Availability Contracting - Will It Make Things Better?

[LooseArticle]

DE&S are pressing ahead with 'Availability Contracting'. As I understand it this means that you (the MOD) give the whole responsibility for providing a number of airframes, at a given capability standard, to your nominated Prime Contractor. They then manage your fleet, carry out the non-sqn maintenance, provide the spares etc that ensure your sqns have what they need to fly the approved Annual Flying Task that someone has calculated will be enough to deliver Force Elements @ Readiness and deliver Operational Capability.

I understand that Tornado has already progressed some way down this route and that other platforms are soon to follow.

What I don't understand is how this makes things better (or cost less). If an MOD managed solution had its problems then handing responsibility over to Industry doesn't mean improvement - or does it? From my experience most people that work in IPTs and in our non-sqn maintenance areas are committed and professional individuals (whether service or civilian), but one thing they are not motivated by is the making of profit. They work, manage and lead based on what is best for the Service not the shareholder.

It looks to me like the IPTs are being run down and the work they do is being handed over to profit focussed civilian organisations. Of course the big advantage is that there will be less crown servants who need pensions etc..............but what our frontline will get will be what the Prime Contractor can mange as opposed to what the IPT has managed. DANGER. Of course we will be able to rely on watertight contracting to ensure we get what we need. D'OH!

Please tell me my cynicism is miss-placed.................:sad:

[C130 Techie]

Availability Contracting - Will It Make Things Better?

Judging by what we've seen so far I doubt it.

Please tell me my cynicism is miss-placed.................

Unfortunately it's probably not.

[cornish-stormrider]

Dear somebody at MOD.

We, as the prime contractor, regret to inform you that we were unable to supply any assets to your latest little escapades in what is loosely termed "sausage side".

Unfortunately we had a meeting with our shareholders and decided we could not risk the damage to our assets and risk our profit margins. Please could you resubmit a bid for use of these assets with a full risk analysis and cost breakdown. We will then consider this and inform you of our decision.

Your most humble servant

some spineless contractor.



DOES ANYONE ELSE THINK HAVING INDUSTRY RUNNING THE MILITARY LIKE A BUSINESS IS A BAD IDEA.

[tucumseh]

Your cynicism is not misplaced. However, “contracting for availability” is nothing new and for as long as I can remember whole aircraft fleets and equipment ranges have been managed on that basis.

I’d rather approach the issue a different way and ask “What is the problem that’s forcing you to (presumably) deviate from the current practice?” I’ve found that ANY support problem should be approached thus;



Understand the following formula and how to apply it to your given problem.

NHP (1 – R1) (1 – R2) 100
S = --------------------------- x ---- + 16%
MTBR 1


(Edit.....Sorry, can't format it but you get the idea. Read the permanent EP instructions for more info)

This is the formula that underpins all support work. It is the fundamental basis of all Requirement / ILS Manager jobs and should be pinned to their work terminal and any other appendage they may have. These posts have the unique authority to use their “engineering judgement” to over-rule / change any parameter within the formula for any given problem. If you hold such a post, and are not an engineer, I’m afraid the equipment in your charge is probably already in trouble. If you’re a civvy, you should have learned this and applied it daily as a Grade E, definitely Grade D, when you were a Requirement/ILS/Engineering/Fleet Manager. (Grade D is the grade immediately below the basic entry grade for project management in DE&S. It follows that if you are a direct entrant you have not been taught the basics of the project phase which accounts for upwards of 80% of through life costs; and this will forever more be a high risk area of any project you are responsible for). If you hold a post in which you conduct Requirement Scrutiny and don’t understand the formula, seek a transfer or get someone who does understand to teach you – you don’t possess a simple core competence required of you by PUS in his mandated RS instructions.

Failure to understand and apply this formula is at the root of all support problems. If you manage an equipment project which has never used this, give it a go. Typical savings, while maintaining availability, will be 20% or more. Believe me, when this is explained to you, you had better jump to one side, as a ***** great penny drops. And no, I’m not available to take classes.


Understand R,S,D&P. (Ranging, Scaling, Documentation and Packaging). Forget Def Stan 00-60 (Integrated Logistic Support) – when it gets down to it, users want the correct spares, in the correct place, packaged correctly so they don’t arrive in pieces, with maintained documentation. Not only is this common sense, it is (again) a mandated requirement under, for example, airworthiness regulations. See Nimrod and Mull threads!


It will come as no surprise to you that the above mandated requirements are widely ignored in MoD, so much so that if you find more than five people in DE&S who can explain the above, I’ll eat my hat.

[Pontius Navigator]

Well if you don't like the paint job write to Serco.

[GPMG]

I wonder how long it will be till the MOD are selling sponsorship space on your uniforms?

[Riskman]

Well we can pay Ben Sherman royalties to display the RAF roundel, or are the ac sponsored by BS?:*

[Wensleydale]

I can think of a unit in Lincolnshire where "Red Bull" would be a most suitable sponsorship!

[Double Hush]

One advantage of availability contracting is that the contract normally runs for many years to provide stability and an economic incentive. When the Treasury/Chancellor/PM decide not to cough up for a proper defence budget and savings have to be made for the resultant black hole, these contracts cannot be revoked without a (normally quite large) penalty clause. Protection is thus afforded as this limits the areas where savings can be made as the MOD won't pay for a service it doesn't receive,........will it?

[tucumseh]

"MOD won't pay for a service it doesn't receive,........will it?"


Not only does MoD do precisely this, but when staff complained about it the Chief of Defence Procurement formally ruled it was ok. When staff pointed out that, regardless of the ruling, the service was still required (in the case I'm thinking about, making an aircraft airworthy) he was content to have the company paid a second time. And when they didn't deliver, a third party was paid (a third time) to deliver.

Normally I wouldn't discuss this, but successive Ministers for the Armed Forces have subsequently upheld CDP's decision, in writing to my MP. (Although, as ever, I'm sure they hadn't a clue what they were actually signing).

[Pontius Navigator]

One advantage of availability contracting is that the contract normally runs for many years to provide stability and an economic incentive. When the Treasury/Chancellor/PM decide not to cough up for a proper defence budget and savings have to be made for the resultant black hole, these contracts cannot be revoked without a (normally quite large) penalty clause. Protection is thus afforded as this limits the areas where savings can be made as the MOD won't pay for a service it doesn't receive,........will it?

There are usually get out of jail clauses if the contractor is not performing but there would be an unholy hiatus if the contract was terminated as the new contract would take time to set up.

Then there is the reverse case where the contractor got the bid wrong and the 'company' failed to spot that it was a duff deal. I have been on the receiving end of one contract where two successive contractors jacked it in. In the second case, to fight the fire, the contractor sacked the manager. I think that just fixed it.

Then there is the case where all potential contractors pull out and set up a single supplier consortium to bid - competition? Joke.

contract normally runs for many years to provide stability and an economic incentive which puts an end to annularity and enables the contractor to plan ahead. B:mad:s, end of year one and the MOD put a stop to many of the contracted items that were within the contract but were cash extra.

The contractor had no doubt planned on say a 10% profit from a unit of 100. Then arbitrarily the MOD chops the extras. Now 10% or 80 means the expected profits are down 2%.

No wonder a contractor tries to stick the MOD as he knows full well the MOD, or Treasury, will stick him even to paying fees late.