Defence Magazine

The latest on facilities

By Jill Thexton

The historic Victoria Barracks in Paddington, Sydney.

Defence's vast estate is unique and diverse. It includes land, ports, airfields, storage and workshop facilities, office buildings, residential accommodation, recreational facilities—and the list goes on. The facilities need to be maintained to keep them in good repair and fit to support the Australian Defence Force.

Defence has committed over $455 million to maintain its estate in 2005–06. This figure includes the additional $100 million a year that the Government has committed to provide over three years, starting in 2005–06.

The Corporate Services and Infrastructure Group (CSIG) spent its entire facilities maintenance budget last year, and are on track to fully achieve this target again this year. This is a significant achievement, particularly given that a shortage of skilled workers, most notably in northern Australia, makes the delivery of maintenance difficult for Defence contractors.

Facilities maintenance defined

So what exactly is facilities maintenance? The estate upkeep or Facilities Operations (FACOPS) Program, managed by CSIG, can include simple maintenance tasks such as fixing a leaking tap, ripped carpet or a broken office light to asbestos remediation and airfield maintenance.

The FACOPS is managed by each CSIG region, through their Comprehensive Maintenance Service contractor (refer other story).

Core elements

There are three main parts to facilities maintenance:

Cyclical maintenance is the regular servicing and maintenance of equipment such as lifts and air-conditioning.
Reactive maintenance includes work such as repairing damage to buildings caused by storms.
Planned maintenance covers longer term plans for works, including repainting buildings and upgrading tarmac.

As custodian of the Defence estate, CSIG is responsible for managing all aspects of maintenance, which is much like managing budgets in our personal lives—there never seems to be enough resources to do everything we'd like!

Priorities

So how does CSIG, on behalf of Defence, decide what planned maintenance will be undertaken with limited funding, and balance this against priorities for reactive and cyclical maintenance?

People working throughout Defence nominate around 3000 proposals for planned maintenance works every year. However, funding typically allows CSIG to deliver on only around 800 of them.

The basic philosophy in determining priorities is to use a risk management approach. To be able to objectively and consistently determine risk, there are seven key aspects to consider:

(1) How will this uncompleted job affect Defence capability?

(2) What are occupational, health and safety risks if this job is not carried out?

(3) What are the legislative and statutory requirements for Defence?

(4) How will this job impact on financial efficiency? For example, if a facility deteriorates further, will this cost more to fix in the long run?

(5) Are there any environmental sustainability issues? For example, if we do not carry out this job, will it lead to environmental damage?

(6) In addition to point 2 above, are there any personnel issues to consider? If a job is not completed, could this impact on morale?

(7) How will this uncompleted job affect Defence's reputation?

CSIG applies this risk management framework to the thousands of requests it receives from customers each year, but how does this translate into a planned maintenance program within budget?

Customer engagement

There are a number of steps that CSIG works through together with its customers to prioritise and develop the planned maintenance program each year.

First, CSIG staff work with customers at each site to decide on the most important maintenance requests.

The bids for each region are then collated. CSIG again works with its customers to determine the level of risk and develops a prioritised list of works for that region. Considering the bids in consultation with others in the region may lead to a change in the risk assessment, and hence priority, of particular works. For example, recarpeting an office may be considered a high priority for a base, but at the regional level it may be competing with a proposal that, if not completed, could directly and significantly affect Defence capability.

This process is repeated at the national level, by consolidating all regional proposals and considering them together. CSIG considers proposals in consultation with representatives from each group. Again, proposals considered as high priorities at a regional level may not be assessed as a high priority when considered in the context of others put forward from all Defence sites in Australia.

It is vital that CSIG, working together with its customers, makes objective judgments as to what is most important to go forward.

Once the bids are prioritised at the national level, the Defence Infrastructure Sub-Committee (DISC) considers and finalises the planned maintenance program, and funding is allocated accordingly. The DISC is chaired by Mr Geoff Beck, Head Infrastructure Division in CSIG, and includes representatives from the three Services, nine other groups across Defence, and the Department of Finance and Administration.

By going through this extensive consultation process at the base, regional and national level, CSIG develops an annual planned maintenance program that best addresses the needs of Defence customers and supports Defence capability.

Keeping perspective

Facilities maintenance is a constant balancing act, and can be emotive for many involved—especially when we all consider our proposal to be a high priority.

We need to remember, however, that there is another balancing act—between reactive and planned maintenance. The demand for reactive maintenance is very high and the entire budget could be exhausted trying to satisfy it. If there is an adequate planned maintenance program, it will, over time, reduce the need for reactive maintenance.

We can relate the challenges of Defence's FACOPS to decisions in our own households. Take, for instance, the need to install antivirus updates on your home computer. Although it can mean having to take time to install the antivirus software and might cost a few extra dollars, if you don't do it, you might just lose the lot! It's all a matter of priorities.

Jill Thexton and Rebecca Holliday are graduates from the 2006 Defence Graduate Development Program, working in CSIG's central office for the first rotation.

... and re-tendering for service contracts

By Rebecca Holliday

Ensuring the smooth operation of Defence sites across Australia is by no means a simple task. As we go about our daily routine it is easy to overlook the small details that can make all the difference.

The services that support and enable the Australian Defence Force to concentrate on their core tasks are divided into two categories: Garrison Support Services (GSS) and Comprehensive Maintenance Services (CMS). GSS includes cleaning, catering, waste management, transport, pest control, laundry, grounds maintenance and waste management—services that support the day-to-day running of Defence sites.

CMS provides maintenance and repairs to Defence buildings and any fixed plant or equipment attached to them, such as repair of broken windows, leaking taps and maintenance of airconditioning. The role of the CMS contractor is to manage these services for Defence.

GSS and CMS contracts cost around $800 million each year, or about 28 per cent of the Corporate Services and Infrastructure Group (CSIG) budget. Each of CSIG's geographic regions (except Tasmania) provides these services by contracting with suppliers. CSIG regions manage their contracts with the contracted services company, while direction and guidance is provided by technical authorities in CSIG's National Operations Division central office.

Contracts are established for five years, with single-year extension options available for a further four years. Extensions are conditional on performance by the contractor through the contract period, with strategic reviews conducted at the end of every second year of the contract period. This mechanism ensures that contractors have an incentive to meet performance standards throughout the life of the contract.

The re-tendering of contracts also allows Defence to ensure quality and value for money. For many of the regions re-tendering of the current contracts for GSS and CMS has commenced, or will soon commence. Recently Sydney Central, South Queensland, Riverina and Murray Valley, Sydney West/South and South Australia have each completed the re-tendering process. Other regions are at varying stages in the re-tendering process or are soon to commence the process.

The procurement acquisition strategy for re-tendering was approved in 2003 as a two-phase tendering process.

Phase 1 involved developing two panels of preferred tenderers, who were assessed as competent to deliver the core outcomes for GSS and CMS. In Phase 2 separate regional Requests for Tender (RFTs) are issued to those companies selected in Phase 1 to invite tenders based on the services required by Defence in each region.

Tenders in each region are evaluated to provide the best value for money for Defence, not necessarily the cheapest price. Defence also considers other factors such as the level of involvement of small to medium enterprises and other broader issues, such as encouraging better environmental and health and safety outcomes.

Once the RFTs have been evaluated, negotiations are conducted with the selected preferred provider and, if negotiations can be successfully completed, the contract is signed and the successful contractor is announced.

The new service provider will begin service delivery to Defence when the old contract expires.

The re-tendering process is important for Defence because it allows contract performance to be improved and the scope of contracted works to be refined. CSIG will continue to work with its Defence customers during re-tendering processes to ensure that services continue to meet customer requirements and service standards. Contact with customers has included CSIG and the Army agreeing on a set of national standards to ensure that Army's requirements are consistently identified in each regional contract.

CSIG will continue to manage the re-tendering of GSS and CMS contracts around the regions to ensure that Defence personnel (military, Defence civilian and contractors) receive high-quality services and support in the future.