Defence Minister Don Touhig MP today announced that Babcock DynCorp has been awarded the Ministry of Defence's Regional Prime Contract (RPC) covering its estate in the East of England. The value of the Contract is in the region of £500 million, and follows successful conclusion of discussions with Babcock DynCorp - a Joint Venture comprising Babcock Infrastructure Services and DynCorp International, who were appointed as Preferred Bidder in July 2005.

Mr Touhig said:

'The successful completion of negotiations is a tribute to the effective collaborative approach between Defence Estates and Babcock DynCorp. I am confident that an effective service delivery system has been put in place - one that will deliver better value for money and greater efficiencies to its customers and users of the estate. The seeds have been sown to enable this relationship to flourish in future years, to the benefit of the Ministry of Defence in the Eastern area, those who live and work on the estate and to the taxpayer.'

As the Prime Contractor, Babcock DynCorp will be responsible for the delivery of capital works and property maintenance at 26 major Ministry of Defence sites across the East of England comprising the counties of Nottinghamshire, Essex, Leicestershire, Bedfordshire, Cambridgeshire, Derbyshire, Lincolnshire, Norfolk, Northamptonshire, Suffolk, Hertfordshire and Rutland. The contract will run for an initial seven-year term, with a Ministry of Defence option to extend to 10 years subject to the satisfactory performance of the contractor, and is the fifth of five regional arrangements to cover the defence estate.

Implementation of Regional Prime Contracting is a core feature of Defence Estates' Strategy to improve the value for money gained from expenditure on the construction and maintenance of the estate. Efficiencies will come from improved supply chain management, contract incentives, economies of scale and collaborative working to promote a culture of continuous improvement. This applies the principles of 'Smart Acquisition' to estate procurement with a clear separation of responsibilities between the Ministry of Defence and the Prime Contractor.

Speaking on behalf of Babcock DynCorp, Kevin Thomas, Managing Director, commented:

'Babcock DynCorp are proud to have been chosen by Defence Estates to manage the estate maintenance and capital works requirements for East Region under the Regional Prime Contract (East). This is the second of the Regional Prime Contracts awarded to a Babcock Joint Venture and shows Defence Estates confidence in Babcock Infrastructures Services and our chosen partners' capability to manage this type of Output-Based Contract.

'I am confident that the contract represents good value to the Ministry of Defence, Defence Estates and that the service it offers will benefit the end customer with increased levels of service. Having achieved contract award within five months of being announced Preferred Bidder, represents a considerable effort by the entire project teams and I would like to extend my thanks to all those involved.'