PROCUREMENT & SUPPLY CHAIN
Stratford said: “CP5 doesn’t start for 11 months. But we do have a definite aim to have most of CP5’s procurement sorted by the end of CP4. Already we have things like signalling frameworks, ETCS frameworks, professional services frameworks, level crossing replacement – they’re already in place. The way we’re going to engage with the supplier market is already in place.
“We don’t want a hiatus, or uncertainty in the marketplace – we want continuity at all levels – of expenditure, people’s employment, work teams, avoiding crazy redundancy packages.”
The new strategy also gives the four IP regions plenty of flexibility to develop their own policies and procedures, as long as they stick to the basic principles.
He noted that expenditure in the SBP for CP5 is 15% up on CP4, saying: “These are significant sums of money, and I think the marketplace is quite interested to hear this, especially with the other things that are going on around the country.”
Discussing CP5 more generally, McLoughlin said he doesn’t think benchmarking between countries works very well with systems as large and complex and with as many variables as railway networks. If the UK places more emphasis on safety (for example through lineside fencing), does that need to be taken into account when benchmarking against other countries? There are hundreds of such examples, making it difficult or impossible to get real value or meaning from simple comparators of overall network costs.
McLoughlin said: “It’s too difficult to do it at the whole-network level. We’ve had universities try to do this kind of stuff, but for one reason or another there’s always some party who says ‘it’s not right’.”
Safety
Safety is the “biggest priority” for Network Rail, which it drives home through its ubiquitous ‘everyone home safe every day’ messaging, its
50 | rail technology magazine Jun/Jul 13
lifesaving rules, and a focus on safe working behaviours and cultures to avoid the accidental incentivising of under-reporting or covering up incidents.
Stratford said: “‘Everyone home safe every day’ – what can we do with our contractors to try to ensure that? We’re looking to build it into our contracts where we can.
“I’ve not got all the answers; I don’t think any of us have, though we’ve all got lots of ideas: encouraging direct employment of staff; appropriate training; familiarity of staff with the sites they’re working on, and with the colleagues they’re working with; continuous use of teams rather than breaking them up and them having to re-learn things; using assurance processes sensibly and getting safety really embedded into the way we understand our contractors; ways of rewarding good and safe behaviours and practices.”
‘Fewer partners – closer relationships’
Network Rail IP has been focusing a lot of time and attention on supplier engagement as regards the upcoming spend programme and the workbank.
Stratford said: “We’re trying to lay it all out to the best that we know it. Let’s make it available now and have greater visibility of the work, to allow more efficient planning, better use of resources, working on behaviours without having to re-learn them in six months’ time. If we expect investment by suppliers into research, development, and innovation, we’ve got to give them not just visibility of the workload, but a feeling of confidence that it can be maintained. We can go a lot further with that than we have in the past.
“We want partners, not just suppliers; culture change and behaviour change. People who understand what we’re trying to do, so they can do it with us.”
A major part of this will be IP’s effort to work more closely and consistently with fewer suppliers.
Stratford explained: “We say fewer suppliers because we’ll be tendering for a lot of works like enhancement work and multi-disciplinary improvement works via frameworks over the whole period. So Region A might go through a tendering exercise and be looking to spend £2bn with just four suppliers over CP5. That sounds to me like a lot fewer suppliers bidding for things on a repetitive basis.
“But put your mind forward five or six years – if there was £23bn to spend, it would have been divvied up amongst contractors having bid repetitively and repeatedly over that period. The actual answer in terms of how many suppliers actually get work is probably very much the same.
“But there will be some contracts, borderline tier 2, tier 1s, who won’t be bidding for the first three years then getting some work at the latter end. They’ll be embraced by tier 1s early to be partners right from the start, and they get certainty of what they’re going to do, and don’t have to waste time and money bidding.
“The relationships are established earlier and are continuous rather than staccato.”
McLoughlin added: “There’s enough work for everybody. It’s going to expand if anything.”
Andrew English, commercial director at Skanska and an important member of the CDF, said: “Having the right people in the right place at the right time to respond to these is a real headache. The level of information coming out now is actually making a huge difference – don’t underestimate it.”
But he said it’s important that dates are stuck to: “We know we can’t price everything that’s in the pipeline. If a major opportunity is put back by months, it has a major impact.
“The amount of information coming out from the portal, the roadshows, makes a huge difference – sticking to it is important.”
www.networkrail.co.uk/aspx/113.aspx FOR MORE INFORMATION
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