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Strategy and Commercial Model. Rob Harries-Harris. Date: February 2014. 2. Agenda. Key Principles Governance Best Athlete Approach Effective Planning and Control Commercial Model Contractual Architecture Collaborative Management Plan. 3. Guiding Principles for DDP.
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Strategy and Commercial Model Rob Harries-Harris Date: February 2014 2
Agenda • Key Principles • Governance • Best Athlete Approach • Effective Planning and Control • Commercial Model • Contractual Architecture • Collaborative Management Plan 3
Guiding Principles for DDP • 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 • Effective planning and control at the heart of delivery • Supply chain innovation • Construction expertise during client design • Delivery integration
Client / ContractManagement Decommissioning Division Safety / Commercial Financial / Intelligent Customer DDP Board DecommissioningProgramme Partner Sellafield Programmes DDP Lead Partners Independent CostScrutiny DDP Management Group Work Allocation OtherSellafieldAlliances /Contracts DDPDelivery SLSelf-Perform Governance
DDP Umbrella Agreement Decommissioning Division (Client) DDP Board Sellafield Programmes DDP Lead Partners DDP Management Group Work Allocation OtherSellafieldAlliances /Contracts DDPDelivery SLSelf-Perform Best Athlete Approach
Delivering Improved Performance Effective Planning and Control SPI CPI SPI CPI SPI Phase 3 Phase 1 Phase 2
Effective Planning and Control Asset Performance and condition/level of risk Future Demand Client strategies Baseline Work Programme Optimised Work Programme New Issues e.g. resilience Client Specifications Risk
Annual Work Programmes Other Activity Schedules Accelerations & Carry Over Optimised Work Programme Annual Work Programme Incentives Through Work Current Risk Level Emergent Work Funding
Commercial Models • Fixed Fee modified annually in light of annual work programme (for costs not associated with project execution) • Project Execution • Target Cost • Cost Reimbursable • Fixed Price
Incentive Model • Four levels of incentives: project, programme, fee and annual work programme • Limited project incentives immediately available to Delivery Partner • Greater part of project incentives attributed to programme-level fund • Programme fund shared with Delivery Partners on annual basis. Fund moderated by KPIs: • Customer service & Relationship/Integration • Socio-Economic/SME Performance, Capacity/Capability Improvements • Innovation • Delivery on Time • Delivery on Cost • Delivery to Quality • Health, Safety and Environmental Requirements • Adherence to DDP Processes • KPI Performance will also moderate Fee and Annual Work Programme
Sellafield Ltd. Delivery Partners Existing Supply Chain New Supply Chain Contractual Architecture Delivery partner access to / management of SL supply chain Work packages Umbrella Agreement Delivery partner access to / management of SL supply chain Collateral Warranties Work packages Work packages
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