Everything Must Go – The MoD Finds More Stuff to Sell

Rolling off the back of the failed attempt to sell off (kind of, I know it was technically a Government Owned entity) DE&S the MoD has confirmed it is still looking to sell of more bits of itself.

Contract news

Title attributed to the contract by the contracting authority:

Sale of the Defence Support Group and Land Equipment Service Provision and Transformation Contract (hereinafter referred to as the Service Provision Contract – SPC)

Mainly for vehicles but also including other Land equipment;

Repair and maintenance services of military vehicles. Repair and maintenance services of firearms and ammunition. Repair and maintenance services of weapons and weapon systems. Fleet management, repair and maintenance services. Repair and maintenance services of military vehicles.

The MOD is seeking Expressions of Interest from companies or consortia interested in purchasing the Land Business of the Defence Support Group (DSG), structured as below.

DSG is a Trading Fund wholly owned by the UK Secretary of State for Defence. It carries out repair and overhaul of the Army’s armoured vehicles and light weapons, and also provides services directly to the front line across the majority of land platforms through in-barracks support.

DSG operates today from eight main sites across the UK, including the headquarters in Andover, with additional “in-theatre” presence in Camp Bastion, Afghanistan.

DSG has been operating as an ‘arms-length’ organisation from the core MOD for a number of years, including whilst under its previous forms of the Army Base Repair Organisation (ABRO) and the Defence Aviation Repair Agency (DARA).

The British Armed Forces (predominantly the Army) are the primary customer for DSG and the long-term vision for DSG is a transformed organisation with greater technical capabilities, introduced post sale, able to perform a more intelligent equipment management and support role than is currently the case.

Since DSG supports capabilities which remain very important to the MOD, a new SPC will be put in place such that a newly formed company (New DSG) can continue to deliver its range of services post sale to the MOD.

The proposed structure of the transaction is the transfer of a substantial part of the operations, functions and assets of DSG Trading Fund to New DSG, the sale of a majority voting shareholding or all of the shares in New DSG to a purchaser and the parallel award of the SPC to New DSG for provision of services back to MOD. If the MOD decides to retain a minority shareholding in New DSG, the purchaser and the MOD will enter into a shareholders’ agreement relating to New DSG.

Subject to maintaining any specific militarily essential assets, people and capabilities and as necessary at specific locations, the New DSG business could comprise: the SPC providing the services to the MOD as described below; other services to the MOD (potentially Strategic Support Supplier (SSS) / fleet management services) and (potentially) commercial services to other government or non government customers.

It is intended that under the SPC, New DSG will provide the following nominated requirements for Land platforms and equipment to the MOD:

  • Maintenance, Repair & Overhaul: levels 1 – 3: Inspections, repair and service activity (predominantly for A & B vehicles) including the provision of non-routine activities and mobile support for units of all three services and Other Government Departments.

  • Maintenance, Repair & Overhaul: Level 4: Depth repair and overhaul activities (both routine and non-routine) necessary to ensure capability, structural integrity and operational safety of vehicles

  • Receipt, Inspection, Issue & Storage (RIIS): Provision of resources to fulfil the requirement for RIIS activities for stored equipments, including in-storage maintenance, for vehicles, other equipment and inventory.

  • Training Uplift Fleet: The end-to-end management and support of the Army’s Training Uplift Fleet at specific UK locations

  • Inventory & Repair Management: Provision of inventory and repair management services for nominated requirements, including the procurement (either as agent of the MOD or as principal) of spares and other items for use either by New DSG in the performance of the SPC and other contracts for the MOD or for use by other MOD customers.

  • Power Pack Regeneration Facility Personnel: Provision of Sponsored Reserve personnel able to conduct in theatre power-pack regeneration as directed by the in-theatre support chain of command.

  • Light Weapons Strategic Support Supplier (LW SSS): Provision of an availability service for in-scope weapons.

  • Army HQ Fleet Management: Support to Army HQ Fleet Management activity and development of evidence based recommendations for the optimisation of the Army’s equipment fleets and delivery of cost efficiencies across the Army.

Is there anything else left to flog?

15 Comments
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Derek
Derek
January 6, 2014 3:39 pm

DSG sale was announced back in 2010, it had seemingly stalled for a bit but seems to be being resuscitated- perhaps as a fig-leaf after the GoCo failure.

DSG is largely considered (whether it is or not is a different matter) as bloated and inefficient and ripe for some private sector reform. And the cash from the sale would be nice too.

DavidNiven
DavidNiven
January 6, 2014 3:55 pm

‘Maintenance, Repair & Overhaul: levels 1 – 3: Inspections, repair and service activity (predominantly for A & B vehicles) including the provision of non-routine activities and mobile support for units of all three services and Other Government Departments.’

So more of the problems that have become apparent with the ‘C’ vehicle fleet, of operators having little experience in equipment husbandry and then learning as they go on ops.

The trouble with outsourcing basic maintenance and servicing is that of massive skill fade, would it not be more sensible to have a privately run central servicing garage within the garrisons so as to book in a vehicle for servicing and all the consumables are provided by them. All units pay for the service via the through life equipment budget that follows the vehicle.

oldreem
January 6, 2014 4:00 pm

Not sure whether the ‘bloated’ assertion applies more to the Land or Air component of DSG; historically more likely the latter. And while “efficiency” (output cf. input) may well be improved, the front line customer needs effectiveness. My experience of DSG (not much recent, formerly of ABRO) was that it was generally wilco and on-side, having been sharpened up considerably by market testing in mid-90s. A lot will depend on how smart the contract is from MoD’s side, otherwise the sort of detail rip-off nonsenses seen in many PFIs will recur. Is anyone optimistic?

@Derek -” the cash from the sale would be nice too” – for whom?

Jed
Jed
January 6, 2014 9:13 pm

Meanwhile the Yanks have literally thousands (tens of thousands?) of MRAPS going cheap, or to be scrapped, we could possibly put ever every Squaddie in the entire Regular and Reserve force in “protected mobility” for peanuts…..

Observer
Observer
January 7, 2014 7:16 am

Maybe it’s the Sunday school kid in me, but I can’t help comparing these things to the tax farming done by the old Romans and the corresponding abuses to the system that happened.

Desk Jockey
Desk Jockey
January 7, 2014 2:58 pm

@ Jed – There is a reason the MRAPS are going cheap which is that the Yanks have bashed the hell out of them, probably in ‘Ghan. Also they are to US specifications, the UK ones are different as heavily modified by a Formula 1 derived garage (better gearbox and suspension to take the armour) and would not meet important EU and UK vehicle regulations. In short, a heck of a lot of money would have to be spent converting them.

Don’t worry, there is still plenty to flog off by any underhand means possible so that the crooks at the top of the tree can get their bungs! It is all very well getting the private sector to do all the maintenance work, but at the end of the day some poor bugger will be stuck in a combat zone with a broken bit of kit that they or their colleagues cannot fix or jury rig something to tick them over. Getting the private sector support to come to the combat zone is not cheap either. A current buzzword is ‘partnership’, the maintainance company does all the routine and in-depth maintenance with lots of support from uniform guys and girls who they train who then deploy on ops with that knowledge. You don’t need to sell them the whole estate to do it either, that tends to make the shareholders more money than it makes the MOD.

CheshireCat
CheshireCat
January 7, 2014 6:38 pm

Yep, there’s a brief article in December’s edition of Desder that says exactly that.

Derek
Derek
January 7, 2014 7:17 pm

TD is right.

The Desider article is very clear that “bringing the vehicles in line with standards required for UK roads” is part of the “regeneration” programme (also costed at £300 million over 4 years) that prepares the vehicles for the core inventory.

The article is available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/263837/desider_67_DecVers2.pdf

Threading together the various details there and elsewhere it seems fairly certain that FRES-UV will not be reappearing before the 2020s and that probably squares away another SDSR15 angle. Looks like the MRAP fleet is the new/now FRES-UV.

Chris
Chris
January 7, 2014 7:51 pm

Derek – on the grounds the MRAPpy vehicles aren’t hot-shots when it comes to mobility, naming them ‘Utility Vehicles’ seems more than just misleading. That would be Utility providing the usefulness is on nice flat roads. Perhaps FRES-PointlessVehicles? Oh – can’t do that because all the FRES vehicles seem to be. Got it! FRES-SV as in ShopmobilityVehicles!

Mastiff, Ridgeback, Wolfhound and to a lesser degree Husky as they stand are essentially protected road vehicles. The Husky in UK service may possibly have the later independent airbag suspension in which case its better, but if its on the earlier live axles on steel springs its as mobile off-road as a London Bus. Which is still better than the Mastiff clan. I would hope those looking for FRES-UV would demand genuine high off-road mobility?

Desk Jockey
Desk Jockey
January 8, 2014 10:33 am

Yes TD and Derek are right, the MOD are spending £300m bring 2000 UOR procured vehicles into Core. A pretty hefty financial commitment. Hence my point to Jed that you cannot just go by the sticker price for some knackered out vehicles made in the US and claim that you can buy them for peanuts to equip the UK forces.

Armoured vehicles have a certain cost associated with using them above what you have for normal vehicles. In this day and age of trying to keep fuel bills down, equipping every operational and non operational unit with excessively heavy vehicles is going to rocket up the bills. There is nothing wrong with using cheap trucks and land rovers as long as they don’t go anywhere near hot combat zones.

Derek
Derek
January 8, 2014 11:55 am

Chris,

No argument from me, brining the Mastiff/Ridgeback into core may make financial sense but these are single role vehicles. They have poor mobility and are, design wise, ill-suited to “real” war-fighting. Jackal and Foxhound are great for light units but Mastiff and Ridgeback are a poor choice for protected mobility units. But hey, that’s the world we are in.

Chris
Chris
January 8, 2014 12:29 pm

Derek – its a debatable point whether it makes financial sense; it all really hinges on value for money. They may seem to be a cheap option for the filling of Army garages, but if they have no tactical purpose their value is low low low. Value for money then is not good. Maybe they’ll turn up in white with bands of yellow & blue squares round their midriff – riot control vehicles? Nightclub policing vehicles? Highway Agency traffic officer vehicles?

As I noted before I hope FRES-UV or whatever it is renamed is not sidelined on the grounds that the Mastiff type vehicles meet the need.

Chris
Chris
January 8, 2014 12:34 pm

Was going to edit to add ‘Clearly these vehicles do not meet the mobility needs as were apparent in the earlier FRES-UV requirement’ but my PC has lost the ‘click to edit’ option. Pah! Software!…

The Other Chris
May 8, 2014 11:00 pm

Spam Alert!