Our approach and development of the successful commercial strategy and payment mechanism was directly attributable to ALC’s award of the PFI contract.
The MoD £600m contract was for the support, sustainability and delivery, on a worldwide basis, of all the MOD’s ‘C’ class vehicles during peacetime with the ability to increase the level of service to meet operational requirements i.e. going to war. Arnmore were responsible for the management of the commercial elements of the ALC (Amey Lex Consortium) Tendering for the contract.
Key Client Benefits:
- Management of the business process approvals included liaising with Financial and Legal advisors to ensure compliance with MOD requirements.
- Development of a bespoke Cost Model and Payment Mechanism Model. This modelled the capital cost of all the equipment, the life cycle of equipment, the operating cost including the support and maintenance of the equipment and the cost and benefits of delivering the capability worldwide.
- These sensitivities were utilised in order to achieve the optimum pricing position for the use in the successful Pricing Mechanism.
- Risk sensitivities were modelled to demonstrate how the revenue was affected e.g. maintenance cost variation, variations in equipment demanded by MOD, inflation fluctuations, usage variation, etc.
- Negotiation and advice during the preferred bidder stage between ALC and MoD.