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Rob Harries-Harris

Keith Gibson

Update on Previous Event and Recap on Socio-Economic/SME Agenda

Date: February 2014

Agenda

• Update on Oct 23rd Event (Rob)– Questionnaire– Feedback from RFI responses– Guiding Principles for DDP– Scope of DDP– Operating Model

• Recap on Socio-Economic and SME Agenda (Keith)

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Questionnaire - Your Messages to Sellafield• Success factors

– Clarity - communications, vision, deliverables, visibility of work

– Collaboration - early contractor involvement, integrated team

– Effective planning and programme management

• Designing DDP– Match delivery responsibility to scope and capabilities (of partners and supply chain)

– Number of partners - fewer instead of more: 1-6 suppliers/supplier groupings

• Duration – a 5-10 year agreement is preferred

• Incentives– Annual, tiered scheme with pain and gain

– Balanced scorecard

– Element of reward through work

• Transition– Don’t rush, aim for about 6 months

– Integrated team must create and own the transition plan

RFI Feedback

• 54 Downloads, 7 Responses (5 from SMEs)

• Broad support for our strategy with qualifications:– SME Agenda

• “Hard for SMEs to break into market”

• T2 tend to dominate and “grab work for themselves”

• Is there a need for a “Champion” for SMEs within the Client Management Team?

• Tendering (even mini-competitions) is a heavy burden for SMEs

• Need “best athlete” allocation process to maximise flexibility

• SL and T2s “should commit a minimum of 25% of work to SMEs”

• “Assess suppliers on how they intend to behave” (but “base your assessment on real customer feedback, not written submissions”)

– Other Issues

• Consider the use of a separate Lot for specialist suppliers (e.g. Demolition)

• Transparent and shared working practices, and clear and open communications are essential

Guiding Principles for DDP

• Safety is non-negotiable• Time, quality are SL’s next highest priorities, but not at any cost

– In general Sellafield needs earliest delivery of project schedule• Maximise number of work-fronts, parallel working

• Minimise critical path density

• Variable value transition point

– Sellafield environment introduces unforeseen delays and project changes

• Active management of bottlenecks

• Minimise impact of change, maximise agility

• Resilient organisations

• Ways of working based on:– Best athlete commercial arrangements

– Resource mobility

– Common goals

– Trusting, but not cosy, relationships

– Best practice without a nuclear premium

• Partner Capabilities– Programme management at the heart of delivery

– Supply chain innovation, often through SME involvement

– Construction expertise during client design

– Delivery integration

Guiding Principles for DDP

DDP Scope

• Project Execution*– Decommissioning

• front-end characterisation

• decontamination

• manufacturing and installation of plant and equipment

• dismantlements and removals

– Demolition• building and structural surveying

• demolition of structures

• waste segregation

– Asset care

– Operational and maintenance support activities

– Waste streaming

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* examples for illustrative purposes only

DDP Scope

• Three main areas of capability in addition to project execution:– Consultancy Support

• strategic optioneering for hazard reduction

• technical advice on fuel recovery and sludge management

• technical and working practice innovation scanning

– Resource Augmentation• construction, commissioning, project management, organisational transitioning,

commercial management

– Other Services• front-end design support, depending on value transition point

• strategic planning, implementation planning and co-ordination

• some procurement activities

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Delivery Requirements

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Scope/ProgrammeDecom. Central

PMOPFSP FGMSP MSSS PFCS SR&DP

Project ExecutionDecommissioning, Demolition, Asset care, operational and maintenance support activities

▼ ▼ ▼ ▽ ▼

Consultancy Supporthazard reduction optioneering, fuel recovery, sludge management, technical/working practice innovation

▽ ▽ ▼ ▼ ▽ ▽

Resource Augmentationconstruction, commissioning, project management, organisational transitioning, commercial management

▽ ▽ ▼ ▼ ▽ ▽

Other Servicesfront-end design, strategic planning, implementation planning and co-ordination, procurement

▽ ▼ ▼ ▽ ▽

Operating Model

DDP Umbrella AgreementNDA / ONR / DECC / HMT

Decommissioning Division

DDP Board

SellafieldDDP

Lead Partners

DDP Management Group

OtherSellafield

Alliances /Contracts

DDPDelivery

Work Allocation

Independent CostScrutiny

DecommissioningProgramme Partner

Client / ContractManagement

Safety / CommercialFinancial / Intelligent Customer

SLSelf-

Perform

Socio-Economic and SME Agenda

Keith Gibson

Building on a foundation of Sellafield community engagement

• TEXT REMOVED FOR UPLOAD ON TO WEBSITE

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The Socioeconomic issues for Sellafield Ltd

• Sellafield Ltd spends c £1bn p.a. in the supply chain from a total of £1.8bn and is looking to maximise community benefit returns

• Strengthening procurement/contract management processes to emphasise socioeconomic deliverables (based on ODA, EdF principles)

• Developing specific socio economic priorities/expectations and a Responsible Procurement Plan linked to Sellafield future business needs

• Collaboration with suppliers and local community to co-ordinate delivery v agreed outcomes

• Changing traditional concepts of socio economics

• Improving management of long-term key resource/skills/supplier service constraints

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Strategic Theme Development

Education, Skills, Training & EmploymentSME & Local Business Growth

Community Well-Being

Sellafield Socioeconomic Objectives

Sellafield Outcomes & Targets

Sellafield Commitments Supplier Commitments

Community Benefits

Responsible Procurement Philosophy

Focus on high value areas

1. Local business engagement strategy

2. Support local people into jobs

3. Provide training so that people are safe and competent

4. Contribution to community growth and development as per local plans

5. Create economic advantage, improved environment or way of life

6. Education investment to support Science, Technology, Engineering and Maths in schools and for young people

• Prioritise creation of business and community value

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Embedding Strategy into Supply Chain

M&O Obligations

SL Strategy & Priorities

Acquisition Strategy

Market Engagement (Messaging)

Tender Evaluation Criteria

PQQ (Restricted)

ITT

Contract Terms & Conditions (Enforced Performance Deliverables)

Golden Thread

PCR Compliance

Statutory Obligations & Policy

DisclaimerImportant Information

• This communication and its contents have been provided to you for informational purposes only. This communication is not advice on or a recommendation of any kind with respect to the matters described herein, including without limitation, contracting structures, contracting instruments, contracting strategies, related legal and commercial issues or any combination of such matters. This communication does not offer advice.

• No information contained herein constitutes an offer or solicitation by or on behalf of Sellafield Ltd to enter into any contractual arrangement. Sellafield Ltd. makes no representations or warranties, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information, assumptions or analysis contained herein or in any supplemental materials, and Sellafield Ltd. accepts no responsibility or liability in connection therewith. Opinions expressed in this presentation are subject to change without notice.

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