---

Marine Services

Marine services embrace a wide range of waterborne and associated support activities, both in and out of port, at Portsmouth, Devonport and on the Clyde, as well as maintenance of UK and overseas moorings and navigation buoys and support to a range of military operations and training. Under the current arrangements, in port services are provided by Serco Denholm Ltd., under Government-owned contractor-operated arrangements, while out of port services are undertaken by the Royal Maritime Auxiliary Service (RMAS). Since 2002, the Ministry of Defence has been working to find a long-term service provider, and following an industry briefing day in May 2003 and a subsequent prequalification questionnaire exercise, four bidders were short listed, although two subsequently withdrew. The two remaining bidders, Serco Denholm and the Starfish Consortium (the latter comprising Babcock Naval Services (Clyde), Devonport Management Ltd. (Plymouth), Fleet Support Ltd. (Portsmouth) and Smit International (Scotland) Ltd.), were invited to submit two proposals offering a complete service: One of these proposals reflected a partnering arrangement with the RMAS, whereby staff remain in the MOD; the second proposal entailed TUPE transfer as appropriate. Detailed bid evaluations, using predetermined criteria, have now been completed and Serco Denholm's proposal to provide the complete service, including taking ownership of MOD marine service assets, has been selected as the preferred bidder. Subject to successful final negotiations with the company, a contract will be awarded later this year with service commencement (vesting day) some three months after. While Serco Denholm's proposal may yet be modified as a result of the final negotiations, the ensuing arrangement should be easier to manage than the current ones, be more flexible and will offer the greater potential for continuous improvements. A key implication of Serco Denholm's proposal results in the transfer of the RMAS workforce to the company on vesting day under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations. New pension arrangements will also be introduced that are broadly comparable to those currently enjoyed under the Principal Civil Service Pension Scheme. A further key aspect for MOD will be the closure of Her Majesty's mooring depot at Pembroke Dock, which currently employs 38 MOD staff, within 12 months of vesting day. However, Serco Denholm has developed plans with the Milford Haven Port Authority, the Welsh Development Agency and Pembrokeshire County Council to encourage inward investment and support building and infrastructure projects. This will provide alternative opportunities outside the MOD to sustain and improve job creation, in turn underpinning future jobs. The changes in the way the service will be provided will result in a number of post reductions, although, Pembroke Dock aside, it is too early to determine the exact numbers, or be specific on how different locations will be affected. As far as possible, reductions will be achieved through either natural wastage or voluntary means although the need for some compulsory redundancies cannot be ruled out at this stage. Throughout the tendering process the Department has engaged with the relevant trade unions. Informal dialogue will continue during the negotiation phase and the formal TUPE consultation process will commence following award of contract.