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TenixToll preferred tenderer for future Defence warehousing and distribution network.

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MEDIA RELEASE Senator the Hon. Robert Hill Minister for Defence Leader of the Government in the Senate


17 Oct 2002 MIN 574/02


TenixToll preferred tenderer for future Defence warehousing and distribution network


The Government has endorsed the selection of the TenixToll consortium as the preferred tenderer for the Defence Integrated Distribution System (DIDS) project following a highly competitive tendering process, Defence Minister Robert Hill announced today.

Senator Hill said that the outsourcing of DIDS would result in a single point of delivery for Defence’s national warehousing and distribution services and maintenance support for selected land equipment.

"Ensuring Defence has a reliable and efficient inventory system is just as important as providing leading edge equipment to our personnel," Senator Hill said.

"The tender from TenixToll offers to exploit the best lessons from industry in delivering a streamlined and responsive system at considerable saving to Australian taxpayers."

Defence will benefit from a wealth of commercial experience - from the Tenix group in engineering and maintenance and from Toll Holdings in supply chain management. Both companies have considerable experience in Defence logistics - Tenix through their current warehousing and maintenance contract at Bandiana, Victoria and Toll Holdings through the provision of line haul services to the ADF. A further benefit will be that risk will be shared with the private sector.

The DIDS contract has been developed in a way that specifies the outcomes we desire and the performance standard we expect. At the same time, it leaves TenixToll to make commercial decisions on how best to deliver. The contract also rewards performance where it exceeds expectations and penalises performance where it falls short.

Importantly, at a cost of around $880 million, TenixToll’s tender offers the prospect of savings of around $80 million over a 10 year period against DIDS’ current cost and savings of around $290 million against the original baseline for the project. The project has also allowed the ADF to reassign around 500 military personnel to other higher priority activities.

The DIDS request for tender required that all offers were sensitive to maintaining employment levels in rural and regional Australia and to meet mandated employment levels in particular rural and

regional locations.

"TenixToll has proposed to deliver all services from all current DIDS sites," Senator Hill said. "In addition, TenixToll has undertaken to meet or exceed the employment levels mandated for rural and regional locations."

Under the project, military personnel will be re-deployed to other roles in the Australian Defence Force. Public Service personnel that are not retained by the preferred tenderer will be re-trained, re-deployed or provided redundancy packages in accordance with departmental guidelines.

TenixToll was selected from the field of six consortia by a tender evaluation committee chaired by a Senior Executive Lawyer from the Australian Government Solicitor as offering the best technical solution at a competitive price.

With the tender process finalised, Defence and TenixToll will begin negotiating detailed terms and provisions with a view to submitting finalised contracts to the Government for consideration in December.

Once contracts are in place, there will be a sequenced transition to the DIDS provider to ensure that ADF operations are not interrupted. Defence anticipates completing the transition by the end of 2003.



















Media contacts: Minister’s Office Catherine Fitzpatrick 02 6277 7800 or 0405 351 245 Department Richard Hogan 02 6265 2913 or 0419 621 753