II.1.4)Short description of the contract or purchase(s):
Defence services. Storage and warehousing services. Warehousing services. Procurement consultancy services. Warehouse management system. Air transport services. Railway transport services. Water transport services. Parcel transport services. Relocation services. Transport services (excl. Waste transport). Road transport services. Medical equipments, pharmaceuticals and personal care products. Clothing, footwear, luggage articles and accessories. Food, beverages, tobacco and related products. Lubricants.
1. The MOD is seeking Expressions of Interest for a Delivery Partner (DP) to assist in the transformation of its delivery and operation of logistic commodities and services. This transformation will have to address inventory management and stock control, commodity procurement and Supply Chain Management capabilities (e.g. physical logistics, storage and distribution, Information Systems (IS) and Integration). This will ensure that MOD achieves good value, coherence in delivery, and enables the balanced use of Military resources, Reserve Forces and Industry partners. The approved services requirement sits within the Logistic Commodities & Services (LCS) Operating Centre (OC). In addition to looking at the option where a DP would manage and deliver the services required, the LCS(T) Project will also assess an in-house developed Value for Money Benchmark (where MOD would manage a solution that is delivered by a mixture of in-house and industry providers)The nature and complexity of the requirement means that the Authority is expecting the contract term for a DP solution to be 13 years in duration (assuming a 3 year transition phase).
2. The DP will be required to provide a variety of services that are currently provided 'in-house' or through commercial relationships with suppliers:
a. Management of Supply Chain Services — the management and integration (including inventory management) of the complete range of services covered under the requirement with the aim of reducing the total cost of these services to Defence whilst continuing to be fully integrated with the Defence Logistics Support Framework (DLSF);
b. Storage facilities — to support the supply chain requirement for all stock items under the direct responsibility of the LCS OC. This includes commodity items, together with other wider Defence material, as well as the related inspection and maintenance services. The requirement also includes the provision of specialist storage services such as hazardous, Controlled Humidity Environment (CHE) and secure storage for a range of items (which includes those requiring enhanced storage such as Crypto, Bowman, and Light Weapons etc);
c. Distribution and Freight Services — including the collection of material from suppliers and the distribution of material held in LCS to the 'Purple Gate' and/or delivery to Units or other nominated points of delivery (for Units on deployment). The service will include Defence wide requirements such as consignment tracking the Reverse Supply Chain for material returning to storage, and other 'point to point' movements currently managed by LCS Freight Contract Management (FCM), including a global freight service, the movement of explosives and a removal service for personal effects;
d. Procurement Services:
The LCS OC currently procures a range of commodities in the following areas:
i) medical supplies, medical equipment and general stores;
(iii) clothing; and
(iv) oils, lubricants and gas.
In the procurement services role the DP is likely to be required to source and supply these commodities acting as the counterparty for any new or replacement Commodity Supply Contracts which are let. Using the Public Procurement Regulations the DP may also be required to act as the Authority's procurement agent in the sourcing of new or replacement Commodity Supply Contracts which may include some or all of the commodity items detailed above. The DP will also be expected to maintain service continuity by managing and operating the Authoritys Legacy Commodity Supply Contracts for these commodities including acting as the Authority's Managing Agent.
In undertaking the Procurement Services the DP will be required to comply with relevant MOD policies and guidance (where applicable) and to demonstrate Value for Money (VfM) which may include the use of Government Procurement Service Framework if appropriate.
The number of legacy supply contracts within LCS(T) is currently around 350, which is supplemented by up to the same number of ‘ad-hoc’ contracts for one-off buys. To avoid a conflict of interest the current assumption is that the DP will not normally be permitted to bid for any future Commodity Supply Contracts.
3. To provide an indication of the scale of activities currently undertaken by the LCS OC:
Physical Logistics covering points b) and c) above are undertaken from 61 warehouses across 5 key sites, involving approximately 2 000 staff, storing approximately 8 bn GBP of stock and equipment. Commodity procurement services including procurement, inventory management and supplier management involves the direct procurement of 200 000 000 GBP — 300 000 000 GBP of commodity products each year across the 350 Commodity Supply Contracts and ad hoc contracts and this activity involves approximately 350 staff. It is expected that approximately 2 200 of the LCS OC staff will be the subject of a TUPE transfer.
4. LCS OC sits within Defence Equipment & Support (DE&S) and forms one element of the Defence Logistics Support Chain (DLSC) which is managed by Defence as an integrated end to end supply chain. Potential Providers should note that under the heading of Materiel Strategy, MOD is currently assessing options to move to a new operating model for DE&S. A number of options (including a move to a Government Owned Contractor Operated entity (GOCO) are being explored further, with submission of the preferred option expected in 2014. It is therefore possible that a residual DE&S organisation (or parts of it) could be subsumed into an entity which is operated by a commercial contractor which could result in the DP operating on behalf of the GOCO.
5. Defence Strategic Direction 2011 (DSD 11) established the requirement to adopt the Whole Force Concept (WFC) that optimises the most cost effective balance of Regular, Reserve, Contractor and Civilian personnel. Total Support Force (TSF) is one component of WFC. In the future it is likely that the DP may be required to provide the contracted capability in support to operations overseas.
6. As detailed in paragraph 1, a Value for Money Benchmark (VfMB) proposal will be developed as part of this procurement exercise. The VfMB will be capable of being a deliverable solution therefore, a robust governance process will be implemented to ensure fair, equal and confidential treatment of all proposed solutions.
II.1.5)Common procurement vocabulary (CPV)
75220000 Defence services, 63120000 Storage and warehousing services, 63122000 Warehousing services, 79418000 Procurement consultancy services, 42965100 Warehouse management system, 60400000 Air transport services, 60200000 Railway transport services, 60600000 Water transport services, 60161000 Parcel transport services, 98392000 Relocation services, 60000000 Transport services (excl. Waste transport), 60100000 Road transport services, 33000000 Medical equipments, pharmaceuticals and personal care products, 18000000 Clothing, footwear, luggage articles and accessories, 15000000 Food, beverages, tobacco and related products, 24951100 Lubricants