Drainage Services Department - Hong Kong

Name of Project: Contract No. DE/2013/05, Contract Title: Provision of Electrical and Mechanical Facilities for Tin Liu Ha Sewage Pumping Station (TLHSPS) and Tong Min Tsuen Sewage Pumping Station (TMTSPS)

Value: HKD18.5M (GBP1.7M)

NEC3 contracts/options used: NEC3 Engineering and Construction Contract (ECC), Option C: target contract with activity schedule

Start-finish dates: March 2014 – March 2016

Main project team members:

Employer – Drainage Services Department (DSD), the Government of the Hong Kong Special Administrative Region (HKSARG)

Project Manager – Chief Engineer/Electrical & Mechanical Projects, DSD, HKSARG

Contractor - The Jardine Engineering Corporation, Limited ICAC – Independent Commission Against Corruption

Scope and significance of project:

DSD is the pioneer of NEC in the HKSARG. It all started with a pilot ECC civil works contract in 2009, then gradually extended to term service contracts and large scale civil works contracts including a HKD1,000M ECC Option C contract. Since then, DSD has also adopted PSC and ECC Option A, B and D for numerous contracts and the figure continues to rise. In addition, DSD has launched NEC forum and training sessions to share the success stories and conducted studies to evaluate outcomes for better NEC’s performance. For E&M works contracts, Contract No. DE/2013/05 is the first one that has adopted ECC Option C in HKSARG. At different stages of the Contract, DSD organised NEC workshops to foster and fortify the collaboration spirit among the project team. In an industry that was rooted to the conventional contract mode and adamant against changes, DSD took the helm and steered the local E&M trade to embrace the changes and buy-in NEC months before the tender invitation period.

Please detail how you demonstrated collaboration on your project:

In principle, NEC is a three legged race in which the Employer and the Contractor forge shoulders to shoulders in harmonious strides. In practice, there will not even be a race if the trade’s response is cold. To lobby the local E&M trade’s support to partake in the tender invitation exercise for Contract No. DE/2013/05, DSD’s top management organised a chain of regular meetings with key trade stakeholders to roll out the initiative and develop the collaborative spirit in driving the change. DSD then arranged a mock tender exercise for the local E&M trade to familiarise with the NEC tender submission requirements. In the end, four conforming tenders for this Contract were received, a result on par with those of past conventional contracts. To further promulgate NEC, DSD demonstrated how NEC could deliver quality downstream results through workshops and experience sharing sessions in NEC Asia Pacific Users’ Group.

Undoubtedly, mutual trust and cooperation among stakeholders is a major building block of NEC but one has to be wary that this bond is not instituted at the expense of supervision, checks and unfettered discretion. With this in mind, during the tender preparation stage, DSD worked painstakingly with ICAC and legal advisors to tailor-make sub-contracting and procurement procedures for E&M works. Thus, DSD could cement the alliance among stakeholders on saving in cost and time while safeguarding integrity and probity across the board. Indeed, for the Contractor, NEC has brought about benefits beyond the bounds of this Contract.

As cost and time savings were generated, DSD duly reflected the Contractor’s outstanding performance in the quarterly contractors’ performance reports (CPR). Since the HKSARG’s tender bidding process is normally based on tender price and past performance, the good ratings in CPRs are incentives for the contractors to further enhance their performance. In short, the merits manifested a snowball effect. So, the success story of Contract No. DE/2013/05 rapidly spread across the E&M trade and their acceptance to adopt NEC has burgeoned since. True, this Contract is by no means a mega size contract, but by taking that one step forward to spearheading the adoption of NEC, DSD has triggered the E&M trade to take a giant leap.

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