Cornwall Growth Deal Infrastructure Improvements Package, UK

Cornwall Growth Deal Infrastructure Improvements Package, UK
  • location:
    Cornwall, UK
  • Value:
    £60 million
  • Contracts Used:

    NEC3 ECC Option C, NEC3 PSC

  • Start-Finish:
    2015-2018
  • Employer:
    Cornwall Council
  • Contractor:
    Cormac Solutions Limited
  • Project Manager:
    Currie & Brown and Mace

Cornwall Council is using NEC contracts to deliver a central-government-funded package of 30 separate road junction and corridor improvement schemes over a tight three-year timescale. Worth £60 million, the ‘Growth Deal’ schemes will future-proof the county’s road network to 2030 and beyond.
 
The relatively small but complex schemes are in five geographical areas and spread over a round trip of nearly 250 km. All are subject to the challenges of working in a narrow peninsula with a limited supply chain, and many are located on main commuter routes with a need to maintain peak-hour traffic capacity during construction. Some are also up against planning deadlines.
 
The package was let in September 2015 to the council’s wholly owned contracting arm Cormac Solutions Limited. It was awarded on a two-stage design-and-build basis under an NEC3 Engineering and Construction Contract (ECC) Option C (target contract with activity schedule). Completion is on track for the end of 2018.
 
Joint project managers Currie & Brown and Mace were engaged under an NEC3 Professional Services Contract (PSC) option A (priced contract with activity schedule). The council, contractor and project managers are working together as a ‘whole team’ in co-located offices on each site. 
 
ENSURING COST CERTAINTY
 
According to the council’s capital projects team leader Nicola Yeates, ‘Cost certainty is a prime concern on this package due to the very tight budget. While NEC is the contract suite of choice for our transport-related capital projects, the pain/gain mechanism in ECC Option C was particularly appropriate as it provides an incentive for both parties to reduce costs, mitigate risks and optimise the programme.
 
‘The adoption of a two-stage design-and-build procurement process also maximised the amount of productive time the schemes could utilise before committing to a target cost for the build phase. This enabled greater cost certainty and risk appraisal at earlier stages of each scheme.’
 
She says the contract was developed collaboratively with a tight pain/gain range (95% to 105%) to discourage over-inflated target costs and encourage an ethos of continual search for cost savings. ‘However, lessons learnt from previous projects identified the areas where we were ‘exposed’ to additional costs and these formed the basis of discussions in risk allocation.’
 
Through use of 12 Z clauses the council included an affordability cap, such that the work would not go ahead if it was considered unaffordable or insufficient value for money at the end of the design stage. It also made the contractor responsible for delays by statutory undertakers, road safety audit changes deemed necessary on completion, unforeseen ground conditions, weather risks and traffic management to improve cost certainty.
 
‘In addition, we specified shared risk registers to keep the project team focused on the current status of each scheme, restricted the costs of rectifying defects, encouraged value engineering and amended take-over conditions.’
 
POSITIVE PROGRESS
 
Yeates says that though the construction stage target prices were all deemed to be value for money, the initial construction stage targets were £5.3 million (9%) over budget, which was attributed to the initial estimates being too low for the complexity of the delivery.
 
‘We therefore held a value-engineering workshop at the end of the design stage, which reduced the funding gap to £3.5 million (6%). Since then the ECC pain/gain incentives and other contract provisions have helped to cut it to £0.6 million (1%) at the half-way stage in the construction programme.  We are confident of hitting the budget by the end of the project.’
 
She says the concept of a whole-team approach has been critical to the project’s success to date.  Cormac has engaged 36 suppliers and subcontractors on NEC contracts with back-to-back terms to the main contract and working over several sites for maximum efficiency. This has also resulted in monthly assessments being processed quickly, ensuring all parties are paid promptly.  
 
‘Communication has been excellent, with regular NEC programme, cost and risk reviews involving the whole team and collaborative project management software ensuring efficiency and visibility by all parties. We actively encourage NEC early warnings, with 280 issued by the half-way stage and just 68 leading to compensation events. We have embraced Skype for improved communications with a disparate team and this has provided the ability to hold meetings at short notice and tackle issues promptly’
 
Yeates concludes, ‘NEC has helped to facilitate an unprecedented level of collaboration within the project team, enabling us to procure the best, lowest-cost solution for the required quality. This approach to working more collaboratively than ever before has been a success and we expect to roll it out on future projects.’
 
BENEFITS OF USING NEC
 

  • ECC Option C pain/gain incentives plus value engineering and other contract provisions have helped to bridge a 9% funding gap and provided greater cost certainty throughout the project.
  • NEC facilitated unprecedented collaboration within the project team, enabling the client to procure the best, lowest-cost solution for the required quality.
  • Use of the NEC3 suite of contracts for all parts of the supply chain provided a consistency of contract management and fostered a whole-team approach to delivery.

 
FURTHER INFORMATION
 
Contact: Nicola Yeates, Capital Projects Team Leader, Cornwall Council, UK
Tel: +44 1872 224228
Email: nyeates@cornwall.gov.uk
Web: www.cornwall.gov.uk

Back to Previous PageBack

NEC CONTRACT FINDER

Not sure which
contract you need?
Start Finder

Q2. What is the risk / complexity level of your project?

Q2. What is the risk / complexity level of your project?

Q2. What is the risk / complexity level of your project?

Q2. What is the risk / complexity level of your project?

Q3.What type of contract do you require?

Q3.What type of contract do you require?

Engineering & Construction Short Contract The Engineering & Construction Short Contract is the most appropriate contract for your project:
View Contract X

Engineering & Construction Short Subcontract The Engineering & Construction Short Subcontract is the most appropriate contract for your project:
View Contract X

Engineering & Construction Contract The Engineering & Construction Contract is the most appropriate contract for your project:
View Contract X

Engineering & Construction Subcontract The Engineering & Construction Subcontract is the most appropriate contract for your project:
View Contract X

Professional Services Short Contract The Professional Services Short Contract is the most appropriate contract for your project:
View Contract X

Professional Services Contract The Professional Services Contract is the most appropriate contract for your project:
View Contract X

Term Service Short Contract The Term Service Short Contract is the most appropriate contract for your project:
View Contract X

Term Service Contract The Term Service Contract is the most appropriate contract for your project:
View Contract X

Supply Short Contract The Supply Short Contract is the most appropriate contract for your project:
View Contract X

Supply Contract The Supply Contract is the most appropriate contract for your project:
View Contract X

Framework Contract The Framework Contract is the most appropriate contract for your project:
View Contract X

Adjudicators Contract The Adjudicators Contract is the most appropriate contract for your project:
View Contract X

Contact NEC Contact the NEC Team for further advice
View Contract X

X

Copyright © NEC® Contracts 2014, all rights reserved.
NEC® is a division of Thomas Telford Ltd, the commercial arm of the Institution of Civil Engineers.
Company Reg. No. (Thomas Telford Ltd): 2556636. VAT Reg. No: 240877747.

Institution of Civil Engineers Thomas Telford