The Client

Maritime Cross Platform Systems Program Office (MCPSPO) is transforming from an inventory procurement organisation supporting all of Navy to a Systems Program Office sustaining selected cross platform systems. MCPSPO is now responsible for equipment and systems across multiple maritime platforms. Its functions range from tactical procurement of inventory to end-to-end in-service support of complex systems.

The Challenge

Defence investigated a number of disparate, inefficient and potentially costly commercial contracts. MCPSPO was tasked with transforming these legacy arrangements into strategic sourced performance-based contracts that delivered all elements of in-service support (including maintenance, configuration and ILS management). 

However, MCPSPO did not have the in-house capability or capacity to explore innovative contracting models. Additionally, the original equipment manufacturers (OEMs) and agency suppliers of the cross-platform equipment were not familiar with contemporary strategic sourcing approaches.

Our Engagement

Coras was engaged by MCPSPO’s strategic sourcing section to provide specialist procurement and contracting services. We were tasked with delivering more capable performance-based contracts to meet MCPSPO’s sustainment needs. This included developing or optimising contracts for:

  • LM2500 Gas Turbine Systems
  • MTU Diesel Systems
  • Mini-Typhoon, Typhoon and Toplite Systems
  • Infrared Search and Track System

Collaborating with Defence and Industry stakeholders (including Platform SPOs, OEMs and in-service support providers), we facilitated workshops to identify MCPSPO’s intricate requirements. We identified key measures of success (such as improving capability availability and reliability) in a contract model that would significantly reduce transactional requirements for the Commonwealth, while still delivering the required capability. 

With these success measures informing our approach we analysed historical cost and system availability, benchmarking these metrics across the commercial Maritime industry and overlaid with Navy’s operational profiles. We built a detailed cost forecast to test the market and identify potential support partners. 

Our support services injected new thinking, as seen in the MTU Diesel Systems which extended across Navy and Army capability at a fixed annual fee—a first of its kind for Defence. Our solutions also leveraged scale, using the Joint Logistics Command maintenance services contract for the maintenance and logistics support of the RAN’s M242 cannons.

“During our engagement we were the Commonwealth’s lead negotiator in setting up In-Service Support Contracts. Our analysis of proposals and negotiation ability saved the Commonwealth millions of dollars under these performance-based contracts,” said Phil Cutts, Managing Director at Coras Solutions.

Through astute negotiations and understanding Industry’s appetite to become holistic support contractors to cross-platform products, the contracts were secured and phased-in.

The Results

Collaborating with our commercial team, the new contract models supported MCPSPO’s need for greater efficiency, delivering:

  • Reducing transactional activity, allowing APS teams to focus on governance and assurance
  • Improved risk management by ensuring that the party most empowered to manage each risk is required to do so under the contract
  • Improved cost transparency and certainty for budgeting through recurring services model contracts with OEM in-country agents
  • Cost savings (direct and indirect) by reducing historical sustainment costs and removing the high-transactional burden of CoA SPO personnel

MCPSPO needed to optimise its costly legacy commercial contracts. Through facilitated workshops, in-depth data analysis, and contracting mechanisms not used in Defence, Coras developed a new contract model, delivering greater equipment availability and almost $18M in savings.

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