DEFENCE
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Interserve delivers around-the-clock support to injured service personnel at the Help for Heroes funded Recovery Pathway Expansion Project at Devonport Naval Base

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A project to replicate the contemporary operating environment in the Middle East delivered, on time and within budget, a critical training feature to meet urgent operational requirements

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Delivering a range of restoration works to the Grade I listed Horse Guards building at the same time as the planned cleaning maximised the use of resources, ensuring added value within stringent cost restraints

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Interserve subsidiary Landmarc Support Services launched a ground-breaking innovation scheme, called Landmarc100, to provide fi nancial support and advice for business entrepreneurs in rural communities, at this year’s Hay Festival, in the presence of HRH The Prince of Wales

Interserve

Interserve’s vision is to redefine the future for people and places. It is one of the world’s foremost support services and construction companies, operating in the public and private sectors in the UK and internationally, offering advice, design, construction, equipment, facilities management and front-line services. Through its specialist defence and security business, this includes all the human-support services, asset maintenance and services management to the armed forces. Interserve is based in the UK and is listed in the FTSE 250 index. The group employs some 50,000 people worldwide, and in 2012 generated gross revenue of £2.4 billion.

The British Army will lose up to 20,000 soldiers by 2020. Together with recent confirmation by the Chancellor of cuts in the number of civilian support staff working in defence offices, this means that the Ministry of Defence (MoD) must seek new savings and efficiencies to play its part in reducing the budget deficit.

Outsourcing essential defence and security services has a key role to play in meeting this challenge. Michael Puckett, Business Development Director at Interserve, argues that, if outsourcing is to become more commonplace, the MoD should seek to benefit from it fully by looking beyond short-term financial gains to ways of generating long-term levels of efficiency.

He asserts that, with the correct, integrated provision in place, the MoD can reduce risk and benefit from established expertise, freeing up military resource for core specialisms.

Outsourcing essential services to a third party is not a new concept but is frequently cited as an important factor in realising the cost savings or productivity goals required. The Defence Infrastructure Organisation, for example, has been contracting out its estate and facilities management services effectively for many years. There are numerous other examples of the cost and efficiency savings being realised by both public- and private-sector organisations that are working with a third party to manage essential support services.

However, procuring on a single-service, short-term contract basis, where cost has always been an overriding factor, is not a viable option. Defence procurement goals cannot be met on a cheapest-cost model. Instead, services need to add value and innovation, be flexible to change, enable better access to technical expertise and improve management information.

One common challenge for the military is that projects often have an urgent operational requirement, with a timescale that is non-negotiable and with no available in-house resource to support this.

By developing effective partnerships with industry, the military is now finding new ways to meet these specific requirements and also to improve facilities and create long-term cost benefits.

For example, the new reception facilities in Cyprus for troops returning from operational duty were delivered in partnership between Interserve, the Cyprus Infrastructure Support Team and the Royal Engineers. As well as meeting strict operational criteria, including a tight ten-week timescale, which was achieved ahead of schedule, Interserve also helped reduce refit costs and manage workloads between teams effectively, to deliver the facility under-budget.

Training is a further area where there is often an urgent need, but where the set up of any facility may take valuable time and resources away from the critical day-to-day operations.

The creation of the Afghan Village in Norfolk by Landmarc Support Services, an Interserve joint venture that was established to manage the entire defence training estate, demonstrates how this problem is being overcome. Replicating the contemporary operating environment in the Middle East, the project was scoped and delivered on budget in just eight months by the prime contractor.

Best value needs to be achieved from any contractual relationship. In many instances, contracts are now procured to deliver a wider range of services, with the MoD recognising that this approach can deliver significant cost savings by reducing the number of suppliers.

Yet, achieving value should not be measured in cost-saving terms alone. Take the recent completion of a large project to clean the Grade I listed Horse Guards’ building. Significant cost was assigned to erect the scaffolding required, so, rather than just cleaning the building as originally specified, the Interserve joint venture PriDE carried out essential restoration works at the same time, helping to deliver added value within stringent cost restraints.

The MoD’s operations are anything but UK-centric, and the best partnerships exist where the provider can offer integrated support, not just in a variety of locations but also with a full range of services. Here, the real challenge lies in managing activities centrally, but retaining flexibility to guarantee critical service delivery with the lowest risk.

In 2011, Interserve was successful in gaining four international infrastructure support provider (ISP) contracts, worth £420 million, embracing Cyprus, the Falkland Islands, Ascension Island and Gibraltar.

Retendering and retaining these contracts, and adding Gibraltar to the portfolio, enabled the company to analyse its thinking in this area, adopting a methodology where it is easier to adapt to change – whether that change is driven by cost pressures, political or foreign-policy initiatives, or just the requirement to be more efficient.

Each location is remote and has a relatively small community, and its own unique culture. Interserve established a compliant management and delivery system that met fully the relevant authorities’ standards for quality, health and safety, the environment and security.

To achieve these standards consistently, a single UK-based strategic management function supporting local delivery teams was required. At each location, a dedicated service delivery manager is employed, who is empowered to take decisions and implement timely actions in response to an authority’s changing requirements. At the same time, a UK team works to eliminate duplication of contract delivery functions and focuses on supply chain management.

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