This case study is part of the Spotlight Campaign for Transport. To read more on how NEC Contract suite has been utilised in the Transport Spotlight, please click here.
Connect Plus, the consortium responsible for operating and maintaining the busy M25 motorway network around London on behalf of Highways England, is using an NEC-procured framework to deliver lifecycle renewal works until 2029. The consortium was highly commended for the 2018 NEC Client of the Year Award.
Connect Plus, which comprises Balfour Beatty, Edge Orbital Holdings Ltd and Egis Road Operation UK, was awarded a 30-year design, build, finance and operate contract in 2009 to manage the M25, sections of the M1, M3, M4, M11 and A1 and the A282 Dartford Crossing – a route total of 440 km.
In 2017 Connect Plus completed the procurement of a 6 + 4 + 2 year framework with four contractors to deliver lifecycle renewals work as part of a wider asset management team. Contractors Geoffrey Osborne Limited, Jacksons Civil Engineering, Skanska Infrastructure Services and Tarmac Contracting are each engaged under an NEC3 Engineering and Construction Contract Option E (cost-reimbursable contract) to deliver a total of around £500 million of work.
The lifecycle renewals framework involves renewing a wide variety of highway assets with a diverse range of characteristics and challenges, some of which are significantly older than the M25. It also has to take place at the same time as the network is being developed and upgraded – and all in a live traffic environment.
The NEC awards judges said, ‘Connect Plus has taken a good approach to managing a framework of four contractors using a balanced scorecard approach to procurement and performance management. This is supported by behavioural assessments, relationship management and collaborative forums.’
According to commercial director Sofia Athanassiou, ‘We are determined to ensure that the new NEC renewals framework will enable us to successfully meet our long-term asset-management obligations. We consulted widely with first- and second-tier suppliers in the previous framework, plus various other client organisations.
‘My predecessor Chris Richardson also ensured that appropriate industry-leading expertise was brought into the client team by engaging Gardiner & Theobald on procurement, Leading Edge on NEC contract matters and Temporal Consulting on collaboration, relationships and culture. The result was a high level of focus on innovation, integration and leadership and the use of a balanced scorecard approach for both procurement and ongoing performance management.
‘Development of the balanced scorecard was done through workshops with the people across the client team who are responsible for the renewals programme. They were then involved throughout the procurement process – including development of framework documentation, pre-qualification questionnaires and invitations to tender as well as sitting on interview panels. This gave them a greater sense of ownership of the renewals framework, which we believe is essential for its long-term sustainability. The same people are now responsible for all of the elements of the balanced scorecard post procurement.’
Connect Plus maintains a principle of ‘procurement as part of mobilisation’, which challenged tenderers across all areas of the balanced scorecard. ‘This included cultural and behavioural assessments by assessing their ability to work with other tenderers, from leaders to site supervisor level,’ says Athanassiou.
SUPPLY CHAIN MAP
The successful tenderers are guaranteed an equal share of the pipeline of work and have full transparency of each other’s work. Technical and programme director Elaine Gazzini says, ‘In line with the NEC3 clause 10.1 requirement to work in a ‘spirit of mutual trust and co-operation’, work packages are allocated collaboratively through dialogue with all involved, along with an open-book approach to developing and agreeing prices.
‘The contractors also contributed to supply-chain mapping, which is shared across the framework. The purpose of this is to understand the supply chain better, identify stressed suppliers that may require support or guidance and, critically, to inform more intelligent procurement over a longer term.’
Gazzini says a key feature of the framework is the incentive model. ‘The largest element of incentive is a community fund, which is shared proportionally by each contractor. It is a combination of performance measures using the balanced scorecard categories and encourages the contractors to work together with each other and with us to create savings.’
To ensure that the whole community is able to engage and work together collaboratively and with NEC3 clause 10.1 at its heart, Connect Plus has invested in a programme of relationship management training. ‘In addition, trained facilitators are embedded across the community, who carry out the role of facilitator as well as their day jobs, and we have a programme of ‘lead coaches’ focusing on middle to senior team members to ensure we have the right skills and support at the centre of the framework,’ says Gazzini.
BENEFITS OF USING NEC
- NEC3 ECC Option E cost-reimbursable contracts provide a fair, flexible and cost-effective procurement route for complex and challenging asset renewal across one of Europe’s busiest motorway networks.
- The NEC3 clause 10.1 requirement to work in a ‘spirit of mutual trust and co-operation’ helps to ensure full transparency between framework contractors, with work allocated collaboratively along with an open-book approach to developing and agreeing prices.
- NEC flexibility enables incorporation of a balanced-scorecard approach to measuring performance and incentivising contractors.
Contact: Sofia Athanassiou, Commercial Director, Connect Plus, South Mimms, UK
Tel: +44 20 3386 8500