Defence Infrastructure Organisation

Thursday 24th May 2012 Written Statements

[The Secretary of State for Defence (Mr Philip Hammond)]

In taking forward our work to develop a new operating model for defence in line with the changes recommended in Lord Levene’s defence reform report, the Defence Infrastructure Organisation (DIO) was established on 1 April 2011, bringing together all aspects of infrastructure asset management and facilities management under one organisation. The two-year DIO transformation programme, initiated in April 2011, will determine over the next 12 months both the future operating model and the most appropriate corporate structure for DIO to deliver best value for money and achieve maximum operating cost savings.

Earlier this year DIO undertook a soft market testing exercise to explore prospective roles for the private sector, test some of the commercial principles being considered by DIO and understand likely levels of interests from industry in partnering with the DIO. The output from this process indicated that industry has a substantial interest in being involved in DIO’s transformation and confirmed that the involvement of a strategic business partner in DIO’s transformation should be pursued. To this end, DIO will now commence a procurement process to assess whether the involvement of a strategic business partner in its transformation offers the best value for money solution for defence.

The competition will shortly be announced through an advertisement in the Official Journal of the European Union. A successful conclusion of this procurement will enable DIO to make a significant contribution to the savings which the Department needs to make as set out in the 2010 strategic defence and security review.