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transcript
ECI - Panacea or Pipedream?
25th November 2015
Introduction
2
Presenters• Steve Rowsell CIHT
• Angus Walker Bircham Dyson Bell
• Shaun Pidcock TfL
• Mark Borland Surrey County Council
• Geoff Fawkes Tarmac
ECI - Panacea or Pipedream?
Steve Rowsell
Early Contractor Involvement (ECI)
STEVE ROWSELLDirector, Rowsell Wright Limited
Question§ Who holds the monopoly of wisdom
regards the development of best solutions and delivery methods?Ø Client?Ø Designer?Ø Contractor?Ø Stakeholders?Ø Others in the supply chain?
The Old Approach§ Separate design and construction contracts§ 10 years or more to deliver projects§ Awarded on lowest price rather than best value§ Poor buildability, little innovation§ Confrontational relationships§ 40% average cost overruns, most delivered late§ Adversarial claims culture – legal costs
Drivers for ChangeDrivers for change have included:§ NAO Reports into cost overruns§ Latham / Egan / Wolstenholme Reports§ OGC / Cabinet Office / IUK advice§ NAO – Modernising Construction§ HMT Infrastructure Routemap§ Various academic research
New ApproachKey principles:§ Early creation of integrated teams. § Collaborative and longer-term relationships. § Fair allocation of risk.§ Incentivised delivery. § Selection of suppliers based on best value.§ Measure performance/ continuous improvement.
ECI as a principle§ The principle of ECI is applied to different
forms of contract by different clients.§ Highways England / Crossrail / Thames
Tideway Tunnels / HS2 / TfL - London Underground / Network Rail / Water Companies / Northern Ireland Roads Service / Welsh Government
ECI Stages
§ ECI Stage 1 – develop design to allow target price for Phase 2 to be agreed.
§ Transition from Stage 1 to Stage 2 subject to performance and affordable target price – contingency plan.
§ Stage 2 – Complete detailed design and construction.
Benefits of ECI§ More scope for innovation and buildability § Skills of the supply chain input earlier§ Better skills and resource planning § Improved H&S planning & risk management§ Earlier relationships with stakeholders§ Better cost estimating & budgeting§ Projects delivered quicker
Challenges of ECI approach§ Design maturity§ Selecting and building the team § Developing the target price§ Risk allocation and pricing§ Moving from Stage 1 to Stage 2§ Cost controls, checks and balances§ Appropriate incentivisation
Selecting the Supplier§ Identify the best team who can develop the
optimal solution and deliver it efficiently.
§ The team needs to demonstrate the right culture and behaviours.
§ Some commercial elements established in competition.
§ Best value not lowest price.
Commercial Controls§ Stage 1 price tendered.§ NEC3 fees and percentages tendered.§ People rates tendered.§ Benchmarked prices.§ NEC3 controls.§ Open book accounting.§ Incentivisation.
“ECI increases innovation which was being lost on D&B contracts; and facilitates value management and value engineering which can result in major cost and time savings”.
“I recommend continued use of ECI as the principal form of procurement”.
Quotes – Nichols Report
ECI - Panacea or Pipedream?
Angus Walker
Merits of ECI in the DCO processAngus Walker
Highways UK, 25 November 2015
WHAT IS ‘THE DCO PROCESS’?
DCO = Development Consent OrderA permission under the Planning Act 2008The Act that brought you:
Hinkley Point C nuclear power stationThames Tideway TunnelHeysham to M6 Link RoadA556 improvement
The Act that will bring you:Some more nuclear power stationsA new runwayA14 improvementsThe Lower Thames Crossing
The Act that may bring you:Crossrail 2
WHY LISTEN TO ME?
A160 - A180 Port of Immingham Improvement Highways AgencyA30 Temple to Higher Carblake Improvement Cornwall CouncilA556 Knutsford to Bowdon Scheme Highways AgencyHeysham to M6 Link Road Lancashire CCM1 Junction 10a Grade Separation - Luton Luton Borough CouncilMorpeth Northern Bypass Northumberland CCNorwich Northern Distributor Road (NDR) Norfolk County CouncilWoodside Link Houghton Regis Bedfordshire Central Beds Council
IN A NUTSHELL
Pre-application consultationComplex applicationSix-month examinationSix-month recommendation/decision
MERITS OF ECI
Although a DCO can be flexible…Value engineering inevitably leads to changesInspectors often press for more detail than the developer wants
DEMERITS OF ECI
Depends on timingAppointment during consent process can be disruptiveBetter before or after
CONCLUSION
Just as a DCO is granted if the benefits outweigh the adverse impacts… on balance, the merits of ECI outweigh the demerits
ECI - Panacea or Pipedream?
Shaun Pidcock
Hammersmith Flyover
Shaun PidcockHead of Projects and ProgrammesTransport for London
Structures & Tunnels Investment Programme – 8 Projects c.£250m
History of the Flyover
Construction of the bridge 1959-1962
Designed by G. Maunsell and Palmers
Built by Marples Ridgeway and Partners
Cost approximately £1.2M
Elevated length 16 spans - 622.7 metres
Length with approach ramps is 862.9metres
Dual 2 lane carriageways
Overall width 18.6 metres
History of the Flyover
Pre-cast segmental construction
Construction of the Flyover
Each tendon group continuous over 2 spans (3 piers)
Tendons anchored in deck slab adjacent to piers
Schematic diagram of post – tensioning tendon
arrangementTendons encased in grout boxes ‘external’ to box section
Acoustic Monitoring
Graphical representation of output from the acoustic monitoring system
Inspection & FindingsSurvey findings – Cable Failure
Corroded Bearings
The Old Delivery Approach
TfL’s traditional major projects delivery model used was
Procure-Design-Procure-Build. ØNo contractor input into design
ØNo economies of scaleØIncreased programme
ØInefficient
We wanted to move away from this to a new delivery model.
New Delivery Approach
TfL’s new delivery model:
•Programme based
•Deliver projects through integrated, collaborative project teams
•Benefit from early contractor involvement (ECI)
•Delivered through a competitive procurement process resulting
in the award of a Framework Agreement for ECI and
Construction
ECI Stage Objectives
• Integrated Project Team’s - designer, a contractor and TfL
• Designing ‘buildability’
• Benefit from shared experiences + new techniques and
opportunities
• Improved communications & decision making
• Reduced resource requirement
Setting target cost
• Programme Management Team develop benchmarked cost plan for the scheme.
• Integrated delivery team prepares build price
• Price continuously refined as design progresses
• All major elements of design sized - final open book submission
• Review of proposed target
• Target cost agreed, build instruction granted.
Designer Novation – Design & Build
1. Contract for delivery of the works awarded at the outset.
2. Designer novated over to the contractor to take responsibility for build and detailed design.
3. Main works begin, final detailed design still to be finalised
4. Works on site.
Contracts
Stage 1 Contracts:
∗ NEC3 Professional Services Contract Option E Time Based
Contract
Stage 2 Contracts:
TfL is considered a number of options:
1. NEC3 ECC Option A Lump Sum with Activity Schedule
2. NEC3 ECC Option C Target Cost with Activity Schedule
3. NEC3 ECC Option D Target Cost with Bill of Quantities
Framework agreement Structure and operation
Work Package Call-off contract award
ECI & Construction Framework Agreement
Call-Off Contract: Stage 1•NEC 3 PSC Option E: ECI•NEC 3 Short Contract: Advanced works (if any)•NEC 3 ECC Option A, B, C or D as instructed by TfL: Target Price or Lump Sum proposal from contractor for consideration by TfL
Call-Off Contract: Stage 2•Novation of design contract to Contractor•Completion of detailed design•Delivery of works
Mini-competition between Contractors awarded a Framework Agreement for
the specific work package
PriceAcceptedbyTfL PricenotacceptedbyTfL
• Predicted ‘failure’ August 2014• ECI Phase Started April 2013• Construction Start end October 2013• 6 Month ECI Phase Needed to Establish:
• Stakeholder Buy In• Construction Methodology• Flyover Closures• Risk Profile• Target Price• TfL Business Approval
• Construction complete August 2015
Hammersmith Timescales
Successful ECI PhaseWorking together
Working and cooperating with local authorities
Keeping London Moving –Roads, Buses and Underground affected
Early contractor Involvement (ECI):
Early involvement and co-location of Costain with Transport for London and Ramboll & Parsons Brinkerhoff
Successful use of BIM
InnovationUse of Mock Up at Sipson Road – For Pouring Concrete
Successful Well Managed Delivery
Hammersmith FlyoverA Successful Project for TfL
ECI - Panacea or Pipedream?
Mark Borland
Creating a culture of Effective ECI
} Early Contractor Involvement (ECI) as a term is continually over used by
Clients and Contractors, however, good intentions do not always create
effective impact
} Effective ECI (rather than token ECI) takes commitment, hard work, due
diligence and creativity and thus needs to be earned rather than given
} Due to the level of commitment its not suitable for all projects and should
be deployed strategically rather than automatically
Effective ECI requires six core components
q Integration- working with all supply chain partners from Main Contractor to Specialist, recognise the value of all partners
q Embedded in project- Enable time and space for ECI to breath, can’t be rushed or seen as an “add on” to the overall process
q Clear Targets & Definition from what you want to achieve from ECI
� Improved Risk Management� Reduced cost through Value Engineering � Enhanced Construction Programme � Improved Quality & Design Benefits
Effective ECI requires six core components
qIncentivised – all parties need to see the benefit and reward of engaging in ECI process
qControlled – documents, decisions and actions need to be effectively managed and assessed to remove “hot decisions”
qAdded Value to business not just project – ensuring innovation is shared and embedded in future projects
} Effective ECI has been a panacea to Surrey Highways programme delivering £55m saving over last
5 years through:
ü £20m savings in construction of new Walton Bridge with Costain’s
ü £20m savings over 5 years in road maintenance with Kier
ü £10m in delivery of street lighting PFI with Skanska
ü £5m across various projects
Questions
ECI - Panacea or Pipedream?
Geoff Fawkes
HEYSHAM COLLABORATIVE PARTNERSHIP WITH COSTAIN
WORKING TOGETHER PRESENTATION
ImprovedServiceLevels
SERVICE LEVEL AGREEMENT STRUCTURE
MEASURING PERFORMANCE
• Using a project created dashboard compassing KPI’s that drive service levels across the BU’s
MEASURING PERFORMANCE
Tonnes CO2e Project to Date Forecast VE Design Initial Design
AGGREGATES 2,441 4,059 6,054
ASPHALT 2,246 7,180 10,197
CONCRETE 5,577 4,584 7,014
CBGM 1,279 2,496
GRAND TOTAL 11,542 18,248 23,265
OUR OBJECTIVES
BS11000 VALUE CREATION HIGHLIGHTS
• Health and Safety – All Hauliers Inducted, Sharing SHE Best Practice
• Quality – 100% Product Compliance
• Carbon Footprint – 25% reduction
• Part Loads - < 2% of concrete spend on part loads £2m total spend to date
• Shared Technician Resources – Concrete Testing and CBGM Testing
• Shared KPI Performance Data –– Improve Fleet management– Improve Costain Programme Reliability– Reducing Our Businesses Cost Base– Shared Community Initiatives– Drive Individual Business Performance – e.g. Forecasting and Communication
BS11000 NEXT STEPS
• Disseminate H2M6 PSSLA within Costain Highways Sector and Tarmac business
• Internal validation of value creation in Costain and Tarmac
• Staying together - Evaluation of relationship health
• Formulate exit plan for project
• Support Tarmac in BS11000 accreditation
ONE TEAM, ONE AIM, DELIVERING A GREAT PROJECT BY DOING THE RIGHT THINGS AT THE RIGHT TIME.
..... LEAVING A LASTING LEGACY
ECI - Panacea or Pipedream?
25th November 2015