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Dragados' complete solution for Bank means losing contractors innovations to go unused

None of the innovative ideas put forward by firms bidding for London Underground’s (LU’s) £625M Bank station capacity upgrade are to be used by winning contractor Dragados, NCE can reveal.

Four bid teams each spent upwards of £2M tendering the complex station rebuild job in the belief that they were to be reimbursed for innovative ideas put forward as part of the process that are then incorporated into the built scheme.

But LU has told them that it will not be buying any idea or innovation for incorporation into the final scheme. It will however buy all four schemes prepared as it will add weight to its forthcoming planning application.

The project will create a new ticket hall at surface level and includes the diversion of around 570m of the southbound Northern Line running tunnel plus the formation of a new southbound platform.

The contract was awarded last week to Spanish contractor Dragados (see box) after a lengthy, year-long tender process using LU’s new Incentivised Contractor Engagement (ICE) model.

Bank station

Bank upgrade: Contractors were asked to include cost saving ideas in bids

The model was developed by LU’s stations team in its capital programmes directorate with the hope that it would better incentivise contractors to devise and share money saving ideas at tender stage.

Before the tender process began, LU capital programmes director David Waboso said the Tube operator would reward contractors with a half share of actual savings arising from the use of their ideas even if they failed to win the contract.

“It’s a fact of life that the person with the best idea doesn’t always win the job,” he told NCE. “But with ICE, if their ideas save money, they will get a share of it,” he said (NCE 23 February 2012).

But LU told NCE this week losing bidders’ ideas would not be needed as Dragados’ bid “hangs together” in its own right. Instead LU will buy the losing bidders scheme’s to bolster its planning application.

“The Dragados scheme holistically hangs together and therefore we have advised bidders that we will not be seeking to purchase any individual idea or innovation to put into this scheme,” LU Bank station upgrade project manager Simon Addyman told NCE.

“However we do want to buy the three other bidders’ innovations because we can then demonstrate at a Transport and Works Act Inquiry that we have considered a number of scheme options in the open market and that the lead bidder’s scheme is the best transport case.”

Addyman said he could not give details of the innovations proposed by Dragados or the losing bidders until the contract had been formally signed and LU had taken ownership of Dragados’ solution later this month. Losing bidders have also yet to be told of the reasons why their ideas were unsuccessful.

But Dragados’ solution “substantially” exceeded the target of a 15% increase in benefits as well producing the lowest bid price of the two shortlisted teams (NCE 30 May), he said.

Its bid was the lowest of the two shortlisted, with a 23% cost reduction compared to LU’s overall reference design. It was not the lowest of all bids submitted as this came from a team that failed to make the two-team shortlist (News last week).

But on a key measure of improving journey times Addyman said that Dragados’s bid achieved a 19% improvement on LU’s base case.

“The key problem we were trying to solve is congestion in the station and bidders were incentivised to look at ways of designing to remove hot spots [of congestion],” said Addyman.

“The second objective was to produce an improvement in journey times, and around these key areas the Dragados solution is the best.”

Addyman added that Dragados’s bid also scored highly in terms of methodology and step-free access.

Waboso this week stressed that Dragados’ bid was the best solution, and that losing bidders would be compensated.

“We’re delighted with the outcome,” he said. “The lead bidder represents both the lowest bid price [of the final two] and offers the greatest benefits.

“The chosen scheme provides the best overall value and that’s why we chose it but we can absolutely confirm that as we’ve consistently said we would, we are buying innovations from the three losing bidders - in this case for our use in the upcoming planning process,” he said.

LU has already acknowledged that its ICE process is time consuming and expensive (News last week).

This week it said it would consider amending it should it be used again on its next major station upgrade projects at Holborn and Camden Town. The Holborn job could go out to tender later this year.


Spanish inquisition

London Underground (LU) has defended its decision to award the £625M Bank job to Spain’s Dragados, within days of the launch of the government’s new industrial strategy for construction aimed at cutting imports and boosting exports.

“I think we should recognise the predominance of the Dragados supply chain, which is largely UK-based,” said LU head of station capacity Programme Ralph Freeston.

LU chose the Spanish giant ahead of a Costain/Vinci joint venture last month, but required Transport for London (TfL) board ratification and funding approval to take the project through the planning process.

It had already eliminated joint ventures of Bam Nuttall/Ferrovial/ Kier and Morgan Sindall/Balfour Beatty/Alpine Bemo.

Costain/Vinci had brought in Mott MacDonald as its consultant, while Spanish giant Dragados is using its own in-house design expertise. Once planning consent is granted, LU must secure funding for before work can start on site in 2016.

The upgraded station would open in 2021.

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