Bechtel and CH2M to help project manage UK’s armed forces

The UK Ministry of Defence (MoD) today announced that it had offered Bechtel and CH2M Hill managed service provider contracts to improve the effectiveness and efficiency of ministry’s procurement activities. 

The two US firms will be using their skills in project management and supply chain organisation to advise the MoD’s in-house procurement agency, Defence Equipment and Support (DE&S). Altogether, the UK is expected to spend $260bn on equipment over the next 10 years, from aircraft carriers to improved living accommodation for services personnel.  

The MoD said the contractors would be expected to work alongside DE&S staff to help them achieve their goal of becoming a "best in class" acquisition organisation, although they would not play any part in deciding which weapon system or platform to purchase. 

The ministry has offered Bechtel contracts to support the Royal Air Force and the Royal Navy, and CH2M Hill has the job of advising staff dealing with the British Army and the "joint enabler" area. Alongside these, a contract to advise on human resources has been offered to PricewaterhouseCooper (PwC).   

Each contract will have a duration of three-and-a-half years, with two optional one-year extensions. 

The MoD said: "The managed service provider contracts are being brought in to drive the DE&S transformation programme, by providing skilled personnel who have the expertise and past experience in implementing transformational change in organisations as large and complex as DE&S." 

Philip Dunne, the minister for defence equipment, technology and Support, said: "The contracts we have offered to CH2M Hill, Bechtel and PwC represent a key milestone in the work to transform DE&S into a higher performing project delivery organisation." 

In the past, the MoD had suffered large cost overruns on its projects. Margaret Hodge, the chair of the House of Commons Public Accounts Committee, said last year that between 2000 and 2011, the cost of its 69 largest projects had increased by £11bn, and independent analysis carried out in 2009 concluded that the outturn cost of a project was typically 40% higher than the initial estimate.  

Bechtel said its naval and air purchasing programs made up about three-quarters of the MoD’s equipment budget. They include the latest Lockheed Martin F-35 fighter aircraft, an aircraft-carrier programme, and fast-attack and ballistic-missile submarines.  

Craig Albert, president of Bechtel’s global government services business, commented: "Helping the MoD improve how it acquires materials, equipment, and services is critically important and a tremendous privilege. We look forward to working as part of the team to build on the progress of recent years." 

John Williams, the managing director of Bechtel’s UK government services company, said: "Bechtel will deploy a world-class team of professional project management and supply chain leaders to support the continued transformation of Defence Equipment Services." 

The offer of contracts triggered a mandatory commercial stand-still period, which will last for at least 10 calendar days after which signature will take place.