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Procurement routes


Much of the planned £1bn construction spend to 2015 is up for grabs. Most existing procurement routes are being reviewed. David Teale and head of development Andy Campbell are looking closely at ways of improving value, minimising risk and achieving certainty of out-turn cost.

One established game plan will remain sacrosanct, though.

'We will build things just too late, ' says Teale - a strategy that makes more sense in practice than is initially apparent. By 'sweating' the asset and making it work harder, the design capacity of, say, a departure lounge or taxiway can be stretched, making its 'delayed' replacement programme more cost effective.

Design and construction work is procured by routes ranging from traditional engineer design tenders to a new three stage design and build contract, to be used first on Skanska's interchange scheme.

Framework contracts, common on other airports, are thought by the Manchester team to offer insufficient continuity of staff over, say, a five year term. Continuity is essential to understand airport procedure, argues Teale. However, framework deals for professional services - architecture, quantity surveying and the like - are regarded as successful and will remain the favoured route.

Minor works, such as refurbishment, are let through conventional design and build competitions. A select list of 30 contractors is rotated so each tender is bid by just three firms.

Procurement of larger, bespoke contracts is tailored to the individual requirements of each. Providing there is no ambiguity over transferring risk to the contractor and that the client can be certain it will get what it thought it was asking for, design and build is generally favoured.

The airport's largest current project, the £60M ground transport interchange, is testing a new style three stage design and build contract with Skanska. Its mix of partnering, open book financing, target costs and guaranteed maximum price is designed to give a non-adversarial price structure leading to outturn cost certainty for both sides.

Though the contract's individual components are not new, the total package is novel for airport work.

The first stage invited tenderers to submit a bid including design fee, profits, overheads, value management and a target cost based on the client's detailed conceptual design.

Award of the contract was followed by a six month familiarisation period allowing Skanska to question the client and ensuring the contractor understood exactly what was needed.

Stage two involved detailed design by the contractor and, with open book transparency, the tendering and award of nearly 90% of the work packages.

Skanska then guaranteed a maximum price, taking responsibility for cost overruns but agreeing to share savings with the client.

The final construction phase, just started, remains an open book and is, according to both sides, working well so far.

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