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Defence Estates

Defence Estates spends more than £1bn a year on construction, making it one of the UK's super-clients. It owns more than 1% of the nation's total land area.

What is now Defence Estates (formerly Defence Estate Organisation) was born in 1995 with the aim of helping the Ministry of Defence optimise management of its land, buildings and installations. It owes responsibility to all three armed services, and also manages US military installations in the UK.

DE became a Government agency in 1997. In 1998, following recommendations made in the Strategic Defence Review, it embarked on a programme of structural and operational change. Principal innovations included making the chief executive accountable to ministers for cost-efficiency, making DE responsible for all MoD property assets, and development of a new procurement model.

Defence Estates' preferred procurement route is the Private Finance Initiative. More than 25 projects have been undertaken to date, either to deliver or manage non-core assets such as water distribution and sewerage systems. But where the PFI won't work DE has committed to using prime contracts. Commercial director Ted Pearson claims that in practice the two procurement models are closely allied but where one uses private capital the other is funded from the public purse. PFI projects and prime contracts will be advertised in the Work Services Bulletin and the European Journal.

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