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Crossrail: Coming up with the goods

Delivering a £15.9bn, nine year, civil works programme on time and on budget will demand a superbly efficient procurement and delivery strategy. Interim procurement and programme directors Steve Rowsell and Graham Plant say selecting the right partners will be crucial.

In a little over a year, Europe’s largest infrastructure project will begin in earnest with a multitude of contractors driving tunnel boring machines and other construction equipment under London. They will be working to designs from a multitude of consultants, all of which will be managed by a consortium of different contractors and consultants, in turn managed by another consortium of firms. As of today, we don’t know the names of any of these firms – but we soon will.

Click here for the programme delivery partners

From Christmas there will be a steady stream of announcements as key roles are filled and the line-up of firms lucky enough to be in on this major recession-busting project are confirmed. First to be announced will be the programme partner. The role is one of strategic programme management, or as Rowsell describes it, of "seamless integration with the client team". Fully incentivised with the same out-turn objectives as the client, the role demands the softer skills of project management such as "influence, engagement and persuasion".

Invitations to tender were issued in September and the bids are now in. A two-phase selection process now follows – first a shortlist will be drawn up, then a period of negotiation will begin. Because Crossrail is deemed a "utility", competitive dialogue is ruled out as it is barred under utility regulations. "But we may take the better elements," says Rowsell, adding that unlike "other" clients, Cross London Rail Links (CLRL) won’t be using it to get "free consulting". "Our process is a lot clearer in terms of what we want and as a result is very efficient. We’re hoping to appoint by the end of the year or at the latest in the first two weeks of January, which at three months is very quick when you consider others have taken 10 to 15 months," says Rowsell.

It may be quick, but it is nevertheless vital that the team gets the right partner, adds Plant. "One of the keys to success in this programme of projects is the chemistry between us as client organisation and our programme partner. It is particularly important as this is going to be an integrated team and one of the challenges we have in the early months is getting everyone aligned."

If the softer side of management is the domain of the programme partner then, says Rowsell, the "hard-nosed skills" associated with contracting – "albeit within a partnering approach" – are the domain of the project delivery partner (PDP), the next role to be announced. Focused on the day-to-day management of the core central tunnelled section, the PDP is arguably the biggest job on the project. "The PDP will manage the design process and administer the construction contracts and as such will need a strong commercial capability," says Plant. "We are giving the PDP a high degree of responsibility and accountability in design and construction." As a result it is expected the winning bidder will commit "significant resources" and people to the job. Bids are due in shortly on this package, with an award expected by March after a further two-stage process featuring another shortlist.

Here the parameters are nononsense – delivering within the £15.9bn out-turn price and opening in 2017. Annual interim targets will also be agreed between the parties, with the focus again on achieving milestones that will ensure the project is delivered on time, on budget, safely and to the required quality. The PDP will also be incentivised to retain key people, something Plant sees as fundamental to success. "When you look at successful projects the absolute key is the people involved. The top half dozen people will make or break this project which is why great care is being taken to get the right ones."

The final group busy tendering for work are the framework designers, with news on this expected in December. They will take on the work already done by the existing consultants (many, if not all, of which are tendering for more). Seven main work categories have been identified and CLRL is looking for a number of firms to work in each. "We’ve got 15 firms bidding and there could be up to 10 appointed," says Rowsell.

With 75% of the detailed design still to be done, the contracts are worth winning. But getting on to the framework is no guarantee of work, as the PDP will be responsible for doling out individual work packages – each of which will be competitively tendered. It is a quirk of Crossrail with its tight schedule, but the PDP will have the opportunity to have input into the selection of designers for major works. "These are going to be top companies and there is something fundamentally wrong if the PDP can’t work with them. But if they don’t perform we will be looking for the PDP to address the issue," says Rowsell.

Contractors will also be the responsibility of the PDP and because of this it is almost certain to be barred from bidding for construction work. "Clearly there would be an issue [with the PDP bidding for work] and this is something we would want to avoid," says Plant, making reference in particular to Metronet where much of the cost escalation and programme slippage stemmed from Metronet shareholders awarding work to themselves. "People have got to decide what camp they want to be in," he adds.

Aside from enabling works, CLRL is aiming to go to the market in mid- 2009 with main construction work due to start in 2010, firms being brought in using Rowsell’s bespoke optimised contractor involvement (OCI) method. A subtle twist on the "early contractor involvement" model pioneered by Rowsell in his former role as procurement director at the Highways Agency, OCI means contractors are brought in early enough to have input into buildability and value engineering, but late enough for a target price to be fairly firm.

CLRL will retain all design responsibility. "The judgement we still have to make is over timing," says Plant. "We don’t want them in so early that the design is not sufficiently evolved that it becomes too costly. One of the problems of design and build for major works is that each tenderer needs its own designer. And also by this stage we will have most of the usual major players working for us. "Equally we don’t want it too late for them to offer significant involvement. To my mind more needs to be done on logistics and also on off -site construction. Contractors have a role to play here."

The selection process will again be two-stage, and stage one will again be about getting to a shortlist, this time based on technical competence. From here shortlisted firms will be asked to work with the client and designer to see what the best approach would be. A target price will then form part of the final bid. Rowsell is conscious of the intellectual commitment at this stage, and admits the boundaries of confidentiality will not be set until the supply chain has been sounded out early next year. Firms may also be paid for their eff orts at this stage, but this too is still to be decided. There is also the possibility that work may be packaged up into frameworks to short-cut the tender process in a bid to meet chancellor Alistair Darling’s newly-stated desire to push forward major infrastructure work.

One thing is certain, however, and that is the OCI concept. It has been signed off by the Treasury and no one is contemplating taking the project back to Government now the funding is secured. Once a deal is signed, the contract will also be two-stage, with the first pre-construction part focused on the optimisation of proposals, with savings made here shared between contractor and client – provided they are delivered in the construction stage.

Plant is also keen to emphasise gain over pain. "Our feeling at the moment is that to create the right behaviours we need to put the emphasis on the potential gain and not pain. If the pain becomes too heavy, that’s when you start creating the wrong attitudes." The process is complex and will require commitment. But Rowsell is sure Crossrail won’t be another 2012 Olympics with the client having to settle for the only bidder: "It is a big programme of contracts to put out and we need nine or 10 contractors or consortiums to maintain competition. But I’m pretty confident this won’t be another Olympic Stadium." Not least because overseas firms are lining up to get involved. "We have had a lot of interest from Europe and the Far East. But these firms are likely to need UK-based partners who understand the planning and delivery environment in the UK."

Rowsell is also confident that when it comes to delivery, Crossrail will not be plagued by the cost escalation scourge. "It is a different approach. This is the first public sector project where the decision has been taken on the out-turn estimate – factoring in inflation, and construction inflation at that. And that out-turn price has been produced and tested very rigorously by us, by our initial programme manager Bechtel, by the Treasury’s Major Project Review Group and by Transport for London. "Unlike certain projects by certain clients where the cost estimate is a starter for 10, the whole culture here is about delivering within the estimate and getting the incentives in place to ensure everyone performs to achieve that outcome." Plant concurs: "Control of change will be key. Of course, it is invitable that there will be change, but we have to ensure that when there is, it is one, completely justified and two, we match it with a saving. "Douglas [CLRL chairman Douglas Oakervee] and I come from a school of delivering to what we say we will," adds Plant, referring to experiences in Hong Kong. "In this country there doesn’t always seem to have been the same desire. "You have got to be passionate and you have got to get other people similarly enthused. But it all comes back to getting the right people. If we get the right people and the right chemistry then we have got a chance of succeeding."

Health and safety: a zero tolerance approach
Cross London Rail Links’ (CLRL) vision is health and safety excellence as a client, exemplary performance from its consultants and contractors, the promotion of a positive safety culture across the whole Crossrail programme and proactive management of health and safety in design. In this regard the role of CDM coordinator is one contract that will not be going out to tender.

CLRL will take prime responsibility for health and safety by retaining the role in-house. The reason for this is that health and safety is paramount at CLRL with zero accidents the driving philosophy. "Our philosophy is that all accidents are preventable and injuries to people are unacceptable," says programme director Graham Plant. "That has to be the starting point. If you knew that the next accident may be to your son or daughter then you would do everything in your power to prevent that happening. Therefore it can be no different in considering our employees, consultants, contractors or the public and so any target above zero cannot be considered. "Health and safety is uppermost in our minds," he adds.

"Leadership starts from board level with its health and safety committee and at executive committee meetings health and safety is always the first item on the agenda." The project partner, project delivery partner and all contractors will all be incentivised along these lines, says Plant, with the high level targets being kept at a high level. "If you introduce lots of targets at a low level it becomes an administrative nightmare and it is so easy for someone to blame someone else. If you set the targets at high level then you have either done it or you haven’t."

CLRL will apply this approach to other key targets. "We don’t want to fall into the trap of incentivising suppliers against reporting accidents, otherwise you may never get to hear about it. And it is often the case that knowing about the small incidents means you can prevent the bigger ones happening in the future."

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