Present:
Howard Shiplee - Director of Construction (ODA)
Ron Brooks - Programme Director & CEO (CLM)
Rob Knight - Head of Procurement & Contracts (CLM)
Rab Brown - Senior Programme Manager (CLM)
Rudi Klein
- SEC Group (CEO)
John Nelson
- SEC Group (Executive Secretary)
Preliminaries
1.
The meeting was held to follow up issues raised by SEC Group in its response to the ODA’s draft procurement strategy published last year. The SEC Group opened the meeting by emphasising that there was mutuality of interest in that both sides fully believed in best practice procurement and all that entails as far as partnering, early involvement and payment security was concerned. The issue, as always, was to identify the most effective means of ensuring that best practice was applied.
Ensuring Best Practice along the Supply Chain
2.
SEC Group explained many of the problems that arise within the supply chain. ODA’s policy of using the NEC contract was to be applauded. However, the concern was that bespoke amendments would be made to the NEC documentation that would be primarily aimed at risk transfer rather than involve any genuine attempt to share risk. The experience on public sector projects such as the Procure21 framework model indicated that clients’ determination to achieve best practice was undermined by poor practice downstream.
3.
In response the ODA made the following points:
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The priority is to select contractors which are absolutely committed to best practice.
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Although the ODA/CLM could not manage everyone’s affairs, it would be insisting upon collaborative working since this was the only way to achieve best value.
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There has to be a single point of responsibility but, also, there has to be transparency throughout the supply chain.
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It should be borne in mind that the Olympics will only be utilising 10% of the industry’s capacity at the height of construction activity. [Interesting fact: at the peak of activity the ODA will be employing 20,000 people]
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CLM will have a dedicated team in place that will monitor and audit what is going on within the supply chain to establish whether there is anything happening that could affect performance.
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Olympic projects will be completed on time but the process of delivery has to be cost effective and without interruption.
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The 2012 Commitments were a “no-brainer” – the ODA would have no trouble in implementing them.
4.
SEC Group made the following points:
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Whist recognising that Olympic procurement will only involve a small part of construction capacity, it is important to acknowledge what they represented - they will be an exemplar for best practice.
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The SEC Group represented the highest value component of construction activity – specialist engineering – and, therefore, it is important to establish a dialogue with ODA/CLM to ensure that Olympic projects will run smoothly.
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Whilst the Commitments were (or should be!) a “no-brainer”, the ODA/CLM should know that there has been opposition to the inclusion in the Government’s Payment Charter of the requirement that all payments should be made within 30 days.
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SEC Group’s concern is to work with the ODA/CLM to remove obstacles to achieving genuine collaboration – these primarily relate to payment problems.
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The 2012 Commitments refer to project bank accounts (PBAs) and SEC Group would like to see these utilised on Olympic projects.
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Project insurance is key to facilitating teamworking and it is hoped that ODA/CLM would be considering this.
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However, SEC Group was pleased that the ODA/CLM would be engaged with the supply chain to ensure that there was genuine collaboration.
ODA/CLM made the following points:
5.
Serious design/construction procurement will be taking place within the course of this year – we want to see project teams coming together and positioning themselves for the work.
6.
We will want to know whether supply chain partners are being paid; we will be intrusive.
7.
With regard to PBAs, the ODA/CLM will be meeting with Bucknall Austin to discuss PBAs. But, there will be 40 major projects for the Olympics with, in total, 15,000 contracts. If PBAs are going to be set up, it will have to be on a selective basis.
8.
It is not the intention of the ODA to deduct retentions
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9.
The ODA/CLM will be using project insurance [they will be interested in attending the project insurance strategy meeting on 23 February once details are received from SEC Group].
Other matters
10.
The ODA/CLM is very keen on “cradle to grave” procurement as recommended in the SEC Group response to the ODA’s draft procurement document. They would be looking at the earliest opportunity to involve firms; they want to see the delivery team up-front.
Keeping abreast of Olympic Opportunities
11.
ODA/CLM produced the 2012 website which firms are invited to use as a vehicle in order to get fit for procurement opportunities. A Business Network will shortly be launched in order to provide daily feedback on opportunities.
Agreed actions for SEC Group and ODA/CLM
12.
ODA/CLM will attend the SEC Group Board dinner on 27 March 2007 (Rob Knight and, possibly, Howard Shiplee).
13.
SEC Group to provide ODA/CLM information on lead contractors likely to implement the 2012 Commitments. [ODA/CLM also interested in receiving information about companies operating bad practice, but this could involve problems such a libel actions].
14.
SEC Group to help ODA/CLM to establish links with employers prepared to engage local people.
[1]
[ODA will provide training]
15.
SEC Group to help ODA/CLM to engage with SMEs around the country to encourage them to participate in Olympic Projects. [ODA will pay the cost of delivery and movement of materials and labour to site.]
16.
ODA/CLM will organise an industry day together with SEC Group to discuss the opportunities available and allow for dialogue with companies especially SMEs. [This should take place within 2 months]