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London 2012 Learning Legacy The Greatest Show on Earth Delivering the Olympic Park

Ken Owen Commercial Director, CLM David Birch Head of Programme Controls , CLM

Agenda Overview

Contract Management Programme Controls

Summary

The Challenge

Building the Assets

8 Olympic Park Sporting Venues

One Main Media Centre (of 1 million square feet) & Multi Storey Car Park

26 bridges and 7 underpasses

12km of roads

Two million cubic metres of earthworks

One Energy Centre (concessionaire)

13 kilometres of tunnels

New utilities infrastructure and 32kv & 11kv utility diversions

79 hectares of Landscape and Public Realm

21 Pedestrian & Vehicle Screening Areas

The Challenge

Preparing the Site

• Demolish >220 buildings

• Dig out 1.5 million m3 of contaminated soil

• Remove 72 pylons & reroute power to East London via two new 6 km tunnels

• Clear 2.5 km of railway tracks

...to create a construction platform of 2.5 square kilometres

Contract and Procurement Strategy 29 July 2010 - CLM Delivery Partner

London 2012 Tier 1 Supply Chain Map

Tier

1Pr

ojec

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ad D

esig

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ad D

esig

nPr

ojec

tTi

er 1

Site

- w

ide

Logi

stic

sTi

er 1

North Park South Park

Morrison Construction (Galliford Try)

BAM Nuttall Ltd

Lot 1: North Civils, Loop Roads etc

Lot 2: South Civils, Loop

Road etc

Lot 3: Rail Over-bridges

Lot 4: Main Stadium Area

Bridges

Olympic Stadium

Aquatics (inc F10)

Permanent Venues

IBC/MPC Seating Framework The Greenway

Balfour Beatty Group Ltd

Balfour Beatty Group Ltd

BAM Nuttall Ltd

Skanska Construction

(UK) Ltd

Sir Robert McAlpine Ltd Balfour Beatty Carillion ISG

Powerlines Underground (PLUG)

J Murphy & Sons

Enabling Works Structures, Bridges & Highways

Landscape & Public Realm

Utilities Infrastructure Agreement

No.1

Electrical Civil Works

Potable Water Network132Kv Network

Primary Sewer & Pumping

Station

Gas Network IP

Telecom Duct Network

EDF (Energy)National Grid Company

Utilities

Civils Works Framework

Basketball Arena

Structure & Envelope

VelodromeHandball/

Indoor Sports Arena

Swimming Pools (Eton

Manor, LOCOG, Water Polo)

Wetland Area Bridges

McNicholas Construction

Services


Services


Services


ServicesBarhale

ConstructionBAM Nuttall

Ltd

North Park Management

Contractor

Central Park Bridge (F06)

Volker Fitzpatrick

BAM Nuttall Ltd

Lagan Construction

Temporary Venues

South Park Contractor

Stratford High Street Bridge

SBH Legacy Conversion

TBA TBA

8020

NEC3 (Various Options)

£200minc diversions

£250m inc diversions

8010

NEC3 (Various Options)

£125m

IChemE (Burgundy)

£34m

7030

NEC3 (C)1 Stage Part

D&B

£33m

7040


D&B

7060


D&B

£44m £15m

7050


D&B

7080


D&B

£17m

7075

NEC3 (A)1 Stage D&B

£10m

NEC3 (C)1 Stage D&B

£11m

NEC3 (C)1 Stage D&B

£40m TBA

Bespoke

£12m

8519

Note: Novated to 8524

£10m £3m£7m £3m

8525

NEC3 (C)

£17m

7280

NEC3 (A)Lump Sum

£15m

7160

NEC3 (F)Mgt Contract

£151m£431m

6050

NEC3 (C)1 Stage D&B

£189m

6001

NEC3 (C)2 Stage D&B

£167m

6200

DBFO

6530

NEC3 (A)1 Stage D&B

£33m £45m

6510

NEC3 (C)2 Stage D&B

6676

NEC3 (A)

6750

NEC3 (A)NEC3 (A)

Ready Mix Concrete

Temporary Utilities

Temporary Buildings

Support Logistics

M11 Planning Consultant

Occupational Health & Intro

Logistics Facilities

Management

Temporary Infrastructure Logistics

Super Highways

ManagementAggregate (fill)

Waste Management

Road Safety Audits

Fuel, Lubricants etc

Horiz. & Vert. Control

Services

East London Logistics Centre

Internal BussingTimberEnvironmental

Monitoring

On-street Parking Surveys

DMS (Booking Module)

Material Logistics

DMS(Tracking Module)

M11 Logistics Centre Design

Pell Frischmann WSPAggregate

IndustriesVolker

FitzpatrickE & HCTExel Europe Ltd (DHL)Atos Origin Duradiamond

Panel in place (see separate

list)

Mason Land Survey LtdLogica Ltd Adler & Allan

Airport EnergyBroadway

Maylan

Veolia Environmental Services (UK)

PLC

Wingate Electrical PLCEntec Taylor

Woodrow

London Concrete (Part

of AI)Portakabin Ltd

People Logistics

£350k

9142

CLM Task Order

£650k

9140

Bespoke (ODA IT)

9150

NEC3 (TSC)

£62m

9360

NEC3 (TSC)

£2m

9330

Bespoke

N/A N/A

9020

EP Framework

9310

Bespoke

9015

EP Framework

TBA

9430

Bespoke

TBATBA

9350

Panel Framework

TBA TBA £3mTBA

9240

NEC3 (C)

£18m

EP Framework

9200

OGC Framework

EP Framework9215

ODA Contract

9410NEC3 (C) works NEC3 (TSC)

services

£8m £50m

9420

2 x Bespoke

£30m£26m

9400Bespoke Service Contract

9220

OGC Framework

£2m

9040

OGC Framework

£17m

TVF – Temporary Venues and Facilities (inc. Basketball, Eton Manor, SPWUT and Water Polo etc)

Water Network Own &

Operate

Hostile Vehicle Mitigation

Security Guarding

Screening & Searching

Access Control System

Security

Command & Perimeter Security System

1055

NEC3 (TSC)

G4S

3114

NEC3 (TSC)

Honeywell

1057

NEC3 (TSC)

1056

NEC3 (TSC)TBA

Name Restricted

Transport Malls &

Accreditation Areas

Lea Navigation Legacy

Gas Network Own &

Operate

Energy Centre Heating & Cooling

Electrical Equipment Own & Op

Primary Substation

£11m

8512

Note: Novated to 8524

EDF Lea Valley Utilities

£5m

8524

Asset Disposal Bespoke

£8m

ELYO Suez

8516

Concession

£0

Asset Disposal Bespoke

TBA

£0

Thames Water Utilities Ltd

8513

Section 103 Adoption

TBA

NEC3 (C)1 Stage D&B

£32m

NEC3 (C)1 Stage D&B

£23m

TBA (+ possible TVF)

See Temporary

Venues Item D

£20m £7m Inc. TVF£7m

Broxbourne (Canoe)

8700

TBA

Off – Park Venues

Eton Dorney (Rowing)

Greenwich (Badminton)

8770

NEC3 (A)Lump Sum

£9m

Temporary Venues

Framework

Weymouth and Portland (Sailing)

8760

NEC3 (A)

TBA

Royal Artillery Barracks

(Shooting)

8750

NEC3 (A)

Dean & Dyball

inc TBA

SWERDA Framework

White Young Green LDA Design

TBA TBA

6675

NEC3 (PSC)

1007

NEC3 (PSC)

TBA

Zaha Hadid Architects Drivers Jonas

OGC Framework

Hopkins Architects

Arup/ Make Architects

TBATBA

EP Framework

<£1m

6000

NEC3 (PSC)

Sir Robert McAlpine

TBA £4m

Mott MacDonald

Adams & Sutherland

7281

Services Contract

Inc in head contract

TBA

NEC3 (PSC)TBA

£1m

Basketball:SKM

TBA6535

NEC3 (PSC)

TBA

RPS Burks Green

TBA

NEC3 (PSC)

Whitby Bird

NEC3 (PSC)Option E CE*

TBA


Atkins(OPD)

Arup(OPD)

John McAslan

TBA



TBA

ArupHeneghan

Peng Architects



TBA



7010

NEC3 (PSC)Services Instruction*

TBA


TBA TBA


Arup(OPD)

TBA

TBANEC3 (PSC)Option E CE*

TBA

Atkins (2no) Arup (2no)

(OPD)

TBATBA TBA

Atkins or Arup(OPD)

Atkins(OPD)


TBATBA TBA

Arup(OPD)

TBA

Arup(OPD)

TBA


Atkins(OPD)


NEC3 (PSC)

Atkins or Arup(OPD)

TBA

Eton Manor: Stanton Williams

6751

NEC3 (PSC)

TBA

See Aquatics

Water Polo:Zaha Hadid Architects

National Grid Company

EDF (Energy)

£45m

Bespoke

£45m

Bespoke

Training Venues

TBA

TBA

TBA

£9m

TBA

TBATBA

BMX: Hopkins Architects

See Velodrome

Gas Network LP

£4m

Atkins(OPD)

TBA



Services

Pile Testing

Skanska Cementation

£1m

7400

NEC3 (C)


TBA

Arup(OPD)

Ashtead Plant Hire Co. Ltd

TBA

9480

TBA

TBA

Stratford Stn. Enabling Works

TBA

FM Conway

Entrance Plaza Design

WSP

TBA

TBA

Signage to Work Sites

9050

EP Framework

£75k

WSP

Site Vehicles Radios - Interim

AirwaveGCDA

TBA£235k

9440

NEC3

9235

GCDA Framework

Greenway Ramps

TBA

TBA

inc

Eton Manor Sports

Complex

£6m

Atkins(OPD)

£2.5m £108m £35m £1m £7.5m

Arup(OPD)

Atkins(OPD)

Atkins(OPD)

PPE Interim PPE Permanent

TBA

9460

TBA

ARCO

£20k

Greenhams

OGC Framework

TBA

M11 Services

TBA

NEC3 (TSC)

TBA

TBA

NEC3

Radios - Permanent

Construction Site Solution

LLP

On-site Builders Merchant&

On-site Hire Facility

NEC3 Contract Options:• Option A – Priced Contract with Activity Schedule• Option B – Priced contract with Bill of Quantities• Option C – Target Contract with Activity Schedule (most common)• Option D – Target Contract with Bills of Quantities• Option E – Cost Reimbursable Contract• Option F – Management Contract• TSC – Term Service Contract• PSC – Professional Service Contract

Notes:

i) * NEC3 (PSC) Option E CE – Compensation Event to Olympic Park Design (OPD) Contractii) Contract values exclude VAT and contingencies

NOTES TO READER:The above map is based upon information gathered from Project Teams, the TES and the Procurement Board Report and represents all procurements apart from the following:

• Transport Procurements and Framework of Suppliers (available separately upon request)• Corporate procurements• Olympic Village packages• LOCOG packages• All other non-critical and/or below OJEU limit procurements

Document Owner: John Mead – Supply Chain Management

Key:

Contract No.

Contract Type

Approx Contract /

Budget Value

Awarded Supplier Name

Project/Procurement

NameBidder 1

Bider 2

Bidder 3 etc

NEC3 (C)

Buckingham Group

Building Services

Framework

General Builder Fit Out & common site

services

Modular Accom.

Framework

Lightweight Structures, Accom. & Event Solutions

Framework

Tennis Courts Hockey Pitch

TBA TBA

NEC3 (A) NEC3 (A) NEC3 (A) NEC3 (A) NEC3 (A)NEC3 (A) NEC3 (A) or Short FormNEC3 (A)

£7m £8m £6m £14m £9m £13m £8m £9m £1m £0.5m

M11 Works

TBA

P J Carey

9160

NEC3 (TSC)

BMX Supercross

Track

NEC3 (A)

£1m

TBA RapiscanReliance High-TechBarr

SPIE Matthew Hall

Imtech G&H Ltd (JV with

Scott Wilson)

Balfour Beatty Engineering

(HY) Ltd

MITIE Engineering

Services

£6m

NEC3 (A)

Design Services

Framework

Alto Seating Systems Ltd

Slick Seating Systems Ltd

Nussli Special Events Ltd

A&T Europe (Astral Pools)




John Sisk & Son Ltd

PJ Carey (Contractors)

Ltd

Jackson Civl Engineering

Ltd

Volker Fitzpatrick

Mansell Construction Services Ltd

Byrne Group PLC

PDavid Morley Architects LLP

Feilden Clegg Bradley

Studios Ltd

Mott MacDonald Ltd

S&P Ltd

8526

NEC3 (C)

WSP

WACO Modular UK

Ltd

ES Group Ltd

The McAvoy Group Ltd

Balfour Beatty Civil & Constn

Plant LtdES Group Ltd

Nussli Special Events Ltd

GL Events Owen Brown

Ltd

De Boer Structures (UK) Ltd

Skanska Construction

(UK) Ltd

Athletes Village - T1 Contractor Route Only (all other plots are CM – details within SCM Contractor Matrix)

Plot N02 Plot N09 Plot N10 Plot N13 Plot N26 Plot N14

JCT 2005 D&B

Ardmore Construction

Ltd

£48m

JCT 2005 D&B

£16m £45m

JCT 2005 D&B

£30m

JCT 2005 D&B

JCT 2005 D&B

£43m £33m

JCT 2005 D&B

John Sisk & Son Ltd

John Sisk & Son Ltd

Galliford Try Construction

Ltd

Galliford Try Construction

Ltd

P Elliott & Co UK Ltd

Bovis Lend Lease – Development Manager

Mansell Construction Services Ltd

B B

A

x

A = Eton Manor Sports Complex B = Basketball ArenaC = SPWUTD = RABE = Tansport Malls & Accreditation AreasF = Eton Dorney Phase 2 (Civils Works)

PPPPPPPPPP P

P Project works complete

B

8521

NEC3 (A)

Atkins(OPD)

TBA


P

A

BB

£3m

Name Restricted

Waterways Barriers

TBA

Radiological Detection

Name Restricted

TBA

£1m

Bovis Lend Lease

CM

£80m

Plot N01

JCT 2005 (as amended)

£70m


Bovis Lend Lease

CM

Plot N03

£71m

Plot N04

Bovis Lend Lease

CM



Bovis Lend Lease

CM

Plot N07

£82m


Bovis Lend Lease

CM

Plot N15

£75m

TBA

Polyclinic Plot 11

Bovis Lend Lease

CM

£25m

The AcademyPlot N12

£31m

JCT 2005 D&B

Bourne Construction Engineering

Ltd

£7m

Plot N25

JCT 2005 D&B

BAM Nuttall Ltd

P

TBA

Low Voltage Distribution

Network

£3.5m

EDF (Energy)

PA

A

A

A

A

Highways Barriers

TBA

TBA

TBA

Eton Dorney Phase 2

(Civils Works)

TBA

See Temporary

Venues Item F

<£5m

• Four railway lines

• Three major waterways

• Major roads and Greenway

• Five Park entrances

• 11,000+ Workers

• Welfare & accommodation

• Transportation around site

• Traffic flow and management - one vehicle through security every 6 secs

• 50% material transport by sustainable means goal

• 50% carbon reduction goal

Complex Logistics

Complexity 1 Programme

19 Major Projects

120 NEC3 Contracts (plus 1 Development Agreement, 184 JCT and 3 Concessions)

96 Tier 1 suppliers

869 Critical Tier 2 & 3 suppliers (Insolvency Risk)

4,400 Unique Design Interfaces

27,000 Integrated Plan Activities

1,520 Linked Activities

10,490 Site Workers (Daily Average)

529 Daily vehicle movements (materials)

2 Site entry points (plus rail head)

£7,300m Budget (average burn rate of £150m/month, peak £190m)

1 Key date - 27 July 2011

ODA’s Amended Version of NEC3

Contractually

• Request for Information (RFI)

• Combined Instruction &

Compensation Event

Operationally • Post Completion & Handover of

the Works Settlement

Agreement

Making NEC3 Work

Key Ingredients of Success • Early Warning

• Change Management

(Compensation Event Notices)

• Accepted Programme

Key Enablers

• People

• Training

• Clear & Simple Processes

• Organisational Model

text goes here

Common Processes and Collaborative Web-based Tools

Co e Co e c a ocess o C a t

Project Manager or Employer’s AgentContractor or Consultant

Early Warning(02)

Early Warning(02)Risk Reduction

Meeting

Combined Instruction &

Compensation Event Notice

(05)

Compensation Event Notice

(08)

New Event Identified

Quotation (10)

Response (11)

Revised Quotation

(10)

Response(11)

Acceptance (13)

Assessment (12)

No

Acceptable

Acceptable

Yes

Yes

No

PM Assessment

ReviseQuotation

CEN’s / Early Warning Module


Instruction / RFI Module


Change Management Process

Key: Red Font and Lines = PCM Module / Process

Request For Information

(25)

Request For Information

(25)



RFIs

EWNs

CI/CEs

Contract Manager

Some of the Dynamics Volume of Change and Risk

13,501 EWNs

6,362 CENs

24,723 CI/CEs

750 Tier 2 Accounts

90 Assurance Reviews

120 Contracts

96 Tier 1’s 1

17,648 RFIs

14,321 EWNs

7,394 CENs

26,665 CI/CE’s

850 Tier 2 Accounts

123 Assurance Reviews ( Data correct as of 23rd March 2012)

Olympic Park Delivery Strategy & Organisational Framework 1. NEC3 Contract Management:

Real Time

2. Supplier Management

• Tier 2 value for money

• Incentivisation

• Final account strategy

• Insolvency risk

3. Integration management

4. Contingency and risk management

5. Performance and control (cost, time)

Contract Management Framework

Delivery Management Framework O

lym

pic

Inte

grat

ed V

iew

Traditional View

Risk Management Framework

Performance

Management Framework

(Project Controls)

NEC and Commercial Close Out

Well defined close out process embedded

• ODA/CLM > Tier 1 > Tier 2

• Rigorous 3rd Party Assurance adopted

• Commenced early 2010

The contract (NEC 3) has ‘enabled’ risk reduction and facilitated early close out

Clients ‘Risk Profile’ has dramatically reduced

69% complete by value 17 weeks before Games (NEC Olympic Park Contracts)

NEC 3 Collaborative Contracting Generic Lessons

• Accepted Programme – regular updates, quality of information and staff capability - A.P versus a.p

• Defined Cost – must have clear definitions, recognise importance of Cost Verification

• EWNs – two-way process PM/Client and Contractor

• Defects – not unlimited liability

• Collateral Warranties - rigorous from Day 1

• Close Out – Start mid-contract

• Supply Chain – back-to-back Tier 1 and 2

• Resources – intensive to administer (all aware, but often ignored)

• Procurement, creates the start point only:

• doesn’t guarantee the required results

• too much one-dimensional thinking

• Administrative Burden (resource intensive but worth it)

• Lock down AFC after completion / takeover - quickly and collaboratively

• Need holistic approach to Commercial Management: Contract, Programme Controls, Delivery and Risk

• Right Governance and Assurance structure is vital

• Create common employer & supplier understanding (training & more training)

• Large quantities of change can be handled

• Works Information is key (build in flexibility)

NEC 3 Collaborative Contracting Client / Employer

• Disconnect between corporate and operational understanding of NEC3

• Need to improve quality of Quotations! Price of everything, Cost of nothing ...ability to truly understand cost build-up

• Greater recognition of ‘Client’ Funding demands

• traceability of costs

• visibility of decisions (particularly Tier 2 awards)

• Pre-completion takeover / handover management

NEC 3 Collaborative Contracting Suppliers

• ‘War Game’ simulation to model Tier 2 insolvency (Q3 2008)

• Greater intervention in Tier 1 selection activity

• All critical Tier 1,2,and 3 packages identified

• Financial stability continually reviewed

• Over 400 supplier change intervention

• ‘Up Stream’ vesting of critical items

• Accelerated delivery/site storage of high risk commodities

• Contingency plans developed for all high-risk, critical Tier 2 and 3 suppliers

• Step-in plans developed for Tier 1 and Administrator engagement

• Monthly Executive Governance regime established

NEC 3 Collaborative Contracting Following economic crisis in wake of Lehman Brothers’ collapse, we responded with:

Five Key Points 1. Procurement is less than 5% of the total commercial management challenge 2. Rigour in contract management is required on all aspects:

– Deliverables assurance – Tier 2 supply chain decisions (procurement and final accounts) – Variations – Cost verification

3. NEC Focus on the basics: EWN, CENs and Accepted Programme 4. Close Out Planning should start 12-18 months before works completion 5. Implement and invest in robust performance and risk management systems and

governance

Commercial Lifecycle – Key Learning

Procurement

Control & Governance – ‘Planning & Delivery Phase’

Contract Management Commercial Close Out

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