Land 155 Phase 1 is seeking to procure Military Off The Shelf (MOTS) combat bridges to provide Land Forces with the ability to cross a range of wet and dry gaps in support of combat operations, including the capability to tackle complex physical terrain features such as rivers, ravines and other natural and man made gaps.
The capability will comprise combat bridging which remains in place for a limited time, and can then be re-deployed forward to maintain support to the manoeuvre force. The program has received First Pass Approval and been selected by the DMO to act as the pilot program for a new contracting approach, that of a managing contractor (MC) framework.
The MC side of the contract will see three of the four bridge types required (rapid in placement bridge, flexible bridging system and modular bridging system) acquired under this method. In conjunction with the RFT, Land 155 Phase 1 is also seeking to procure 10 footbridge sets to provide a dismounted infantry gap crossing capability. Each set will be capable of a clear span crossing not less than 20 metres, and a wet crossing of not less than 100 metres when combined with additional sets. This bridge type will likely be acquired in house by the DMO under a regular framework.
“In terms of the MC model and what it is, it’s a model that’s been around and used with success in mainly the construction industry, so that’s mainly where people are familiar with its use,” explained Liesl O’Meara, DMO’s general counsel and head of the contracting and legal division in the DMO’s Commercial Group. “We’re going to take the basics of the model and apply it in the context of our equipment procurements. To my knowledge, we haven’t used it in this context before.”
One of the main reasons that Land 155 was chosen to trial the new MC framework was because of its low level of complexity, although the program had already gained First Pass Approval. In this case, the capability being sought will be a low risk MOTS solution.
“We’re keen to explore more innovative contracting models that allow us to tap into industry’s expertise, their experience and their innovation and bring that into our project design, our project implementation and then our project delivery,” O’Meara said to ADM.
“We’ve got significant staffing pressures so if there’s a model which we can use so that we can take staff which are potentially on the more simple, straightforward projects and put them onto our more complex projects which don’t lend themselves as readily to a MC,” Sarah Myers, director-general land support systems within land systems division of DMO pragmatically said. “It’s going to be a really exciting initiative because it will allow us to explore some other options as far as how we go about managing our resources.”
Both spoke of the resource constrained environment that the DMO and the wider Defence community are working under and the need to find savings and efficiencies where possible. There is also a push to be more actively engaged with industry at the earlier stages of procurement to get the best outcome for all involved.
Risk management
In terms of who takes on what risk, the MC framework that many in the infrastructure world would be familiar with, particularly having worked with the Defence support and Reform Group (DSRG), is being tweaked for Land 155. The current proposal for Land 155 is to apply the model in two distinct stages.
“Stage 1, which is the engagement of what’s been termed an “industry partner” and that’s the request for quotation for services that’s currently being released out into industry,” Myers said. “And then Stage 2, which is the fully fledged managing contractor post-second pass. The reason we’ve taken a staged approach to this particular pilot is that the CEO was keen for us to get a MC pilot up and running. Land 155 was chosen because it met the criteria - a low cost, simple, straightforward project. However, there weren’t the approvals and the funds in place to immediately move to a fully-fledged MC post first pass.”
The Stage 1 concept paper was signed off in August this year, an RFQTS was released in October 2013, which was followed by an industry brief to pre-selected DMOSS panellists. These companies are
- APP Corporation
- QinetiQ
- Aurecon Australia
- Evans & Peck
- GHD
- Jacobs Australia
- KBR
- Nova Defence
- KPMG Australia
- Ross Consulting
- SKM
- Beca Consultants
- Parsons Brinckerhoof Australia
- Point Project Management
- Frazer-Nash Consultancy
The use of the DMOSS panel also means that companies are already pre-qualified for DMO work. Since October, both Evans & Peck and Parsons have withdrawn from the Land 155 process. There is also speculation that members of the list above are also looking at various teaming options. There will also be a refresh of the industry teams on the list at some stage of 2014.
“The MC for Land 155 will take on risk for their own performance, but we’re not proposing that the MC take on the full risk for the delivery of the project,” O’Meara said. “Defence will remain the other party to the OEM contracts and the MC’s role will be to manage those contracts on Defence’s behalf.
“But an important distinction is that we’re just not buying project management services. It is a MC, so the successful company will be responsible for delivering an outcome. We want the capability delivered. There will be skin in the game for the MC, DMO is not just buying project management services on a time and material basis. The model we’re proposing will involve a fixed fee and that fee will be adjusted according to the MC’s performance and the MC will be incentivised so that if they brought the project in under budget or ahead of time, if that was of benefit to Defence, then they could earn additional fee.”
Timeline
Essentially the MC framework that DMO is putting forward is a blend of the traditional MC framework plus performance based contracting elements. The MC will be chosen from the companies listed above and, as part of the above described two stage strategy, the successful company will be initially engaged as an industry partner to undertake a number of activities during the period up to the Second Pass Approval which is currently scheduled for mid-2015.
Following Second Pass approval, the industry partner will be engaged as the MC subject to performance during Stage 1 and the model being confirmed as delivering value for money. Until that time, Myers and her program office are keeping all companies in the loop until the MC is chosen.
“You don’t want to just bring on board a MC once contracts are signed,” O’Meara said. “Ideally under the traditional MC model you’d bring the company in early and they would then have an intimate role in the project design and planning but we haven’t been able to do that with Land 155.
“So what we’re planning to do with Land 155 is bring the company in during the period between first and second pass and at least give them exposure and an opportunity to input into activities pre-Second Pass. In this way, we’ll at least provide them with the an awareness and insights into the project so that they are going to be well positioned post Second Pass Approval to take on the role of MC if and when government does approve us to go forward and deliver the project using this model.”
The pilot program will also teach both parties about what the MC approach can do and what functions may need to be retained within the DMO. Myers is hoping that her side of the team will reduce and people can be redeployed within the organisation. She maintains that there will always be a place for technical people within DMO as they need to be an educated customer.
In terms of sustainment once the new bridges are in service, there is potential for the MC framework to be extended into that phase but it’s very much a wait and see approach at the moment.