Signs that prime contracting can meet the Government's demanding cost and time saving expectations are starting to emerge at Devonport Royal Dockyard near Plymouth. Devonport owner-operator DML is carrying out the seismic upgrade of dry docks used to refuel and refit nuclear submarines under a £350M prime contract with the Ministry of Defence.
Stabilisation and reconstruction of 15 Dock was completed and handed over in June - a month ahead of schedule. Three other projects under way are on target, says DML.
The MoD decided to develop Devonport as its sole nuclear submarine support base in 1993, principally on the strength of its a design for a new nuclear submarine refuelling system, developed by DML. DML's bid came in at about half the cost of a competing tender from Rosyth naval dockyard in Scotland.
Seismic standards for nuclear installations were revised by the Nuclear Installations Inspectorate shortly after. All structures must withstand a one in 10,000 year seismic event of 0.25g rock head acceleration - roughly equivalent to the earthquake that shook Kobe in Japan.
DML is prime contractor for the seismic upgrade of the Devonport docks. Known as D154, the project has several main components.
Number 10 Dock has been upgraded to provide temporary facilities while other work is carried out. Three other docks - 14, 15 and 9 - are being rebuilt to accommodate a new nuclear refuelling system, served by a low level refuelling facility, also under construction.
Docks 14 and 15, 146m long, 24m wide, and with a mean high water spring depth of 13.76m are to berth the 4,500t displacement Trafalgar Class attack submarine. Number 9 Dock is being enlarged from 253.74m long by 36.88m wide with mean high water spring of 11.23m. It will take the new Trident missile carrying Vanguard Class - a 15,000t monster.
The dock floor is being raised to reduce the height between the reactor access houses, constructed to carry fuel rods to the submarines and the submarines themselves. Seismically qualified cradles are being constructed and giant reinforced concrete cellular caissons are being cast to seal the docks. Hundreds of miles of cabling and a plant battery are being installed alongside heavy civils work.
DML is majority owned by Brown & Root, with shareholders BICC and the Weir Group. It won the D154 contract in March 1997 and negotiated ownership of the docks as part of the package. As prime contractor, it then assembled an alliance of engineering firms that could deliver the design, management and operating competencies required on a complex project against a tight timescale.
The Devonport Alliance Redevelopment Team, or DART as the group is known, brings together: DML; Brown & Root which is responsible for design of buildings and infrastructure for the project; Babtie Group as main civil engineering and building services designer; Strachan & Henshaw for design, supply and installation of reactor access houses, cranes and sub cradles; Rolls Royce for design, development, safety justification, procurement, erection and commissioning of fuel hand- ling equipment and nuclear site process systems; and BNFL, engineering safety cases and in charge of specialist nuclear design.
Construction work started last year with the first major project, 15 Dock, handed over by contractor Keir Construction last month. This will enable docking of Trafalgar Class submarines later this year. Number 9 Dock must be ready for Vanguard Class submarines in 2002, and the balance of work is to be finished by 2004.
Brown & Root's experience of partnering in the offshore oil and gas industry was important in shaping the DART alliance and in persuading the client its novel approach to management would work on a giant civils project.
D154 is a fixed price contract with payment made against pre-determined 'markers' as the project progresses. Though the MoD has specified what DML must deliver, the client has no direct involvement in the project. DML carries ultimate responsibility but the DART alliance members have agreed to share the risk equally with DML. Selection was by competitive tender, with final appointment to DART based on detailed discussion of attitudes to alliancing.
DML chairman Tony Pryor said it was important that DART members had the experience and financial strength to convince the client the project was deliverable even if costs overran. Brown & Root, for example, is owned by the successful Halliburton Group.
DART is responsible for delivering detailed design and producing method statements. Both must accord with rigorous environmental and safety criteria set out by the Nuclear Installations Inspectorate, the MoD's nuclear watchdog, the Health & Safety Executive and the Environment Agency.
DART members say roughly equal periods of time - a year in each case - are required for designs to be created, verified and passed by planners and regulators, and for construction.
DART is also project manager, involved in each of the packages and supervising the entire scheme. Within DART specialist project teams have been given responsibility for delivering particular packages to the overall scheme. Managing interfaces between teams has been crucial, says Pryor.
Because DART is taking all construction risk it has had to form a close relationship with its suppliers to ensure it does not hit unforeseen snags. 'There can be no basis for claims,' states construction logistics manager Alistair Harpur. 'We're all in the life boat together.' As a result, problem resolution and co-operation are central to the alliance's internal working relationship. Sharing construction risk also means construction team members have agreed to share in cost overruns, or higher than expected profits. Harpur says members have agreed to assist one another by transfering finance or staff if any parts of the project run into difficulty.
Construction has been let to main contractors, each responsible for delivery of its allocated package. Keir Construction has handed over 15 Dock, main contractor for 9 Dock is Tarmac, and Taylor Woodrow is responsible for the low level refuelling facility. James Scott (Amec) won the contract for cross-site mechanical and electrical engineering on a design and construction management basis. A contractor for the upgrade of 14 Dock has still to be appointed.
Although selection was by competitive tender to ensure value for money, each main contractor has entered into partnership with DART. Every construction package must fit a tight schedule and turn out at or below budget. As part of the overall scheme it must also interface with other projects and with the surrounding operational naval base. Main contractors are held accountable for meeting targets; partnering is helping them negotiate complexities encountered en route.
Each of the four major contractors has contributed to construction and method detail in the design phase, says Harpur. This helps avoid disputes about design on site. Design and method statements can be geared to allow the contractor to make fast progress and partnering between contractors and DART has also promoted value engineering.
To optimise the performance of its partnership with Tarmac, main contractor for the vast 9 Dock upgrade, DART and the contractor have co-located in a single project office.
DART has not yet been able to calculate what savings, if any, have been delivered although they are expected.
Because it has an overview across the whole project DART has been able to manage some unusual logistical challenges. Site traffic and 10,000 construction workers have to be co-ordinated within the confines of a secure naval base. And because DART knows what is happening on each discrete package it can aid the transfer of resources around the site.
As work on one contract finishes plant can be borrowed, leased or bought by contractors for a different package with work still to do.
Harpur states: 'Jobs are split into different disciplines with well defined interfaces. The challenge is one of co-ordinating the interfaces.'
Under CDM regulations main contractors were responsible for co-ordinating on-site safety. 'We realised that if the main contractor is capable of co-ordinating safety, it can do everything else too,' added Harpur.
Taking the spirit of co-operation right through the supply chain, main contractors have, in turn, encouraged alliancing with their subcontractors on an individual project basis. About £50M work has been awarded to locally- based subcontractors.
But project manager for 9 Dock Loftus Buhagair says some subcontractors are on relatively low margins and have calculated that limited scope for improving margins does not justify integration in an alliance.
However, firms carrying out larger subcontracts have been supportive. 'Should we ever fall out we have a contract to fall back on,' Buhagair comments. 'But alliance aids understanding of what's required. That's getting better all the time.'