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Matthew Steele

Commercial and Development Director

Procuring for CP6

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Introduction and context

Improving the way we work - IP operating model

CP6 procurement strategy

Objectives

The UK infrastructure market

CP6 renewals volumes, strategies and

procurement timetable

CP6 enhancements

CP6 strengthening our performance and capability

Engagement and supply chain relationships

Skills and agenda and workforce development

Partnership awards

Contents

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Network Rail is currently the UK’s largest infrastructure client, spending £7.4bn per annum.

This is likely to continue in CP6, however the market is expected to be bigger.

Devolution means that procurement and integrated category management strategies must

support Route Business objectives.

The way in which Network Rail is funded has changed:

Renewals included within SOFA

Enhancements progressively approved

Hansford/contestability

Introduction and context

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Improving the way we work - IP operating model

Efficient

Route focused

Deliverer closer to Supply Chain

Geographical economies of scale

Long term stability to enable localised investment

Swift workbank decision making

Collaborative – sharing of risks/incentives

Route/IP maturity -

relationship, commercial and

technical

Interpretation of specific

accountability models

Size of Route’s workbank

Current and future mix of

workbank

Current conclusions and next steps No clear preferred option for workbank allocation in terms of headcount impact

Highlighted potential areas for improvement within the relationships between Routes and IP

Now deepening understanding of who does what in Routes/IP and begin developing and

testing options

These are influenced by:

Priorities identified by the route:

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CP6 procurement strategy

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Ensure that the needs of the Route Businesses and passengers are met

by improving safety performance, demonstrating value for money and

allowing innovation to thrive.

Improve/reward safety and contract performance with a fair return whilst

addressing poor performance.

Incorporate lessons learnt from CP5 to promote a stronger performance

culture. .

Foster industry leading collaboration and support an effective &

sustainable supply chain.

Ensure that Network Rail remains a client of choice for key suppliers in a

growing market.

CP6 procurement strategy objectives

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The UK infrastructure market

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CP6 renewals anticipated supply chain spend

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CP6 renewals supply chain spend by category

£3,504 23%

£4,411 29% £1,669

11%

£607 4%

£796 5%

£960 7%

£294 2%

£654 4%

£2283 15%

Track

Signalling

Structures

Earthworks

Buildings

Electrification & FixedPlant

Total Drainage

Telecoms

Other

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CP6 renewals spend by route/region

Plus network wide: £4.8bn

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CP6 route/regional procurement strategies

Route IP Region CP6 contract strategy Forecast transition period

Anglia

Southern

New Anglia Route multi-discipline framework Q1 2019/20

South East New South East Route multi-discipline framework Q1 2019/20

New Wessex Route multi-discipline Q1 2019/20 Wessex

Western Western, Wales &

Crossrail

New multi-disciplined frameworks with greater focus on Tier 2s

and local supply base - subject to Excom approval Staged from Q1 2019/20

Wales New multi-disciplined frameworks with greater focus on Tier 2s

and local supply base - subject to Excom approval Staged from Q1 2019/20

Scotland Scotland and North

Eastern

New Scotland Route multi-discipline frameworks Q4 2018/19

London North East &

East Midlands New LNE Route Multi-discipline frameworks Q4 2018/19

London North West Central Exercise options to extend current multi-disciplined frameworks

in return for negotiated efficiencies, re tender one package Q1 2018/19

All

National Track

Programme

Combined plain line and S&C alliances – 2-4 alliances - subject

to market testing and board approval Q1 2019/20

National Signalling &

Digital Railway

3 tier strategy - currently under review to ensure DR are

adequately integrated - subject to board approval Q4 2018/19 to Q1 2019/20

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CP6 renewals procurement timeline

Jan-1

8

Feb-1

8

Mar-

18

Apr-

18

May-1

8

Jun-1

8

Jul-18

Aug-1

8

Sep-1

8

Oct-

18

Nov-1

8

Dec-1

8

Jan-1

9

Feb-1

9

Mar-

19

Apr-

19

May-1

9

Jun-1

9

Jul-19

Aug-1

9

Sep-1

9

Oct-

19

Nov-1

9

Dec-1

9

Jan-2

0

Feb-2

0

Mar-

20

Apr-

20

May-2

0

Signalling

Major Signalling Framework: CP 6 Procurement

Major Signalling Framework: CP 5 Option to Extend until May

2020

Track

North & South Alliances: CP 6 Procurement

Plain Track & S&C Frameworks: CP 5 Options to extend for up

to 5 years (2024)

Scotland North East

Multi-Discipline Framework: CP 6 Procurement

Multi-Discipline Framework: CP 5 option to extend to Aug 20

Central

Multi-Discipline Framework: CP 5 Extension Negotiations

Multi-Discipline Framework: CP 5 option to extend for up to 5

years (2024)

Southern

Multi-Discipline Frameworks: CP 6 Procurement

Multi-Discipline Frameworks: CP 5 extended to April 2020

Western & Wales

Buildings & Civils Framework: CP 6 Procurement

Buildings & Civils Framework: CP 5 awarded to May 2020 (can

be extended to August 2022)

CP 5 Coverage

Tender and Procurement

CP 5 Coverage

Tender and Procurement

CP 5 Extension Option

CP 5 Coverage

CP 5 Extension Option

CP 5 Coverage CP 5 Extension Option

Tender & Procurement

CP 5 Coverage CP 5 Extension Option

Tender and Procurement

Tender and Procurement

CP 5 Coverage

CP6

Commences

Key

Tender and Procurement

Award dates

Mobilisation

CP 5 Coverage (including implemented extensions)

CP 5 Framework extensions not implemented but available

Key

Tender and Procurement

Award dates

Mobilisation

CP 5 Coverage (including implemented extensions)

CP 5 Framework extensions not implemented but available

Subject to review and change

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CP6 enhancements

Enhancements: FID in CP6

• EML Capacity Improvements

• NWEP Phase 5

• ECML Traction PSU

• N.W. train Lengthening

• Bristol T.M. Station Capacity

• S. London HV Grid Upgrade

• Reading Independent Feeder

• Waterloo (Phase 2)

• Access for All funding

• East Coast Connectivity

• Ely Area Service Improvements

• Kings Lynn to Cambridge 8 Car

• Acton To Willesden Electrification

• Ely Soham/Syston Stoke

• Victoria Station Capacity

• Thames Valley B’Lines Elec

Committed Enhancements • Thameslink

• Anglia PSU

• West Anglia Main Line

• Midland Main Line KO1

• Tram Train Pilot

• Waterloo (Phase 1)

Enhancements: FID in CP5

• Leeds Station Capacity

• Garforth Station Remodelling

• East West Rail phase 2

• Gatwick

• N. of England (Manch. Picc.)

• Hope Valley Capacity

• GW. Electrification

• W. Rail Access to H’row

• Oxford Corridor Capacity Ph.2

• N. Cotswolds P’form length.

• W. of England P’form length.

• Bristol East Junction

• GWEP DNO’s Clearance Work

• W. Route Flood Resilience

Enhancements: design

decision in CP5

• Tranpenine Route Upgrade

Candidate schemes for funding consideration by DfT - as yet not confirmed

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CP6 strengthening our

performance and capability

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CP6 strengthening our capability

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Defining Allowable Costs & Fee

Dispute Avoidance Panels (DAP)

Rail Method of Measurement (RMM)

National Performance Metrics (NPM)

CDF Outputs incorporated into T&Cs

Standard Alliance T&Cs

Time-bar clauses

Provision for NR to issue substantial completion certificate

Provision for NR to issue final account certificate

ICC & NEC T&Cs

Removal of 5% accrual limit for interim payments

Standardisation of Preliminaries

New Schedule of Day-work Rates

Creation of Standard Sub-contracts – payment terms/PBAs

CP6 improving our commercial performance

Other Aspects Include:

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Key supplier working groups implemented:

National CDF

Strategic Supplier Interface Group

Tier 2 Interface Group

National SME forums

Greater use of RICA, RSG, CECA and RIA

Next stage: Route/Regional Supplier Groups

SAM process refocused and national supplier strategies

implemented

Upskilling Network Rail Commercial Management team through

‘One Vision One Way’

Alliancing best practice developed

Implementation of National Supplier Metrics

Website refresh including news, improved pipeline and contacts

Improving our engagement and commercial relationships

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CP6 skills agenda and workforce development

Our CP6 Procurement Strategy will be focusing on

contracting and delivering this target.

Contracted diversity targets

Better representing the population and communities

which we serve

Contractual requirements under review

One apprentice for every £3m of spend

In 2016 Network Rail signed up to the target of training one apprentice for every £3m of

spend with our supply chain on contracts over £10m. (aggregation applies)

This target was not fully contractualised in CP5, but we want to make significant

improvements in our collective apprenticeship and training rates in the next year.

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The next 6 months

Feb 2018 Supplier Survey

June 2018 National Supplier Conference

and Partnership awards

Dec - Mar 2018 Regional Supplier Forums - SNE (Dec)

- Central (Jan)

- Southern (Jan)

- Western (Mar)

Jan - Jun 2018 Procurement commences

in stages

March 2018 Website refresh

Nov 2017 Completion of CP6

deliverability reviews

Dec - Feb 2018 Approval of Gateway 2 Procurement Papers

at Excom (Track and Signalling outstanding)

Feb 2018 National Supplier Conference

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Thursday 7 June 2018, The Vox, Birmingham

• Back by popular demand after a two year break

• 15 categories to enter, including new awards

• An independent judging panel

• An opportunity to win prestigious “Supplier of the Year”

• Further details will appear on www.railpartnershipawards.com

in the next couple of weeks

• We will email you details of how to enter

• Good luck!

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Putting our priorities into action:

Ensuring plans in place for CP6

Robust cost and efficiency plans

Agreed renewals plans with routes

Supply chain mobilised and ready for transition

One Vision One Way

Our people

Finally…