The central aim of prime contracting on the Ministry of Defence [MOD] estate is to improve value for money (Defence Estates, 2002).  MOD intends to use Regional Prime Contracting to procure more than £3.5 billion of construction and maintenance work over a seven to ten year period. It has achieved this by competitively appointing a number of primary suppliers on the basis of a financial and technical scoring mechanism which includes an assessment of a contractor’s ability to manage a large, projected workload in a collaborative environment over several years.  Prime contracting uses techniques developed from the MOD’s Smart Acquisition processes for equipment procurement.

Each Regional Prime Contract consists of a framework agreement to provide  “Core Services” (maintenance and improvement of the defence estate) with the facility to “inject” capital works projects with design and build at the heart of the construction procurement process and utilising, so far as possible, rates and prices arising from the original tender.  The larger discrete projects are known as “Injected Core Works” and are expected to account for between 10-25% of the overall anticipated expenditure.

 This paper disseminates the reasons why this form of contracting is so attractive to government and contractor alike and how this convergence has produced the environment for implementation of a complex and verifiable approach to spending public funds. There is an overriding criterion of converting value to best achievable costs; to address this, the focus will be upon Maximum Price Target Cost [MPTC], which is the primary cost modelling and pricing tool on MOD Regional Prime Contracts and on Injected Core Works. The authors have focused in the first instance upon the role and procedures that the client and contractor have established for a specific Regional Prime Contract.