Ryan Daly, a sales manager at Queensland-based GSE Services, acknowledges that the tender process used by the Australian Defence Organisation (ADO) is the fairest method of determining who wins commercial contracts. But it doesn’t make it an easy ride for his company.
GSE Services, which is an offshoot of the military procurement company Milspec Services, has already won a number of contracts from the Australian military, chiefly for pushback tractors. Although GSE Services also sells to domestic airlines, the ADO is a vital part of its business.
But it’s a highly competitive market. GSE Services is one of a number of suppliers to the Australian military – most of which work in conjunction with overseas manufacturers – and so the company has to fight ferociously hard to win lucrative contracts. Daly describes the bidding process as extremely time-consuming, and there is no guarantee of success.
GSE Services has to continually monitor the AusTender website (www.tenders.gov.au) for news of requests for interest (RFIs). These RFIs are put out by the Defence Materiel Organisation, the government agency responsible for the acquisition, support and disposal of equipment for the Australian military.
When GSE Services spots an RFI which falls within its remit, it has to act fast. First, it must decipher pages of “legal mumbo-jumbo”, then it has to invest time and money in putting a bid together. Third, is has to sit back and wait.
“Everything goes out for tender now, so that the process is fair to everyone and there’s no bias, but it’s a painstaking process,” Daly said. “They can take months to make the decision and even after you win a tender, they are not bound by any law to pursue the purchase. They can pull out at any minute if budgets get cut in a recession, or we get a change of government.”
Requests for tender (RFTs) are published in accordance with Commonwealth Procurement Rules. The request must include the closing date, a description of the services required, and a set of terms and conditions.
For GSE equipment, the Royal Australian Air Force (RAAF) will tell the Defence Materiel Organisation (DMO) what it requires and give them an estimated budget. The DMO then has to go and source it for them.
“The final decision to buy is based on a value-for-money assessment of the total cost, including support maintenance and disposal costs,” says Jonathan Anglin, systems program office director at the DMO.
“But we also try to be as flexible as possible. The majority of GSE procurements are outright purchases, but where a leasing arrangement demonstrates better value for money, it is also considered.”
When additional vehicles are added to an existing fleet it may be cost-effective to buy directly from the previous supplier or manufacturer. Maintaining a standard fleet simplifies the purchasing process and reduces maintenance costs.
“After we receive the parts, the majority of operational maintenance, such as changing oil and tyres, is done by the RAAF services, but most of the deeper level maintenance is provided by the suppliers,” said Anglin.
At GSE Services, Daly is waiting to hear whether his company has won a lucrative contract to supply K loaders, which are used to rapidly load and unload pallets from aircraft. GSE Services’ proposal involves sourcing the K loaders from AMSS, a Welsh company based in Glamorgan. He has flown over to Wales to liaise with the suppliers and put together a competitive bid.
“It’s not unusual for us to fly to Europe, or the US, to see potential suppliers. The Australian GSE manufacturing industry is quite ordinary – which personally I put down to high taxes and unions creating a difficult working environment for owners – and a lot of GSE manufacturing has gone offshore,” Daly comments.
“A good majority of companies we deal with are in Europe – especially the UK and Germany – and in the United States. AMSS falls into that category. We’ve spent time in Wales putting together a bid and we’re quite confident, but we can only wait for the decision to be made.”
If GSE Services wins the tender to supply the K loaders, it will dwarf its biggest deal with the Australian military to date, which was an AUD$10 million (US$10.4 million) contract to supply thirteen 18-tonne pushback tractors made by Schopf, in Stuttgart, Germany. GSE Services lost a separate contract bid for twenty 50-tonne tractors because TUG, a US company, beat them on price.
“It’s a great advantage for the Australian Defence Organisation to have someone liaising with the overseas company. It means they are not the ones getting up in the middle of the night to make phone calls, or chasing emails the next day. We’ve dealt with Schopf for years and we know exactly how they work,” Daly informs.
GSE Services supplies training for RAAF mechanics on basic operation and maintenance. Plus, it offers a ‘train the trainer’ course so that the RAAF can subsequently provide its own training courses for mechanics.
“We also stock high-usage spares to speed up repairs, although they are rarely needed. Occasionally, it has been necessary for a Schopf-trained specialist to fly in from Germany and we have arranged that too,” he adds.
The Australian Defence Force (ADF) is the largest of its type in Oceania and, although relatively small compared to its equivalents in Asia, it is technologically sophisticated and backed by a significant budget by worldwide standards.
It has 4,617 vehicles, trailers and platforms classified as GSE in the two categories of Materiel Handling and Aircraft Maintenance. Within these two categories there are a total of 439 types, mainly trucks, cranes, trailers, cargo loaders, air-conditioning units, ground power units, air start units, bomb loaders, tow-motors, forklifts, elevated work platforms, potable water vehicles, waste trucks and aircraft boarding stairs.
The Australian Army deploys a range of GSE vehicles to the four Army Aviation units around Australia. Two of the units are in Queensland, in Oakey and Townsville. One is in Darwin, in the Northern Territory, and the last is in Sydney, New South Wales.
The Royal Australian Navy also deploys a range of GSE on board its ships whenever a flight is embarked. But the RAA does not routinely deploy GSE to overseas airfields.
And the RAAF has 11 major bases around Australia with different various aircraft types, all of which require different GSE equipment.
As well as at home, the ADF has deployed a variety of GSE on exercises across the globe, including to the Middle East, East Timor and the Solomon Islands. In the Middle East, GSE is deployed to support the RAAF when the need arises, or when coalition partners can’t help out.
GSE has also been employed by the ADO to help facilitate aviation operations in the wake of natural disasters. This happened in New Zealand as a result of the earthquake in 2010 and in Japan after the tsunami-related Fukushima nuclear emergency in April 2011.
The range of GSE equipment used provides plenty of opportunities for GSE Services to win contracts. Furthermore, the company deals in test equipment, including fault-finding testers and ramp-testing equipment, and also manages repairs on items such as aircraft jacks and hydraulic units.
Finally, GSE Services also has a small amount of work in New Zealand. It has one pushback tractor in service and offers maintenance for some of the country’s aircraft and helicopters.