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Complex contract signed

The Navy has extended its Port Services and Support Craft contract by two years. CDRE Geoff Geraghty represented the Navy and Mr Peter Wickham Defence Maritime Services.

Photo: ABPH Helen Frank

Complex Improved value for money and reducing financial pressures on the RAN’s operating budget have necessitated a review of Navy’s largest and most complex commercial contract, the Port Services and Support Craft (PSSC) contract.

The review culminated in a small ceremony conducted at Garden Island in Sydney last month with CDRE Geoff Geraghty, the Navy Systems Commander, and Mr Peter Wickham, Managing Director of Defence Maritime Services (DMS) Pty Ltd, formally signing a contract amendment which extended the PSSC contract by two years and revised service delivery provisions to better suit Navy’s requirements.

The contract between the RAN and DMS commenced on July 1, 1998 after lengthy CSP testing.

That process ultimately concluded that services previously provided by a mix of Navy and Defence Civilian personnel as well as through a variety of maintenance contracts, could be delivered more cost effectively through an overarching commercial contract.

The project eventually resulted in the harvesting of savings in excess of $100m and a 10-year contract for the provision, operation and maintenance of support craft in support of a diverse range of operational and training activities in Australia and overseas.

To improve value for money and in view of the aforementioned financial pressures, a comprehensive review of the services provided under the PSSC contract was undertaken to determine if there was scope to reduce the contracted level of support without adversely impacting on customer support.

As a result of that review, the following changes were agreed:

Reducing the number of Mk46 and EHCTV firings, thereby reducing the requirement for practice weapon recovery support,
Removing a number of mooring buoys which had not been used for some years,
Limiting sail training to supporting core activities at the two initial entry training establishments of HMAS Cerberus and HMAS Creswell,
Limiting the requirement to provide support craft for Reserve personnel training to Reserve diving activities only, thereby reducing the requirement for Reserve personnel training support by about 50 per cent, and
Removing the requirement to fuel RAN Ships in Jervis Bay.

The most significant change however, has been the extension of the PSSC contract by two years to June 30, 2010.

This decision was made on the basis that a significant annual price reduction could be achieved through reduced asset lease costs, annual depreciation and contractor financing costs that are passed onto the RAN.

Although the extension provision was allowed for in the contract, the option could clearly only be exercised on the basis that the RAN has been satisfied with the level of service provided by DMS.

In this regard, it was noted that DMS has provided a responsive service to Navy during the initial six years of the contract that fully satisfied the contract’s requirements.

At times they have provided a wide range of enhanced and value added services at no or minimal cost to Navy and have also provided some non contracted services at a significantly discounted cost to Navy and other elements of the Defence.

What it provides
Tug services Target services Weapons recovery and range support Consort duties Navigation training Diving training Nuclear powered warship support (in WA) Oil spill support Integrated logistics support Ammunitioning and explosive stores movement at sea Submarine support Commissioned ships boats Fuelling support Thursday Island operational support	Diving support General harbour services Other Services support (Commandos, SAS & Parachute Training School) Seamanship/boatwork training Reserves diving training Sea familiarisation training Hydrographic training DSTO support Hydrographic support Moorings support VIP craft support Sail training Historic craft support Harbour defence Naval Police support