CP5 Supply Chain Strategy

National Supply Chain
Strategy
Control Period 5
May 2013
Contents
1.
Context................................................................................................................................... 1
2.
Executive Summary .............................................................................................................. 3
3.
Outline.................................................................................................................................... 5
4.
Expenditure ......................................................................................................................... 10
5.
Priorities / Key Considerations.......................................................................................... 12
6.
Contracting Strategies........................................................................................................ 14
7.
Highlights of individual Regional and Programme Strategies ....................................... 18
8.
Engagement Strategies ...................................................................................................... 20
9.
Contacts............................................................................................................................... 24
10.
Tender / Contract Schedules ............................................................................................. 26
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
1. Context
■ Network Rail is responsible for the successful delivery of £4.5bn of enhancement and
renewal works to live operational infrastructure every year. During CP4 we have worked with
over 6,000 suppliers, using traditional and progressive forms of contract to support safe and
timely delivery whilst meeting progressively challenging efficiency targets, achieving 29% in
CP3 and being on course to achieve a further 23% in CP4. Since April 2009 we have
generated £17.3bn of work for our supply chain.
■ CP5 will bring a number of new challenges, including the safe delivery of increased volumes,
the drive for improved performance and illustrating value for money to stakeholders from
across the rail industry. As a supplier dependant business, Network Rail recognises that a key
pillar to meeting the CP5 efficiency challenge and supporting a more efficient industry is
improved and better integrated supply chain relations.
■ During the last 18 months, Infrastructure Projects has embarked on an overt programme to
transform supplier relationships and improve the level of engagement and collaboration.
Our ambition is for this transformation to have a lasting effect throughout the supply chain,
changing the dynamics across the industry.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 1
■ Fundamental to this change is the need to create a platform for innovation and leading edge
thinking and an environment of openness and trust from which tangible improvements to
the way we work are deployed. The crucible for this change was the establishment of the
Commercial Directors Forum (CDF) comprising 30 key suppliers who jointly committed to;
● Co-ordinate a whole industry approach to collaborative working and encourage
collaborative working to be the normal mode of operation within the industry.
● Recognise the commercial functions’ influence as a key business process contributing to
industry strategic aims and objectives.
● Improve the leadership of and influence of the commercial function in the rail industry.
■ Tangible, industry changing improvements deployed under the auspices of the CDF include:
●
●
●
●
●
●
●
●
●
●
●
●
A Fair Payment Charter that vastly improves liquidity to our second tier suppliers
Significantly shortened payment terms from 56 to 21days
Removal of retentions, from 3% to zero
A more efficient approach to the use of Parent Company Guarantees
The incorporation of a standard 5% tender weighting for Sustainability
BS11000 certification for collaborative working
A new performance measurement process, designed to reward positive behaviours
The creation of a number of alliances to deliver key programmes of works
Agreement to deploy NEC3 and other advanced collaborative contract forms
A mature and expanding industry forum, committed to pursuing commercial innovation
Collaboration on training & development and the identification of tomorrows talent
Improved work bank visibility and more effective cross industry communication
■ In keeping with improved visibility and better communication of our thinking is the development
and publication of our current philosophy, priorities and outline work-plans for CP5 via this
National Supply Chain Strategy. This document is intended to establish a common level of
understanding of what we plan to do and why, stimulate further dialogue and promote
engagement across the supply chain; an engagement designed to cement a collaboration
that we know will benefit the delivery of the CP5 portfolio and our industry at large.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 2
2. Executive Summary
■ A Better Railway for a Better Britain details the 10 key themes that are the reference points
for all that we do. Beneath them sit a number of priorities and key areas of focus that will
directly support the business and broader industry in meeting the challenges inherent in the 10
key themes and the delivery of the CP5 portfolio. They are;
● Safety: Pursuit of a greater contribution in the procurement process to delivering a step
change in safety.
● Engagement: Driving industry change through dialogue in industry forums, joint problem
solving and the development of progressive commercial relationships that improve
industry performance.
● Collaboration: Greater use of frameworks with an emphasis on corporate behaviours
and values and the introduction of progressive forms of contract from NEC through to Pure
Alliance Models. Expansion in the number of collaborations certified under BS11000 and
active support to our key suppliers where they are seeking similar certification.
● Performance: Progress across three elements, namely; 1. Supplier Performance:
Increased focus on industry acceptable performance metrics and their use in supporting and
illustrating improved performance; 2. Asset Performance: Procuring for asset resilience and
performance surety; 3. Commercial Performance: Promoting consistency and clarity of
costs and efficiencies through standard approaches to cost modelling, benchmarking and
measurement.
● Innovation: Rewarding innovation by supporting the development, deployment and
promulgation of new and effective techniques of delivery and commercial stewardship.
● Sustainability: Building on the 5% weighting in tender evaluations to integrate and
develop sustainability dimensions into all that we do.
● Communication: Continued dialogue through forums such as the CDF, industry bodies
and professional institutions, supplier forums and account meetings.
■ In what follows, we will highlight a range of key matters including the increased volumes
anticipated for CP5, our proposed range of contracting strategies and how to reconcile a
national approach with a devolved (Regional) organisation. We provide an extract of key work
banks, many of which we will now support with minimum committed values and identify key
stakeholders within Infrastructure Projects who will influence the refinement and deployment of
our National Supply Chain Strategy.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 3
■ But embedded throughout are the priorities stated and aspirations to work with industry to not
only drive a step change in our performance, but in our thinking. During the last 18
months we have illustrated what can be achieved by jointly leading industry change and this
document is the natural ‘next step’ in that journey, illustrating what we have learned and our
thoughts as to the key elements to successful delivery.
■ Regardless of where you are placed in the supply chain, if you are reading this
document you will probably have an active interest in the success of our endeavours
and any contribution that can refine and enhance our thinking is most welcome.
David McLoughlin, Finance & Commercial Director, Infrastructure Projects
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 4
3. Outline
■ This document sets out the structure and principles that will guide our contracting activity
over the five years of Control Period 5. Engagement with our regional business units will
provide a greater level of detail in respect of local tendering and contract letting plans, of which
a summary is provided in Section 10.
■ With CP5 still 10 months away, there will be refinements to this strategy and development of
the specific plans. These will be summarised and issued as updates regularly over the next few
months.
■ An example of such a development will be our approach to site labour resource; we are
determined to make significant improvements to site safety and are therefore already
seeking increases in the levels of directly employed operatives in safety critical posts on
our sites. As a consequence we will also seek to improve the management of contingent labour
supplies including behavioural consistency and Tier 1 / 2 relationships.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 5
■ As Network Rail enters the last year of Control Period 4 we are firming up bold plans to move
into Control Period 5. Infrastructure Projects (IP), together with its supply chain, will play a
vital role in these plans and this document sets out the strategies for ensuring that together, we
make a meaningful contribution to our future in terms of:
Generating outstanding value for
customers and taxpayers
Creating a better railway
for a better Britain
Becoming a trusted leader
In the rail industry
Working with our partners to improve safety, reliability,
capacity and value for customers and taxpayers
Achieving success through behaviours – being customer driven,
accountable, collaborative and prepared to challenge
■ Infrastructure Projects (IP) has a clear vision to be recognised as the best rail infrastructure
project delivery organisation in the UK and sees collaboration with our supply chain as a key
means of unlocking the necessary and significant improvements to achieve that. By
working closer with our supply partners we hope to attract innovative solutions and longer
term investment.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 6
■ In April 2012, IP significantly changed its organisation structure to achieve closer alignment
with its customers – the Network Rail Route businesses. We created 4 regional business
units and 4 major programme business units:
FTN/GSM-R
Signalling
Scotland & North East
Track
Central
Thameslink
Western & Wales
Southern
Figure 3.1
Business Units within Infrastructure Projects
■ So, whilst this document explains the drivers and themes of our strategic engagement with the
supply chain, the individual business units will publish unique strategies that reflect their
specific needs and challenges in the detail of their plans.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 7
■ To put the Control Period 5 challenge into perspective we will be delivering the biggest
capacity increase on the railway for 100 years. This starts with a Strategic Business Plan
that sees a £3bn increase in spend over that planned in Control Period 4.
■ IP will only achieve this level of project delivery through solid engagement with its supply
chain: some significant commitments have already been made, for example:
Q2
2013
Area of Spend
Q3
2013
Q4
2013
Q1
2014
Forecast
Award Date
CONTROL
PERIOD 5
Spend
Signalling Frameworks
Awarded
1,200m
ETCS Frameworks
Awarded
155m
Professional Services Framework
Awarded
300m
Level Crossing Frameworks
Jun-13
255m
Track – High Output
Dec-13
425m
Track – S&C
Jan-14
400m
Track – Plain Line
Jan-14
550m
Electrification Framework
Jan-14
2,000m
Regional Frameworks
Jan-14
5,200m
14000
12000
10000
550
400
425
300
255
155
10485
1200
2000
8000
5200
6000
4000
2000
0
Regional
Frameworks
Figure 3.2
Electrification
Framework
Signalling
Frameworks
Track – Plain
Line
Track – High
Output
Track – S&C
Professional Level Crossing
ETCS
Services
Frameworks Frameworks
Framework
Total
Significant Commitments of up to £10.5 billion
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 8
■ For projects not already committed some guiding principles will apply – we will seek to enter
longer term supply arrangements with partners selected on the basis of behavioural fit as
well as value. We will take account of sustainable approaches to delivery in addition to long
term reliability and most importantly an approach to project delivery that ensures the safety of
everyone involved. Earlier contractor involvement and the packaging of design with
implementation will be promoted to ensure better planning, better execution, improved levels
of innovation and investment together with smarter resource allocation.
■ We will continue to publish our pipeline of work and updated information will be available
through National and Regional conferences, Industry Associations and our existing Supplier
Account Management process. We welcome input from the supply market – a contact list is
provided in Section 9 of this document and all suppliers are encouraged to work with us to
meet these significant challenges during Control Period 5.
■ As we rationalise CP5 contractual arrangements we will rely on supply market feedback to
make sure we “right-size” our supply base to balance availability of resources and
opportunity for existing / new entrant contractors, whilst retaining a competitive spirit to
ensure VfM and a sustainable pool of resource for the sake of longevity.
Supply Base
Right size
Longer term
Early engagement
VfM
Resources
Safe
Sustainable
Efficient utilisation
Supply Chain Strategy
Network Rail Infrastructure Projects
Engagement
Behavioural fit
Open dialogue
Innovation & investment
May 2013
Page 9
4. Expenditure
■ The expected settlement for Control Period (CP) 5 shows an unprecedented level of
investment in the railways. For Infrastructure Projects this equates to a step change in the
level of expenditure and the volume of work that needs to be delivered safely and on time.
● Expected rise in Total Settlement from CP4 to CP5
● Expected rise in Infrastructure Projects share
£3.5 Billion
£3 Billion
(10%)
(15%)
■ This is equivalent to a rise of £600 million per annum, and will require continuous
improvement in the levels of engagement and performance amongst our supply chain to
meet the challenge.
50
40
37.5
34
30
23
20
20
10
0
CP4 IP
Figure 4.1
CP5 IP
CP4 Total
CP5 Total
Comparison of CP4 and CP5 settlements and the IP proportion (£ Billion)
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 10
■ Control Period 5 workbank values for Infrastructure Projects are broken down into the devolved
business units.
■ The 4 Regions and 3 Major Programmes, shown below, account for the vast majority of
expected Control Period 5 expenditure.
Signalling
£4.3 Billion
(Including SP&C)
Scotland & North East
£2.5 Billion
Track
£2.2 Billion
Central
£4.2 Billion
Thameslink
£1.6 Billion
Western & Wales
£4.7 Billion
(Including major projects)
Southern
£2.6 Billion
Figure 4.2
Total Control Period 5 Workbanks by Business Unit (Gross business plan figures)
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 11
5. Priorities / Key Considerations
IP’s Strategic principles for engaging with our
supply chain and shaping contractual
arrangements are driven by 10 key themes
that are central to Network Rail’s plans for a
better railway for a better Britain.
As mentioned earlier, each business unit will
incorporate these principles into their
individual strategies but will tailor their
application to meet local needs.
Shown overleaf are the key themes and our
Strategic Principles for how we intend to
support Network Rail in improving
performance in these fundamental areas.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 12
■ We will engage contractors early to collaborate on programme
delivery
■ We will seek support of our delivery partners to comply with the
Doing Work Within Possessions (DWWP) process
■ We will focus on designs and pro
long term reliability and whole life v
■ We will encourage and be open
incorporate ongoing maintenance w
These proposals will be linked with
long term reliability
■ We will continue and develop our regime of local and
national conferences
■ We will continue an open and frank dialogue with
Industry bodies such as RIA, CECA, RICA and continue
with Commercial Directors’ Forum and Tier 2 Conferences
Reliabl
infrastruc
Reliable
timetables
■ We will develop and continue the publication of our work
bank pipeline
■ We will further develop our process of Supplier Account
Management
■ We will develop and continue to publish performance
Opening up
■ We will develop team approaches through regional
contracts and alliances to engage with and understand the
needs of our customers
■ We will seek to engage teams meaningfully in
accordance with BS11000 where appropriate
■ We will seek opportunities, such as use of NEC contract
forms, to develop joint teams focused on value and delivery
Everyo
Home S
Every D
A customer
focused
organisation
Investing in
our people
■ We will take proper account of behavioural competence and
encourage joint teams with mutual objectives
■ We will welcome innovative ideas of resource utilisation that
impart understanding between suppliers and project teams
■ We will evaluate safety culture as part of o
incorporate meaningful safety data into perfo
■ We will continue to make use of external expertise to
complement our own commercial resources, engage
professionally with the supply market, and develop our people
and processes.
■ We will seek means of rewarding step cha
safety and encourage safety improvements
■ We will encourage direct employment of k
■ We will develop the use of our assurance
Contractor Licences
Supply Chain Strategy
Network Rail Infrastructure Projects
roposals that demonstrate
value
to future proposals that
with the provision of assets.
h our drive for innovation and
le
cture
■ We will seek to eliminate needless bureaucracy and time around
repeat tendering and post contract claims
■ We will engage with the supply chain to understand the scale
and complexity of this significant challenge
Reducing
public
subsidy
one
Safe
Day
■ We will focus on contract pricing techniques that maximise value –
making use of economies of scale, standardised design, and modular
build wherever possible
■ We will package works to maximise project delivery and
minimise repetitive tendering
The biggest
investment
since the
Victorian
era
A
technology
enabled
future
A railway fit
for the
future
our supplier selection and will
ormance metrics
hange improvements in behavioural
through design
key site staff
■ We will seek means to incentivise research and development
within the industry
■ We will provide a listening environment for development and
implementation of innovation to technology and process
■ We will develop our assessment tools to ensure sustainable
proposals – building on the current 5% sustainability criterion in our
tender evaluation model, putting value on demonstrable efforts such
as BS14001
■ We will seek means of incentivising meaningful improvements to
our sustainability position; as a starting point we will seek
compliance with, and support of, our sustainability pledge, shown in
Annexe 1
■ We will build on our membership with Business In The
Community (BITC) ensuring that with our supply chain we promote
responsible business practice, helping to transform communities by
tackling key social and environmental issues, ensuring a
sustainable future for all
■ We will be expecting our supply partners fully to embrace the
recent Social Value Act
process in granting Principal
May 2013
Page 13
6. Contracting Strategies
■ Our Strategic Principles form a framework for the business units within IP to approach their
individual contracting strategies with a sensible level of consistency. They also provide a
basis for the supply market to understand our drivers and our targets and allow it to work
with us to deliver a world class railway fit for the 21st Century.
■ In IP’s devolved organisation structure, there is always a level of balance in terms of satisfying
local and national considerations. There are advantages to each approach and we recognise
the importance of understanding the nature of each sourcing project in order to assess
the best means of engagement.
Balancing Local & National Considerations
Use of local
suppliers / labour
National sharing of
best practice
Greater opportunity
For investment
Local knowledge
Local
Proximity to customer
Project specific needs
Contracts to suit
project portfolio
Supply Chain Strategy
Network Rail Infrastructure Projects
National
Consistency
Economies of scale
Opportunity to smooth
critical resource
May 2013
Page 14
■ Shown below are some details of a range of projects and categories where a variety of
methods will be, or have been, used to engage the supply market. In this section a few will
be dealt with in more detail.
Contract / Scheme
Strategy Type
Status
Signalling Frameworks
National framework
Awarded
ETCS Frameworks
National framework
Awarded
Track – High Output
National framework
Procurement
Track – S&C
National framework
Procurement
Level Crossing Frameworks
National framework
Procurement
Professional Services Frameworks
National framework
Awarded
Track – Plain Line
Nationally let, regionally
managed framework
Procurement
National Electrification Framework
Nationally let, regionally
managed framework
Procurement
Buildings & Civils works
Regionally let and managed
frameworks
Procurement
Enhancement & multidisciplinary works
Regionally let and managed
frameworks
Procurement
Great Western Electrification
Programme Alliance
Awarded (part)
Stafford Area Improvement
Programme Alliance
Awarded
EGIP
Programme Alliance
Procurement
ECML PSU/TPE
Programme Alliance
Procurement
Northern Hub
Programme Alliance
Procurement
West Coast Power Supply Upgrade
Project specific contract
Awarded
Thameslink
Project specific contracts
Awarded
Crossrail
Project specific contracts
Awarded (part)
Reading
Project specific contracts
Awarded
North West Electrification
Project specific contracts
Awarded
■ An effective balance can be struck between local and national considerations in different
ways depending on the nature of the contracts envisaged. A few examples are explored where
different levels of local involvement have been utilised to work toward the best solution.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 15
Professional Services Frameworks
● National framework agreements that contain pre-agreed
rates for design and professional services
● Provide the opportunity for our Tier 1 contractors and
local teams to form longer term working relationships
● Worth approximately £300 million over Control Period 5
● Managed by centre providing the opportunity to measure
performance and value with national oversight and the
ability to share this information with local teams
● Frameworks due for re-tender before the end of Control
Period 5
National Electrification
● National Electrification is a collection of regional
electrification projects with an expected value of £2 billion
over Control Period 5
● Approach is to retain regional ownership and management
of frameworks but with a single, centre led, market
approach, thereby enabling partnerships to form in the
supply base and taking into account critical resources and
individual supplier capacity
● Initial conference has been held for interested parties and a
second conference is planned once the Pre-Qualification
Questionnaire has been completed later this year.
National Level Crossing Renewals Framework
● Programme is worth ca. £255 million over Control Period 5
● Frameworks now let with 4 suppliers
● Contracts will be let within frameworks on a design &
build basis, encouraging innovative design and
implementation
● Workbank will be allocated initially on a geographical
basis and although individual projects will be run on a
regional basis, performance will be measured nationally
allowing future work allocation to be regulated
dependent on levels of performance in respect of:
–
–
–
–
Safety
Cost
Delivery
Approach to long-term reliability
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 16
■ We intend to maximise the use of framework agreements over Control Period 5, this will
help us achieve our targets by working closer and more consistently with fewer suppliers.
The benefits of this approach are varied but include:
Allowing our suppliers to plan more efficiently through giving greater visibility of workbank
Enabling us to smooth the need for critical resource
Helping us to drive the right behaviours over time
Supporting investment in research and development and innovation by giving greater
certainty of workload
● Increasing the familiarity of our supply market with:
●
●
●
●
– The railway
– Our corporate and Infrastructure Projects goals
– Our organisation – helping them to become partners, not just suppliers
■ Greater detail of the tactical implementation of these strategic themes can be found in each
business unit’s individual contracting strategy. Key contacts for each of these business units
can be found in Section 9 of this document.
■ A fundamental difference between this and previous strategies is that we intend to procure the
bulk of Control Period 5 delivery before the end of Control Period 4. This will enable us to
avoid the traditional hiatus between Control Periods and commence delivery at the earliest
opportunity.
■ It is worth noting the increased focus on alliances and collaborative agreements for major
programmes of work. IP were accredited with BS11000 for a range of projects in 2012 but we
are now actively seeking to better our achievements and become a truly collaborative client
organisation. We will achieve this through a process of continuous development for the major
elements of a collaborative working relationship, for example:
● People, skills and behaviours
● Processes, procedures and forms of contract that are fit for purpose
● Dissemination and adoption of best practice to and from sources such as:
– Other client organisations
– Industry leaders
● Incorporation of more behavioural elements into tender evaluations
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 17
7. Highlights of individual Regional and Programme
Strategies
Signalling
■ Use of Signalling Framework with declining SEU
cost curve
■ Increasing use of collaboration and joint teams to
deliver packages of work
■ Introduction of new technology e.g. Modular
Signalling, ETCS
Track
■ Control Period 5 challenge to reduce unit costs by
ca. 20%
■ Separate regimes for High-Output (ca. £85 million
p.a), Plain Line (ca. £110 million p.a), and S&C
(ca. £80 million p.a)
■ Increasing use of delivery alliances
Thameslink
■ 4 distinct work packages to accommodate
differing timescales and the various internal and
external drivers
■ Forming collaborative relationships capable of
being BS11000 accredited
■ Use of existing competitively procured
frameworks to select contractors
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 18
Central
■ 80% of the expenditure is represented by 4% of
the schemes
■ 4 major Electrification schemes make up 32% of
the total work bank
■ Intent to award Regional framework contracts in
December 2013
Scotland & North East
■ Use of BS 11000 as enabler of cultural and
behavioural change
■ Increasing use of Programme Alliances e.g.
EGIP, Step Up and ECML Connectivity
■ Development of Co-located Engineering
Integration to support working relationships
Southern
■ Establishment of 4 route aligned framework
entities to support the bulk of delivery
■ Commitment to competitively tender 10% of the
Buildings & Civils, and Enhancements workbank
to demonstrate value
■ Introduction of NEC3 suite of contracts to facilitate
collaborative relationships aiming for BS11000
Western & Wales
■ Intent to award design frameworks before the
end of Control Period 4 and construction
frameworks ca. 6 months into Control Period 5
■ Development of local design frameworks to
complement national arrangements
■ Focus on programme not project e.g. programme
long efficiency curves and incentivisation
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 19
8. Engagement Strategies
■ We have put an increasing effort into engaging meaningfully with our supply chain and
intend to continue developing its usefulness through Control Period 5. The feedback received
so far indicates that our overall approach is being received positively.
■ Supplier Survey - A clear measure of the degree of success in our engagement with our
supply chain is reflected in the 2012 IPSOS Survey results. Satisfaction has continued to
improve with the proportions who are dissatisfied now being below the benchmark target of
15%.
Figure 8.1
IPSOS MORI Satisfaction results
■ Key areas of improvement identified within the 2012 survey were:
● Suppliers are supportive of the direction of travel, reporting the highest level of
advocacy seen since the survey began; Key Suppliers are notably more positive than
before.
● For the first time more suppliers say Network Rail is easier to work with than say it is more
difficult to work with.
● Almost four in five think NR has improved the way it collaborates with them in the last
twelve months.
■ Conference Feedback – From the various conferences that we hold with our supply chain we
have received positive feedback regarding our improved level of engagement. The key
themes emerging from these have been endorsement of our collaborative working
approach and support for our drive to embed sustainability issues within our procurement
and delivery processes.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 20
■ Given the positive response received so far we intend maintaining and developing our
engagement regime as follows:
Industry
Associations
■ A key part of our supplier engagement programme is regular dialogue
with a range of rail industry trade associations, principally, RIA, CECA,
and RICA each of which will also have some form of dialogue directly
with the ORR.
Conferences and
Forums
■ Supplier conferences with national, asset specific and regional focus will
continue to be held and are programmed. These have been
instrumental in engaging with the broader supply base, articulating the
efficiency challenges that the industry faces and highlighting the key
issues that our contracting strategies need to address.
■ Tier 2 Engagement – in addition to our established annual conferences
with our Tier 1 suppliers we have now commenced a programme of
conferences with our Tier 2 supply chain partners recognising the
pivotal role that these smaller organisations play in the successful
delivery of infrastructure works. A key goal is to facilitate closer T1 / T2
relationships.
■ We will continue to work extensively and closely with our key
infrastructure suppliers via the Commercial Directors Forum. This has
so far informed our approach in key areas of process improvement. This
has driven change and innovation in areas such as:
● The implementation of our Fair Payment Charter.
● The removal of retention for all new infrastructure contracts from its
previous default level of 3%.
● Agreement of a policy on the use of Parent Company Guarantees.
● The incorporation of Sustainability issues within a revised tender
evaluation process.
Pipeline
■ We will continue to publish a procurement pipeline schedule on our
external website to make the supply chain aware of forthcoming tender
opportunities. This approach was developed earlier in CP4 and has
been further refined over time to provide a consistent and coherent
source of information to prospective bidders and the wider supply chain.
This is available at http://www.networkrail.co.uk/aspx/9434.aspx.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 21
Press conferences
■ For the remainder of CP4 and as we enter CP5 we will hold formal
round table press briefings to ensure that a consistent account is given
of our priorities and intentions.
Supplier Account
Management
■ In order to deal with specific issues and maintain close relationships
with key suppliers we will continue to run a Supplier Account
Management (SAM) process. We will review delivery performance,
future workstreams, safety performance and any topical issues at a
senior level – making use of performance data from PRISM and hands
on knowledge from regional and IP centre directors.
Supplier Surveys
■ We will continue to undertake the Supplier Survey and act on the results
as shown at the start of this section.
Performance
Measurement and
feedback
■ PRISM has proved a very visible means of measuring a blend of
performance measures. As we enter CP5 we intend making it
increasingly visible as a dashboard that measures IP and supply partner
performance to drive better collaboration and resulting performance.
■ Currently our assurance process audits contractors and issues Principal
Contractor Licences when appropriate – we intend further integrating
behavioural safety and performance measures to provide a more
meaningful understanding of supplier capability.
■ We will increasingly link work bank allocation to performance. As an
example the National Level Crossing work bank allocations to the
framework partners will be allocated according to performance around
criteria of safety, value, innovation and long term reliability.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 22
Collaborative
Working
■ In order to facilitate value, safety and prompt delivery of projects we
recognise that collaboration will continue to be a fundamental enabler.
We will make further use of BS11000 as the strategic framework for
collaborative working within IP. Our industry leadership in this area has
already seen a number of our key partners either certified to, or working
towards, certification as a means of supporting the cultural and
behavioural change necessary to embed collaboration.
■ New processes to support supply side alliancing – recognising
international best practice we have developed and implemented a range
of measures to support alliancing with our supply chain on designated
projects. We will develop further projects such as the Stafford Area
Improvements Programme where we have developed a new form of
alliancing contract, incorporated collaborative capability as a
fundamental part of the procurement process. This approach has so far
been received very well and will form a key element of a significant
proportion of our CP5 programmes.
Supplier selection
■ Increasingly, work programmes will be procured via long term
frameworks – negating the need for repetitive supplier evaluation and
tendering events.
■ A regime of tendering a portion of relatively minor works will be
maintained in order that an up to date knowledge of market pricing is
kept current and that new entrants to our market are not precluded.
■ Where significant tenders are sought our default position will be to use
processes implied by the EU Utilities Directive, however we will
continue to make use of the Link Up supplier qualification system to
ensure we have a current understanding of suppliers available by
category.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 23
9. Contacts
National Supply Chain
■ Finance & Commercial Director
-
David McLoughlin ([email protected])
■ National Supply Chain Director
-
Guy Stratford ([email protected])
■ Events & Communications Manager
-
Ebony Soltani ([email protected])
Central Region
■ Finance & Commercial Director
-
Rob Offord ([email protected])
■ Programme Procurement Manager
-
Andrew Williams ([email protected])
Scotland & North East Region
■ Commercial Director
-
Hugh O’Connor ([email protected])
■ Programme Procurement Manager
-
Paul Wilkinson ([email protected])
Southern Region
■ Finance & Commercial Director
-
Philip Bennett ([email protected])
■ Programme Procurement Manager
-
Dawn Hart ([email protected])
Western & Wales Region
■ Finance & Commercial Director
-
Andrew Haynes ([email protected])
■ Programme Procurement Manager
-
Kevin Tozer ([email protected])
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 24
Signalling
■ Finance & Commercial Director
-
■ Programme Procurement Manager
-
David Parkhouse ([email protected])
Harj Singh ([email protected])
Track
■ Commercial Director
-
Eoin O’Neill ([email protected])
■ Programme Procurement Manager
-
Stephen Dyes ([email protected])
Thameslink
■ Head of Project & Commercial Services -
Rob Carr ([email protected])
■ Head of Commercial
Lee Baldwin ([email protected])
-
FTN/GSM-R
■ Finance & Commercial Director
-
David Parkhouse ([email protected])
Safety & Sustainable Development
■ Director, Safety & SD
-
Roan Willmore ([email protected])
Licensing & Assurance
■ Assurance Manager (Licensing)
Supply Chain Strategy
Network Rail Infrastructure Projects
-
Gillian Scott ([email protected])
May 2013
Page 25
10. Tender / Contract Schedules
10.1 Central
Contract
Award Date
Length
(est.)
(est.)
CP5 Value
(est.)
LNW and East
Mids
Programmes of
Work
Programme Tenders to cover:
Property, E&P, Earthworks and
Structures. Will be split into
three sub-regions of LNW North,
Q2-13/14
LNW South and East Midlands.
Will utilise a programme contract
approach as developed on the
footbridges pilot.
Q4-13/14
5 years
700m
LNW and East
Mids Mid-Size
Projects
Will cover: Railway engineering,
Buildings, Civils and MultiDisciplinary works. Will be split
Q2-13/14
into three sub-regions of LNW
North, LNW South and East
Midlands. Contract format tbc
Q4-13/14
5 years
900m
Supply
Category
Contract Approach
Tender
Date (est.)
REGIONAL
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 26
10.2 Scotland & North East
Contract Approach
Tender
Date
(est.)
Award
Date
(est.)
Contract
Length
(est.)
CP5 Value
(est.)
Buildings and
Civils Works (low
value)
Region wide replacement Framework to
B&C DP. The framework will include a
cost book and KRA's to measure
performance of commission contracts
against a pre-determined workbank (by
geography or work type). The framework
will also facilitate competitive mini
tenders within the framework community
and STA's for emergency/urgent works.
Q3-13/14
Q4-13/14
5 Years
760m
Multi-disciplinary
Region wide replacement Framework to
MAFA. The 'nil value' framework will
facilitate competitive mini tenders within
the framework community and STA's for
urgent works.
Q3-13/14
Q4-13/14
5 Years
580m
Electrification
Individual call-off contracts let under
regionally managed centrally procured
Electrification framework
Q2-14/15
Q4-14/15
5 Years
incl in 580m
above
Multi-disciplinary
(Electrification)
STEP UP Programme Alliance to deliver
ECML Power Supply upgrade and TransQ3-12/13
pennine electrification and associated
branches and enhancements
Q2-13/14
6 Years
809m
Multi-disciplinary
West and South Yorkshire Works.
Implementation works packages as part
of client participant works into Step Up
Alliance
Q4-13/14
Q2-14/15
5 Years
224m
Multi-disciplinary
ECML Connectivity Programme Alliance
Q2-13/14
Q4-13/14
5 Years
370m
Level crossing
ECML LX Crossing closure programme committed framework for implementation
works
Q1-14/15
Q2-14/15
5 Years
70m
Buildings
Competitively tendered Building works
Various
Various
5 Years
subject to
funding
Multi-disciplinary
Borders Railway - Target cost with
collaborative agreement under closed
Framework Agreement.
n/a
Q3-12/13
3 Years
150m
Multi-disciplinary
EGIP - Programme alliance for OHL and
Civils
Q1-13/14
Q3-13/14
3 Years
452m
Supply
Category
REGIONAL
LNE
SCOTLAND
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 27
10.3 Southern
Supply
Category
Major Projects
with complex
interfaces
90% of all other
works (except
E&P)
10% of all other
works (except
E&P)
Electrification &
Plant
Contract Approach
Collaborative/alliance
based project specific
contract strategies
established on project
by project basis and
competitively tendered
Waterloo Major
Redevelopment
Multidisciplinary Route based Frameworks –
1 per Route. D&B relationships to maximise
ECI, use of NEC3 contract form.
Competitive tendering
Tender
Date
(est.)
Award
Date
(est.)
Contract
CP5 Value
Length
(est.)
(est.)
Q1-14/15
Q3-14/15
4 years
275m
Q1-13/14
Q4-13/14
5 years
1,044m
Various
Various
Various
116m
Q4-13/14
5 years
518m
Hub and Spoke discipline approach utilising
Regional Frameworks for each discipline with
Q2-13/14
NR to supply key materials via Materials
Frameworks
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 28
10.4 Western & Wales
Contract Approach
Tender
Date (est.)
Contract
Award Date
Length
(est.)
(est.)
CP5 Value
(est.)
Renewals
(Buildings,
structures and
geotech)
Framework arrangement to replace
BCDP. The framework will be
tendered on early year’s workbank
and incorporate efficiency curves.
The framework will also provide
option for mini competitions for
some planned and
emergency/urgent works.
Q2-13/14
Q4-13/14
5 Years
277m
Multi-disciplinary
Western access to London
Heathrow Airport. Final strategy to
be determined but likely to be the
Q1-16/17
form of an alliance. Programme
indicative only and subject to agreed
funding drawdown with DfT.
Q4-16/17
4 Years
160m
Multi-disciplinary
Bristol Area Enhancement works.
Bespoke final strategy to be
determined dependant upon other
schemes within the area.
Q2-15/16
Q4-16/17
3 Years
209m
Multi-disciplinary
Oxford Corridor Capacity
Improvements. Overall final strategy
Q2-15/16
to be determined dependant upon
other schemes within the area.
Q3-15/16
2 Years
85m
Multi-disciplinary
W12 Gauge Clearance - likely to be
competitively tendered
Q2-14/15
Q3-14/15
2 Years
38m
Multi-disciplinary
Capability, Capacity and Clearance
Works
tba
tba
tba
180m
Supply
Category
Western
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 29
Wales
Renewals
(Buildings,
structures and
geotech)
Framework arrangement to replace
BCDP. The framework will be
tendered on early year’s workbank
and incorporate efficiency curves.
The framework will also provide
option for mini competitions for
some planned and
emergency/urgent works.
Q2-13/14
Q4-13/14
5 Years
214m
Multi-disciplinary
Welsh Enhancements Partnership.
Single supplier arrangement for third
Q2-13/14
party enhancement schemes across
North and South Wales.
Q4-13/14
5 Years
160m
Multi-disciplinary
Valley Lines Electrification competitively tendered
Q1-14/15
5 Years
349m
Supply Chain Strategy
Network Rail Infrastructure Projects
Q4-13/14
May 2013
Page 30
10.5 Signalling
Supply
Category
Contract Approach
Tender
Date (est.)
Contract
Award Date
Length
(est.)
(est.)
CP5 Value
(est.)
Signalling
National Signalling Framework
(MasReF); Based on NR9 and
NR12 S&T terms. The
Framework is split by supplier
within geographical boundaries
N/a
Q1-12/13
7 Years
3,200m
Signalling
Signalling Control Re-Tender:
Establish a rate book covering
the life of the asset. Potential
delivery of 8,000 SEUs
nationally over CP5, aligned to
the ROCs.
Q2-13/14
Q3-13/14
5 Years
49m
Signalling
ETCS Framework: contracting
for the development, design and
N/A
implementation of the ETCS
schemes over the life of the
programme.
Q1-12/13
6 Years
250m
Signalling
Traffic Management: Framework
awarded for undertaking
development in August 2012
following a competitive tendering
exercise to Thales, Hitachi and N/A
SSL and each are under
contract via a 3yr plus 5
bespoke framework and
Statements of Work (SoW).
Q2-12/13
4 Years
50m
Signalling
Delivery of Traffic Management
for 14 ROCs nationally, based
on NR13c.3 potential contracts
will be awarded based on a
Target based contract for 3
years plus option of 5 year
extension.
Q1-13/14
Q2-13/14
4 Years
500m
Signalling
(SP&C)
Level Crossing Framework:
National 7 year framework,
based on six LXEUs per annum.
Q1-13/14
Framework is awarded on a
regional basis with potential for
ECI and Target Cost Pricing.
Q1-13/14
5 Years
268m
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 31
Telecomms
(SP&C)
Telecomms framework
Nationally based Framework
Agreement awarded February
N/A
2012, to 3 suppliers, for an initial
3 year term with options to
extend for a further 2 years
Q4-11/12
5 Years
233m
Signalling
(SP&C)
Type C Signalling Minor Works
to be re-tendered 2014.
Extension sought for 1 year in
June 2013 and then strategy to
be developed at Regional level.
TBA
TBA
327m
Supply Chain Strategy
Network Rail Infrastructure Projects
14/15
May 2013
Page 32
10.6 Track
Supply
Category
Conventional Plain Line Track
Works
Contract Approach
Lotting strategy across 8 areas.
Resulting in minimum of 3 and
maximum of 8 contracts.
Remeasurable contract model with
volume commitment at 75% of
forecast
Tender
Date (est.)
Contract
Award Date
Length
(est.)
(est.)
CP5 Value
(est.)
Q2-13/14
Q2-14/15
5 Years
385m
Q2-13/14
Q2-14/15
5 Years
450m
Q3-13/14
Q1-14/15
5 Years
505m
Contract length 5+1+1+1+1+1
Switch & Crossing
Track Works and
Design
Alliance agreement based in a
target cost contract model
recommended as the best route to
deliver
1) Deliver the revised asset
management approach
2) Reach European cost
benchmarks and ORR CP5
business plan targets
3) Reduce interface losses
Two lots covering North and South
Contract length 5+5
Conventional High Output Track
works
ITT option being explored in lieu of
contract extension with incumbent.
Contract strategy to be developed
for Gateway 2 on 6 August 2013
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 33
Appendix 1 - Sustainable Procurement Principles
Sustainable Development
Sustainable development is at the heart of our rail transport solutions and aims to deliver value for
money without compromising the wellbeing of our people, the environment, and the diverse
communities we serve
Supply Chain Commitment
To achieve these goals we need a responsible and committed supply chain capable of delivering the
following sustainable procurement principles:
Health, Safety & Wellbeing:
Work with us to protect and improve the health, safety and wellbeing of staff.
Sustainable Employment:
Advertise employment and training opportunities to give local communities an equal opportunity to work
on Network Rail sites.
Diverse and Inclusive Supply Chain:
Provide local suppliers and sub-contractors an equal opportunity to compete for appropriate contracts.
Ethics and Labour Standards:
Provide a safe, respectful and positive culture throughout the supply chain.
Access:
Encourage design in refurbishment and construction that provides good access and inclusion for all
members of the public.
Communities:
Contribute positively to the social and economic wellbeing of our communities. Minimise disruption,
nuisance and environmental damage on our sites.
Heritage:
Work with us in creative ways to preserve or re-use railway heritage assets.
Energy and Carbon:
Reduce operational CO2 emissions, improve the energy efficiency of products and services. Promote
energy-efficient transportation.
Network Resilience and Adaptation to Climate Change:
Design and supply solutions that function reliably within projected changes in climate and weather
conditions.
Waste:
Support our aims of zero waste to landfill and increased use of sustainable and recycled materials.
Water:
Reduce consumption and reliance upon potable supplies in production and operations.
Bio-diversity and Ecology:
Protect ecology and promote a railway environment rich in flora and fauna.
Pollution:
Minimise noise and harmful emissions to land, air and water.
Supply Chain Strategy
Network Rail Infrastructure Projects
May 2013
Page 34
Network Rail Infrastructure Projects
Milton Keynes
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Elder Gate, Milton Keynes, MK9 1EN
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www.networkrail.co.uk