Logistic Services Tender for Ministry of Defence

Logistic Services Tender for Ministry of Defence

Logistic Commodities and Services (Transformation) Project. The MOD is seeking Expressions of Interest for a Delivery Partner (DP) to assist in the transformation of its delivery and operation of logistic commodities and services.

UK-Bristol: Defence services

2013/S 025-038755

Contract notice


Directive 2009/81/EC

Section I: Contracting authority/entity

I.1)Name, addresses and contact point(s)

LCS(T) Commercial Team, DE&S
Cedar 2a #3239,, NH3 MOD Abbey Wood
Contact point(s): LCS(T) Commercial Team – email deslcschgmgt-procurement@mod.uk
BS34 8JH Bristol
Telephone: +44 3067981037 / 3067983549
E-mail: deslcschgmgt-procurement@mod.uk
Fax: +44 1179138949

Further information can be obtained from: The above mentioned contact point(s)

Specifications and additional documents (including documents for competitive dialogue and a dynamic purchasing system) can be obtained from: The above mentioned contact point(s)

Tenders or requests to participate must be sent to: The above mentioned contact point(s)

I.2)Type of the contracting authority

Ministry or any other national or federal authority, including their regional or local sub-divisions
I.3)Main activity

I.4)Contract award on behalf of other contracting authorities/entities

The contracting authority is purchasing on behalf of other contracting authorities: no

Section II: Object of the contract

II.1.1)Title attributed to the contract by the contracting authority:

Logistic Commodities and Services (Transformation) Project.
II.1.2)Type of contract and location of works, place of delivery or of performance

Service category No 3: Defence services, military defence services and civil defence services
II.1.3)Information on framework agreement
II.1.4)Information on framework agreement
II.1.5)Short description of the contract or purchase(s):

Defence services. Storage and warehousing services. Warehousing services. Procurement consultancy services. Warehouse management system. Air transport services. Railway transport services. Water transport services. Parcel transport services. Relocation services. Transport services (excl. Waste transport). Road transport services. Medical equipments, pharmaceuticals and personal care products. Clothing, footwear, luggage articles and accessories. Food, beverages, tobacco and related products. Lubricants. 1. The MOD is seeking Expressions of Interest for a Delivery Partner (DP) to assist in the transformation of its delivery and operation of logistic commodities and services. This transformation will have to address inventory management and stock control, commodity procurement and Supply Chain Management capabilities (e.g. physical logistics, storage and distribution, Information Systems (IS) and Integration). This will ensure that MOD achieves good value, coherence in delivery, and enables the balanced use of Military resources, Reserve Forces and Industry partners. The approved services requirement sits within the Logistic Commodities & Services (LCS) Operating Centre (OC). In addition to looking at the option where a DP would manage and deliver the services required, the LCS(T) Project will also assess an in-house developed Value for Money Benchmark (where MOD would manage a solution that is delivered by a mixture of in-house and industry providers)The nature and complexity of the requirement means that the Authority is expecting the contract term for a DP solution to be thirteen (13) years in duration (assuming a three (3) year transition phase).
2. The DP will be required to provide a variety of services that are currently provided ‘in-house’ or through commercial relationships with suppliers:
a. Management of Supply Chain Services – the management and integration (including inventory management) of the complete range of services covered under the requirement with the aim of reducing the total cost of these services to Defence whilst continuing to be fully integrated with the Defence Logistics Support Framework (DLSF);
b. Storage facilities – to support the supply chain requirement for all stock items under the direct responsibility of the LCS OC. This includes commodity items, together with other wider Defence material, as well as the related inspection and maintenance services. The requirement also includes the provision of specialist storage services such as hazardous, Controlled Humidity Environment (CHE) and secure storage for a range of items (which includes those requiring enhanced storage such as Crypto, Bowman, and Light Weapons etc);
c. Distribution and Freight Services – including the collection of material from suppliers and the distribution of material held in LCS to the ‘Purple Gate’ and/or delivery to Units or other nominated points of delivery (for Units on deployment). The service will include Defence wide requirements such as consignment tracking the Reverse Supply Chain for material returning to storage, and other ‘point to point’ movements currently managed by LCS Freight Contract Management (FCM), including a global freight service, the movement of explosives and a removal service for personal effects;
d. Procurement Services
The LCS OC currently procures a range of commodities in the following areas
i) medical supplies, medical equipment and general stores;
(ii) food;
(iii) clothing; and
(iv) oils, lubricants and gas.
In the procurement services role the DP is likely to be required to source and supply these commodities acting as the counterparty for any new or replacement Commodity Supply Contracts which are let. Using the Public Procurement Regulations the DP may also be required to act as the Authority’s procurement agent in the sourcing of new or replacement Commodity Supply Contracts which may include some or all of the commodity items detailed above. The DP will also be expected to maintain service continuity by managing and operating the Authoritys Legacy Commodity Supply Contracts for these commodities including acting as the Authority’s Managing Agent.
In undertaking the Procurement Services the DP will be required to comply with relevant MOD policies and guidance (where applicable) and to demonstrate Value for Money (VfM) which may include the use of Government Procurement Service Framework if appropriate.
The number of legacy supply contracts within LCS(T) is currently around 350, which is supplemented by up to the same number of “ad-hoc” contracts for one-off buys. To avoid a conflict of interest the current assumption is that the DP will not normally be permitted to bid for any future Commodity Supply Contracts
3. To provide an indication of the scale of activities currently undertaken by the LCS OC:
Physical Logistics covering points b) and c) above are undertaken from 61 warehouses across 5 key sites, involving approximately 2000 staff, storing approximately £8bn of stock and equipment. Commodity procurement services including procurement, inventory management and supplier management involves the direct procurement of £200-£300m of commodity products each year across the 350 Commodity Supply Contracts and ad hoc contracts and this activity involves approximately 350 staff. It is expected that approximately 2200 of the LCS OC staff will be the subject of a TUPE transfer.
4. LCS OC sits within Defence Equipment & Support (DE&S) and forms one element of the Defence Logistics Support Chain (DLSC) which is managed by Defence as an integrated end to end supply chain. Potential Providers should note that under the heading of Materiel Strategy, MOD is currently assessing options to move to a new operating model for DE&S. A number of options (including a move to a Government Owned Contractor Operated entity (GOCO) are being explored further, with submission of the preferred option expected in 2014. It is therefore possible that a residual DE&S organisation (or parts of it) could be subsumed into an entity which is operated by a commercial contractor which could result in the DP operating on behalf of the GOCO .
5. Defence Strategic Direction 2011 (DSD 11) established the requirement to adopt the Whole Force Concept (WFC) that optimises the most cost effective balance of Regular, Reserve, Contractor and Civilian personnel. Total Support Force (TSF) is one component of WFC. In the future it is likely that the DP may be required to provide the contracted capability in support to operations overseas.
6. As detailed in paragraph1, a Value for Money Benchmark (VfMB) proposal will be developed as part of this procurement exercise. The VfMB will be capable of being a deliverable solution therefore, a robust governance process will be implemented to ensure fair, equal and confidential treatment of all proposed solutions.
II.1.6)Common procurement vocabulary (CPV)

75220000, 63120000, 63122000, 79418000, 42965100, 60400000, 60200000, 60600000, 60161000, 98392000, 60000000, 60100000, 33000000, 18000000, 15000000, 24951100

II.1.7)Information about subcontracting

The tenderer has to indicate in the tender any share of the contract it may intend to subcontract to third parties and any proposed subcontractor, as well as the subject-matter of the subcontracts for which they are proposed
The tenderer has to indicate any change occurring at the level of subcontractors during the execution of the contract

This contract is divided into lots: no
II.1.9)Information about variants

Variants will be accepted: no
II.2)Quantity or scope of the contract
II.2.1)Total quantity or scope:

Subject to further approvals the estimated value over the 13 year period is £6.2BN – £13.2BN.
Estimated value excluding VAT: 999 999 GBP
II.2.2)Information about options

Options: yes
Description of these options: The procurement services role is currently limited to those items procured by the LCS OC and is estimated at 45K NATO Stock Numbers (NSNs), whereas the physical logistics activity covers all the NSN’s handled by DE&S (up to 750K live stock numbers at present). The 750K stock numbers include items that represent strategic stores (and are not therefore currently moving), major spares for capital equipment, and approximately 55K NSN’s of Raw Materials and Consumables (RMC) which are procured by other OCs within DE&S. Work is currently underway to analyse the synergies between the nature of the items currently procured by the LCS OC and the DE&S OC wide 55K RMC items in terms of value, characteristics and transactions. Where it can be demonstrated that the nature of the NSNs would lead to synergies, and subject to approval, at some point in the future the MOD may wish to increase the scale of the procurement services role by combining this activity utilising the LCS(T) contracting vehicle. The timing of the analysis means that this option could be exercised, in whole or in part, at a number of points during the procurement (including a phased upscale post contract award). Were this option to be exercised across the whole RMC activity it is anticipated that it could increase the whole life value of the contract to approximately £13BN, an increase of up to £7BN.
Provisional timetable for recourse to these options:
in months: 156 (from the award of the contract)
II.2.3)Information about renewals
II.3)Duration of the contract or time limit for completion

Duration in months: 156 (from the award of the contract)

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract
III.1.1)Deposits and guarantees required:

Bank and/or Parent Company Guarantees and/or other guarantees of performance and financial liabliity will be required.
III.1.2)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:

Conditions relating to financing and payment will be specified in the contractual documentation.
III.1.3)Legal form to be taken by the group of economic operators to whom the contract is to be awarded:

If a contract is awarded to a grouping of economic operators the Contracting Authority will require the grouping to form a legal entity (with appropriate financial guarantee from its parent companies before entering into the contract).
III.1.4)Other particular conditions to which the performance of the contract is subject, in particular with regard to security of supply and security of information:

The integration aspects of the DP role will involve providing analysis and input for operational planning, together with developing an intimate knowledge of inventory holdings, including quantity, location and condition. Some of this information is subject to the “national eyes only” restrictions. Access to this information will therefore be limited to members of the DP’s staff involved in the execution of the contract who have a personal Security Clearance and are nationals of the United Kingdom (UK).
Such restrictions will be applied on the basis of Article 346(1)(a) of the TFEU which permits the United Kingdom to withhold information where disclosure is considered to be contrary to the essential interests of its security. Any resulting LCS(T) contract will therefore include specific provisions which restrict access to sensitive material. These restrictions will not exceed what is strictly necessary and appropriate to protect the essential interests and will not preclude non-UK registered Potential Providers from being invited to negotiate or being awarded the contract for the overall requirement. However, the future DP must only involve UK nationals with appropriate clearances in the execution of particular aspects of the contract which will be advised during the Pre Qualification stage of the procurement.
In accordance with Regulations 25(2)(m) and 25(5) of the UK’s Defence and Security Public Contract Regulations 2011 (Article 42(1)(j) of Directive 2009/81/EC), Potential DPs must also demonstrate as part of the Pre Qualification process the ability to process, store and transmit classified information at “Secret UK Eyes Only” (SUKEO) level for the integration aspects of the DP role by describing the required Facility Security Clearance (FSC) granted by its National or Designated Security Authority under the relevant national rules. For UK suppliers, FSC means “List X” status. Potential DPs must also provide similar evidence of their sub-contractors’ ability to handle classified information at this level of protection, where they are relying on sub-contractors to provide significant capability or capacity. Potential DPs that do not possess the required FSC, should be aware that it can take between 10-12 weeks for Provisional List X status. The MOD will verify the information you give in reply to these questions with your own National or Designated Security Authority. Personal Security Clearance could take around 8 weeks to be granted but can take longer in some cases. Potential DPs should also be aware that the requirement for storage and distribution includes classified material (up to SUKEO) and that some material may be subject to the US Government’s International Traffic in Arms Regulations (ITAR).
Potential Providers who do not yet hold the required security clearance and are successful at the PQQ stage will be required to start the process to obtain such clearances immediately upon their down-selection and the clearances must be in place no later than three months from the date on which they were downselected. Subsequent failure to obtain the required clearances will result in the removal of that bidder from the competition
III.1.5)Information about security clearance:
III.2)Conditions for participation
III.2.1)Personal situation

Criteria regarding the personal situation of economic operators (that may lead to their exclusion) including requirements relating to enrolment on professional or trade registers

Information and formalities necessary for evaluating if the requirements are met: The Authority will apply all the offences listed in Article 39(1) of Directive 2009/81/EC (implemented as Regulation 23(1) of the Defence and Security Public Contract Regulations (DSPCR) 2011 in the UK) and all of the professional misconducts listed at Article 39(2) of Directive 2009/81/EC (see also Regulation 23(2) in the DSPCR 2011) to the decision of whether a Candidate is eligible to be invited to tender.
A full list of the Regulation 23(1) and 23(2) criteria are at http://www.contracts.mod.uk/delta/project/reasonsForExclusion.html#dspr

Candidates will be required to sign a declaration confirming whether they do or do not have any of the listed criteria as part of the pre-qualification process.
Candidates who have been convicted of any of the offences under Article 39(1) are ineligible and will not be selected to bid, unless there are overriding requirements in the general interest (including defence and security factors) for doing so.
Candidates who are guilty of any of the offences, circumstances or misconduct under Article 39(2) may be excluded from being selected to bid at the discretion of the Authority.
In addition to the above the Authority will apply all the offences listed in Regulation 23(4) of the Defence and Security Public Contract Regulations (DSPCR) 2011 to the decision of whether a Candidate is eligible to be invited to tender.

III.2.2)Economic and financial ability

Criteria regarding the economic and financial standing of economic operators (that may lead to their exclusion)

Information and formalities necessary for evaluating if the requirements are met: (b) The presentation of balance-sheets or extracts from the balance-sheets, where publication of the balance-sheet is required under the law of the country in which the economic operator is established
(c) where appropriate, a statement, covering the three previous financial years of the economic operator, of:(i) the overall turnover of the business of the economic operator; and (ii) where appropriate, the turnover in respect of the work, works, goods or services which are of a similar type to the subject matter of the contract.
In addition to the above the Authority also reserves the right to request any additional information which it considers necessary in order to demonstrate that the Potential Provider has sufficient economic and financial resources to deliver the requirement.

III.2.3)Technical and/or professional capacity
III.2.4)Information about reserved contracts
III.3)Conditions specific to services contracts
III.3.1)Information about a particular profession

Execution of the service is reserved to a particular profession: no
III.3.2)Staff responsible for the execution of the service

Section IV: Procedure

IV.1)Type of procedure
IV.1.1)Type of procedure

IV.1.2)Limitations on the number of operators who will be invited to tender or to participate

Envisaged number of operators 3
Objective criteria for choosing the limited number of candidates: LCS(T) Commercial Team will conduct a Pre-Qualification exercise to select the Potential Providers who will be invited to negotiate for the requirement. A Pre-Qualification Questionnaire (PQQ) will be issued to those Potential Providers for which an Expression of Interest has been received by the closing date. The PQQ will provide for a two stage evaluation. Stage 1) a Pass/Fail evaluation on the following areas: Corporate and Financial Capability – Financial and Economic Standing: provide financial information and / or commentary relating to: post balance sheet events; pending changes in ownership; revenue and profit from operations relating to the scope of LCS(T); your current auditor and banker; material pending litigation; contingent liabilities crystallised since the last set of audited accounts; any other financial commitments or liabilities that could impact your ability to meet the project requirements; identification of any financial statements that have been qualified by auditors; willingness to provide a PCG or equivalent; provision of a credit rating equivalent to investment grade and where this is not the case evidence that clearly demonstrates that this will not have an adverse impact on the ability of the Potential Provider to perform the services; Legal and Commercial Capability – Organisational: provide information relating to the intended commercial structure of the bidding entity; provide terms agreed between Consortium members and any draft shareholder agreement where these exist. Legal and Commercial Capability – HR: confirm that you have a pension scheme or the intention to provide a broadly comparable scheme to the PCSPS; confirmation that you will accept the requirements of the HMT guidance contained in Staff Transfers from Central Government: A Fair Deal for Staff Pensions; provide information of all staff transferred to you under TUPE during the last three years; provide details of any court or tribunal proceedings in respect of personnel matters you have been involved in over the last three years; provide details of disputes between you and other companies or Trade Unions connected with TUPE transfers in the last three years; you must demonstrate that you have Equality and Diversity policies that are compliant with relevant legislation; provide information on material labour relations problems or trade disputes; Legal and Commercial Capability – Health and Safety: provide details of your Health and Safety policy and performance; Legal and Commercial Capability – Corporate and Social Responsibility: provide details of your Corporate Social Responsibility policy: Defence and Security – Security of Information; demonstrate that you have the appropriate Facility Security Clearances or are willing to obtain them and that you have not been previously unsuccessful for reasons which are still extant.
Stage 2) of the PQQ evaluation will be a series of scored technical questions and case studies which will test the Potential Providers’ capacity and capability in the following areas: Supply Chain Integration; Storage; Distribution and Freight (including Removal Services); Procurement; Quality; Information Systems; ability to raise finance; management of performance failure, transparency and sharing of management information; Corporate Social Responsibility; management of large scale programmes; operational flexibility; business continuity and disaster recovery; large scale procurement; inventory management; and product specification. Potential Providers’ who are ranked in the top three and achieve a total evaluation score equal to or more than 60% will be invited to participate.
IV.1.3)Reduction of the number of operators during the negotiation or dialogue

Recourse to staged procedure to gradually reduce the number of solutions to be discussed or tenders to be negotiated no
IV.2)Award criteria
IV.2.1)Award criteria

The most economically advantageous tender in terms of the criteria stated in the specifications, in the invitation to tender or to negotiate or in the descriptive document
IV.2.2)Information about electronic auction

An electronic auction has been used: no
IV.3)Administrative information
IV.3.1)File reference number attributed by the contracting authority:

IV.3.2)Previous publication(s) concerning the same contract

Prior information notice

IV.3.3)Conditions for obtaining specifications and additional documents or descriptive document
IV.3.4)Time limit for receipt of tenders or requests to participate

10.3.2013 – 23:59
IV.3.5)Date of dispatch of invitations to tender or to participate to selected candidates
IV.3.6)Language(s) in which tenders or requests to participate may be drawn up


Section VI: Complementary information

VI.1)Information about recurrence

This is a recurrent procurement: no
VI.2)Information about European Union funds

The contract is related to a project and/or programme financed by European Union funds: no
VI.3)Additional information:

An Industry Day will be held on 14th March or 15th April 2013 at the Defence Academy, Shrivenham.
The MOD may use AWARD to assist in the management of the PQQ evaluation process and/or any subsequent Tender Evaluation.
It is to be noted that this requirement is subject to UK Government policy on transparancy and that the Pre Qualification Questionnaire, Invitation to Negotiate and any resulting Contract Documents may be subject to publication in a redacted format.
Suppliers interested in working with the Ministry of Defence should register on the MOD Supplier Information Database (SID) Register, available at www.contracts.mod.uk. The MOD SID is a database of active and potential suppliers available to all MOD and UK Defence procurement personnel, and is the main supplier database of MOD Procurement organisations. Please note: the registration and publication of a company profile on the MOD SID does not mean or imply that the supplier has in any way been vetted or approved by the MOD. Suppliers wishing to compete for advertised MOD contracts must respond to any specific call for competition by submitting a separate expression of interest in accordance with the instructions of the purchasing organisation.Advertising Regime OJEU:- This contract opportunity is published in the Official Journal of the European Union (OJEU),the MoD Defence Contracts Bulletin and www.contracts.mod.uk GO Reference: GO-201321-DCB-4559273

VI.4)Procedures for appeal
VI.4.1)Body responsible for appeal procedures

LCS(T) Commercial Team, DE&S
As detailed at Section 1 I.1

VI.4.2)Lodging of appeals
VI.4.3)Service from which information about the lodging of appeals may be obtained

LCS(T) Commercial Team, DE&S
As detailed at Section 1 I.1

VI.5)Date of dispatch of this notice:1.2.2013