Hestia: saving hard cash through Soft FM

DIOSoft facilities management services are essential to the everyday functioning of the Armed Forces and the wider Ministry of Defence. Here, MOD DCB features writer Gemma Gaughan provides an overview of Project Hestia, the Soft FM initiative launched by the Defence Infrastructure Organisation to save on estate costs, drive efficiencies and provide a smoother contracting process.

Formed in April 2011, the Defence Infrastructure Organisation (DIO) is an operating arm of the Ministry of Defence responsible for all of the Department’s property and infrastructure requirements across its built and rural estate. As such it controls some 2400 square kilometres, about one per cent of the UK’s landmass.

The DIO ensures strategic management of the defence estate, optimising investment and supporting military capabilities. It also has responsibility for the majority of MOD infrastructure expenditure, management and delivery activities. The organisation is composed of several operating divisions covering Hard Facilities Management, Soft Facilities Management, Major Projects and Land Management Services.

In the past, Soft Facilities Management (Soft FM) cost the MOD around £250 million a year. Soft FM covers a variety of services including catering, cleaning, waste management, retail, leisure, and hotel and mess services. The DIO formerly provided Soft FM services throughout the defence estate via at least 80 contracts; a less than ideal way of procuring services.

In 2013, a document entitled Project Hestia was published to provide guidance on a new initiative being implemented by the DIO with the aim of harmonising the provision of Soft FM across the UK defence estate. Hestia’s main target was to reduce the number of contracts down to around seven regional contracts in a cost and efficiency saving measure. These regions were laid out as Scotland, North, Wales & West Midlands, East, South West, South, and South East. It is expected that the South region will be the first contract signed, with award provisionally set for 2017.

Hestia does not cover sites operated by Public Private Partnerships (PPP), Private Finance Initiatives (PFI) or the Defence Training Estate; housing sites which have Total FM contracts in place, such as MOD Abbey Wood and US Visiting Forces (USVF); or those sites with established Soft FM contracts in place that outlive Hestia.

In the current climate of tight government budgets and spending transparency, it is essential that Project Hestia can demonstrate that aggregated regional contracts are able to meet the modern estate needs of the Armed Forces. The tendering process has accordingly been refined to ensure that successful bidders have the right culture of continuous improvement and value for money ethos to be able to achieve this.

Besides reducing the number of current contract arrangements within Soft FM services, it is hoped that Hestia will also deliver contracts that are flexible enough to work with in relation to future defence needs and the greater focus being placed on customer needs; will introduce a simplified and effective procurement model that sits well with wider defence policy and initiatives; and will enable effective joint working with delivery partners and suppliers, rolling out projects in phases so that lessons can be learned as progress is made.

The contracts themselves are being designed by the Hestia team to be flexible in order to be able to respond to the emerging impact of wider change programmes on the future size and shape of the defence estate. The use of output specifications will allow DIO expenditure to be better controlled to ensure the new estate contracts are affordable and within budget.

Looking to the future, the project aspires to provide commercial opportunities through the procurement process for a vast array of potential prime contractors, sub-contractors and supply chain businesses across the UK and within the EU, regardless of size or specialisation.

Hestia hopes to open the supply chain up to SMEs, an ambition which should be assisted by the creation of regional Soft FM contracts, and the team will work with industry to seek options for the greater involvement of smaller and local businesses.

The staff for this ground-breaking initiative have been recruited from across DIO as well as the wider public sector and industry. The Project Hestia team thus hold a variety of professional qualifications and have the range of experience of both current DIO arrangements and contracting arrangements within other organisations required to deliver a successful outcome for all concerned.

For more information, visit: https://www.gov.uk/government/organisations/defence-infrastructure-organisation