London Underground (LU) is pressing ahead with the use of its Innovative Contractor Engagement (ICE) procurement model on two new schemes, NCE can reveal.
The pioneering procurement model is to be next used on the £55M project to link Bakerloo Line and Crossrail platforms at Paddington station before then being used on the £250M Holborn station upgrade.
Using the ICE model, LU assesses bids on the added value of their proposal, rather than on lowest cost. Bidders are also rewarded for ideas presented at tender stage even if their bid is unsuccessful.
The ICE method was first used on the complex Bank Station Upgrade contract, which was awarded this summer to Spanish contractor Dragados. Its solution, which centred around use of travellators to cut journey times through the station, boosted the scheme’s benefit to cost ratio from 2.4:1 to 3.5:1. It also cut the estimated final cost by almost 10% to £564M (NCE 5 September).
But while the model reaped big rewards for LU, losing bidders have complained about the huge cost of tendering. Bidding for the Bank job is understood to have cost each team more than £2M, The compensation from LU failed to match that amount.
As a result, contractors have questioned the use of ICE on the relatively small Bakerloo Line link. One major contractor has already told LU it will not be bidding.
But LU programme director for stations Miles Ashley said the Bakerloo Line link project’s complexity made it ideal for ICE.
LU invited expressions of interest for the job late last month.
It asks for a design and build consortium to develop and deliver a deep level tunnel around 100m long. LU has already taken the design to RIBA Stage E and it is now seeking to prequalify single companies or consortiums that can “bring innovative ideas forward to identify and deliver significant cost reductions and reduce risk”.
It adds that “this high profile project is to be carried out at one of the busiest stations on the network, in the vicinity of busy roads and through routes for traffic and significant heritage properties, whilst minimising disruption as far as practicable to passengers and neighbours”.
The tender notice posted in the Official Journal of the European Union (OJEU) does not state that it is an ICE project, but Ashley told NCE that the language of the notice makes it clear that it is.
LU has set a price range of between £30M and £55M for the job and wants expressions of interest by 25 November.
Meanwhile, Ashley said that the Holborn OJEU notice would be posted at “any moment” and that it too would be procured using the ICE methodology. LU had already alerted the industry that it was considering using ICE for the job.