DMO News: Repair and Maintenance Reforms keep Navy and industry ship-shape | ADM Aug 2010
Shireane McKinnie
The DMO is working with Navy and defence industry to improve repair and maintenance arrangements for our major surface ships through the introduction of long term contracts.
This important reform initiative will provide greater predictability, certainty and stability of work for industry and a better through-life support outcome for Navy.
Defence and industry recognise that grouping ship repair and maintenance events through the use of long-term, performance-based contracting methodologies offers considerable potential for cost savings.
It will reduce contracting requirements associated with tendering for each individual maintenance event.
It provides industry with increased certainty of work, thereby promoting corporate and workforce stability and security of tenure.
Improving industry’s capacity to plan will enable efficiencies to be delivered to the customer.
It also provides Navy with better notice of maintenance patterns and the locations in which maintenance will be conducted.
The first activities to be contracted under the new arrangements will include repair and maintenance activity planning and conduct as well as ongoing material condition monitoring.
The emphasis on ongoing condition monitoring makes sense – this approach can deliver optimally-timed preventative maintenance outcomes and reduce the requirement for expensive and disruptive emergent repair work.
It is also anticipated that sufficient incentives can be offered to the service providers to deliver measurable efficiencies.
In June, the minister for defence materiel and science, Greg Combet, announced the industry suppliers that will be invited to tender for long-term contracts for the repair and maintenance of Navy’s major fleet units.
DMO intends to issue Requests for Tender to the successful industry participants towards the end of 2010, and to be in contract during 2011.
The new repair and maintenance group contracts are proposed to be long-term and performance-based; providing target cost incentives.
This means that after the second year of performance, they would be reviewed annually for contract extension.
Grouping ship repair and maintenance is expected to provide industry and Navy with greater certainty and stability in supporting the major fleet units, while also setting up a structure through which we can deliver efficiency gains; help the Navy to achieve its operational outcomes and strengthen contracts with industry suppliers.
It is a good example of Strategic Reform Program measures that are well-planned and seek to ensure sustainable, long-term improvements for Defence.