~ Outcome focused statements of work.
~ Enhanced consistency through national product management
~ Improve accountability for both Defence and Contractors – a strong relationship of mutual respect and trust between those involved.
~ Improve Planning
~ Enhance the role of Contractors and leverage industry expertise
~ Separate estate planning/ programming from program execution
~ Manage the whole of estate
Mapping from Current to New
Bundling of
Services
Estate Maintenance & Operations Services
(EMOS) Bundle
Management, Integration & Co-ordination
(MIC) Including Estate Appraisal
Base Services Call Centre
Cleaning & Housekeeping
Commercial Operations (Central West only)
Estate Upkeep
Land Management
Laundry & Dry Cleaning
Reprographics
Pest & Vermin
Sports & Recreation
Training Area and Range Management
Transport and Airfield Support Operations
GSS
Mgt of Services
Accommodation Mgt
Airfield Support
Cleaning
Commercial Ops
Grounds Maint
Laundry & Dry
Pest & Vermin
Reprographics
Sport & Recreation
Range & Training
Transport
CMS
Mgt of Services
Property Services
Centre
Infrastructure Appraisal
Engineering Operations
Routine & Reactive Works
Fixed Plant & Equip
Special Forces
Training Facilities
Estate Maintenance & Operations Bundle
Mapping from Current to New
Bundling of
Services
GSS
Access Control
Hospitality and
Catering
Aircraft Refuelling
Fire fighting Services
Stores Mgt Services
POL
Waste
CMS
Regional Program
Dev & Mgt
Risk Managed
Works
National Program
Services
Retail Stores & POL
Aircraft Refuelling and
Rescue & Fire Fighting Bundle
Access Control
Hospitality and Catering
Waste
Project Delivery Services
Miscellaneous Service Packages