Ministry of Defence on the brink of advertising four projects in which one firm has total control.
Radical new Ministry of Defence procurement methods are to be put into practice on four projects worth £63m due to be advertised over the next fortnight.

The MOD refused to give details of the first projects that will be built by "prime contracting", where one company is given responsibility for a project and its supply chain. But they are due to be advertised on the European Union's Official Journal web site any day.

Industry sources who are following the development of prime contracting said the first four projects would be:

  • a £30m submarine jetty at the Faslane naval base in west Scotland
  • a £15m nationwide airfield lighting project, much of which is in East Anglia
  • a £10m housing maintenance project in Colchester, Essex
  • an £8m accommodation project at a base in Wimbish, Norfolk.
At least three of the projects are due to be advertised any day, with all four likely to have been advertised before their official launch at a conference on 16 June.

Officials from the MOD, Treasury and the Department of Health are likely to speak at this event to explain the government's attempts to use prime contracting to increase efficiency. It will also be attended by hundreds of contracting executives who are in discussions about forming alliances.

Industry interest in the MOD's prime contracting deals is intense, with major contractors and project managers attempting to form alliances to work for the £1.8bn-a-year client. Amec this week announced an initiative to get closer to its supplier partners and Balfour Beatty is in talks over forming alliances. Balfour Beatty managing director Paul Lester said it was close to forming tie-ups with two project managers.

Laing, Tilbury Douglas and Taylor Woodrow are also keen to form alliances. Project managers Symonds and Citex are expected to be heavily involved in the initiative, as they are already MOD partners.

The Faslane jetty is set to attract interest from these contractors and Scottish giants Miller and Morrison. It is understood that this project was was chosen for prime contracting because it is a large but relatively simple project on which to test the procurement route. There have been criticisms that prime contracting can work only on smaller projects after trials on two small gymnasium projects by Amec and Laing.

Ted Pearson, commercial director of the MOD's Defence Estates Organisation, said prime contracting projects would be advertised gradually rather than in batches.

The Defence Estates Organisation will increase the number of prime contracting deals slowly. All projects deemed unsuitable for private finance initiative procurement will take the new route.

Pearson is drawing up a new contract form to be used in prime contracting, with four bidders expected to be invited to tender.

Details are emerging of one MOD project that is thought unsuitable for prime contracting. The Single Living Accommodation project, due to be launched next year, is likely to be a PFI project. Worth £500m-750m, the scheme involves converting MOD dormitories to single rooms.