PROCUREMENT & SUPPLY CHAIN
“These are signifi cant sums of money, and I think the marketplace is quite interested to hear about this.”
i
“We looked at our top suppliers, top consultancies and design houses, and brought them together to develop and inform a distinct approach to commercial issues and innovation. It wasn’t Network Rail telling them what we wanted; it was opening up items for debate and seeing where there was scope for improvement.”
The CDF is working on common performance metrics for the industry, working with Crossrail Ltd and London Underground; looking at using peer group pressure to raise overall and average performance; and improving and regularising contractual issues like disallowable costs.
It has already achieved successes like the removal of the old rule that the default level of retentions would be 3%, down to zero; agreed a policy on the effi cient use of parent company guarantees; incorporated sustainability issues within a revised tender evaluation process (more on page 83); achieved BS 11000 certifi cation for collaborative working; been instrumental in the creation of Network Rail- suppler alliances such as the ones in place for Stafford, the Hitchin Flyover and London Bridge; and has agreed to pilot the use of the NEC3 contract model.
Blakey explained: “We had our own iterative forms of collaborative contract – we’d never tried to make use of a mainstream and recognised form like NEC3, so we’ll be doing
Fair Payment Charter
The Fair Payment Charter itself cuts standard payment terms on new contracts from 56 days to 21, and commits the signatories to pay their own subcontractors within seven days of receiving payment, a move praised by Cabinet Offi ce minister Francis Maude MP.
Blakey said: “That takes payment from 120-150 days to an aspiration, from certifi cation, of 28 days. That’s a huge industry change.
“Also written in and signed was that if the main contract between Network Rail and the tier 1 [contractor] was 0% retention, that’d be mirrored in their relationship with sub- contractors, unless there was a specifi c risk.”
The pledges made in the Fair Payment Charter are not retrospective, nor are they a fi rm ‘rule’ – it’s a voluntary regime. This has annoyed some tier 2 contractors, as explained in detail in the Dec/Jan 2013 edition of RTM, as many feel they are still being mistreated over payment and terms by tier 1s.
Blakey admitted: “It’s fair to say that it wasn’t a guillotine moment and the world’s now completely different. But the [payment] trend
More stories like this at:
www.railtechnologymagazine.com/ awards-contracts-appointments
that. We’ve also opened the doors of our senior leadership programme for industry colleagues. Those are all specifi c outputs of the CDF.”
is progressively shortening.”
He said he wanted to change the old adage about Network Rail – ‘they take a long time to pay, but you know you’re going to get paid’ – to ensure the organisation is seen as being among the best clients and the speediest payers.
CP5 contracting strategy
McLoughlin admitted that Network Rail has “learnt a lot” since its 2008 decision to defer some major track works, which had a big impact on its suppliers and the market generally. Its CP5 contracting strategy has been developed in a much more collaborative way.
National supply chain director Guy Stratford commented on the major changes in Network Rail from the fi rst time he worked for the organisation, soon after it took over from Railtrack, returned.
versus now since he recently
He said: “What a difference 10 years has made! That’s largely been driven by the real understanding that exists now within Network Rail that if we deal differently with our suppliers, providers, contractors, and actually listen to what they have to say and deal with them in a genuinely collaborative way, not just as a fancy word, there is value to be had from that.”
Continued Overleaf > rail technology magazine Jun/Jul 13 | 49
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