Why run a competitive tender for Air Navigation Services?
Tendering is already acknowledged as an effective way to determine if you have the best supplier available for your requirements, whether that be an existing or new provider.
The process can deliver best value for money, encourage innovation, and stimulate the competitive market.
According to evidence given to a European Commission hearing¹, air traffic control constitutes between 20-50 per cent of the costs of running an airport.
APUS experience supporting the procurement process
The management team of a UK regional airport, having decided to explore ANS competition as an opportunity to ensure competitive pricing and best behaviours from its future service provider, engaged APUS, through another specialist partner, to undertake an effective procurement process in 2018/19.
Whilst the case for competition may be compelling, airport management teams often do not have the luxury of the additional spare capacity to look at ANS supply options sufficiently early or have awareness of the time needed to plan and execute a successful process.
APUS worked with the local team to capture their requirements from an operational perspective, however this, and similar engagements have demonstrated that simple measures such as total ATM movements or delivering a peak runway capacity are insufficient differentiators.
Organisational behaviours are increasingly important as leaner operational teams need assurance that their chosen provider of ANS, vital to the success of the airport, will be fully aligned to their own objectives, values and ways of working.
Through facilitated discussion, it was possible to identify what optimal behaviours the team wished to see, and equally importantly, capture what existing positive traits are to be recognised and maintained by an existing supplier, and therefore required by any potential future provider.
Additionally, CEO/ COO level engagement, as well as working with the teams responsible for day-to-day delivery meant that it was possible to understand and fully incorporate strategic business imperatives, as well as purely operational requirements.
This focused approach ensured that the competition was executed with clear intent regarding desired outputs, as opposed to being simply a routine custom and practice exercise.
Risk management
It is important to any identify risks and issues associated with existing service provision at the airport. APUS worked with the client team to identify what, if any, intellectual property was generated through ANS delivery and the infrastructure used.
Understanding the ownership, value and rights of these assets helps establish strategies to address any potential issues throughout the procurement process. Similarly, an understanding of any delegated or subcontracted services provided by or to the current ANS provider was also used to influence the design of the tender documentation.
Breadth of capability
Success on the project was achieved by early engagement of domain specialists to not only lighten the load on the airport management team, but also help everyone involved understand the elapsed time required to create the competition strategy, identify the most effective procurement method, compete the processes and transition to new service arrangements.
The creation of a clear procurement plan with program decision milestones not only focused thinking, but facilitated effective communications and engagement with all stakeholders, such as the airport board, regulators, and the wider industry.
The range of skills and experience in the team provided not only capacity, but also a flexibility and agility which was demonstrated in the ability to rapidly respond to a change in Government strategy affecting the aviation sector with minimal disruption to the overall timetable for the procurement exercise.
Outcomes
At the conclusion of the process, the client had achieved a new service provision contract for an expanded range of services, with a supplier that they believed demonstrated technological innovation, operational excellence and impressive engineering capabilities.
How you can benefit
Reflecting on the experience for all involved, the following are some areas where APUS and its partners could deliver benefits to organisations considering the use of procurement processes to meet their strategic objectives:
References
¹ European Commission hearing on the preparation for RP3 – (Dec 2016)
