Constructing Excellence Andover North Site – Initial presentation

1. Constructing ExcellenceAndover North Site – Initial presentation Bucknall Austin – Prime Solutions 25th March 2004

2. Introductions • Tony Brown – Bucknall Austin – Project Director • Scott Stewart – Defence Logistics Organisation – Assistant Project Manager • Bob Atkinson – Thomas Vale – Construction Cluster Leader • Clifford Martin – Percy Thomas – Design Leader

3. AGENDA • Background/introduction to Prime Contracting • Andover North Site Project – description • Delivering the Project as a Virtual Company • Supply chain integration – best practice • Innovations • Benefits and achievement • Lessons Learned • Continuous Improvement

4. Drivers for Change in the Construction Industry? • Latham Report • Egan Report • industry must change • clients must change • Building Down Barriers • Lean Construction Programme • Accelerating Change • Smart Procurement + Prime Contracting

5. Why Prime Contracting • Lowest price rarely gives good value. • Encouraging Partners to provide innovation by being incentivised. • Output based specification – allowing Industry to display ‘Buildability’ and innovation through Design, Construction and Compliance. • Focus on Whole Life Costs • Prime Contractor required to fully engage the supply chain from the outset

6. How we Responded to the Challenges to Encourage Innovation • We started from a clean sheet of paper • Team assembled from like minded organisations • Workshops with our supply chain & Warwick /Tavistock • Built on Abbey Wood and SW Partnering • Developing a new Process map for the whole team • Harnessing Best Practice • Developing the ‘Virtual Company’ approach

7. Andover North Site - Scope • New Build Facilities (£40m Construction Costs) • 186,000 sq ft of high quality offices for 780 • 45,000 sq ft of tank maintenance facility • 41,000 sq ft of mess facility with 68 live-in members • Ancillary buildings (gatehouse, nursery, sports facilities) • 600 car parking spaces (34 acre site) • Scope includes maintenance of building fabric and engineering services for 7 years after completion

8. 3 D VISUALISATION

9. FM PM/QS Architect Bucknall / SEC Bucknall PercyThomas Prime Solutions M&E Services SEC Services Engineer Client ANSR/ DE HLP/ Halcrow Thomas Vale URS Construct Facility 2 Structural Engineer Pearce Hyder Construct Facility 1 Infrastructure Design The Andover Core Team

10. Partnering Environment – A Culture of Collaboration Team Focus – A Lean Approach Ring Fenced Margins Improve Quality Optimise Through Life Cost Focus on Innovation Share Risks & Rewards Attack Waste, Improve Efficiency Incentivise Whole Supply Chain Creating the ‘Virtual Company’ Approach

11. Core Team developed: The Brief in response to Strategic Brief the Target Costs KPI benchmarks for Cost, Time and Quality Client participates fully in Project and Design meetings Aligning objectives The Project Charter Single Project PII The Integrated Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Developing the ‘Virtual Company’ Approach

12. Aligning objectives The Project Charter Single Project PII The Integrated Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Developing the ‘Virtual Company’ Approach

13. Aligning objectives The Project Charter Single Project PII The Integrated Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Single Policy for the duration of the Construction and Compliance period Fitness for Purpose Focus is on the Project, not individual positions Developing the ‘Virtual Company’ Approach

14. Aligning objectives The Project Charter Single Project PII The Integrated Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Spells out the working relationships for the Core Team Sits alongside the back-to-back Contracts Empowers the ‘Joint Steering Committee’ Details the Pain/Gain Share between team members Developing the ‘Virtual Company’ Approach

15. Contracts and Partnering Agreements The Project Charter CLIENT The Prime Contract PRIME CONTRACTOR SUPPLY CHAIN Back-to-Back Contracts The Integrated Project Agreement (IPA)

16. Aligning objectives The Project Charter Single Project PII The Independent Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Single profit for the whole Team Designers share in Risks and Rewards Focus is on the project, not individual positions Supports no blame/no claims culture All parties have vested interest in success Developing the ‘Virtual Company’ Approach

17. MOD 70 % Bucknall Prime Solutions 30 % Design Team 13% Cluster Leaders 57% Bucknall Austin 30% Cluster Leader Pearce 22% Cluster Leader Thomas Vale 10% ClusterLeader SEC 25% Architect PTP 7% StructuralEngineer URS 2% M & EEngineerHLP 2% M & E Engineer TME 1% Infrastructure Engineer Hyder 1% Developing the ‘Virtual Company’ Approach Pain/Gain Sharing Model The WHOLE Core Team have agreed shares of the benefits/pain of Cost under-runs and over-runs across the whole project, not for individual parts. No one party has a majority.

18. Aligning objectives The Project Charter Single Project PII The Independent Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools All parties paid at the same time – no cash flow lag Each application signed-off by Prime Contractor and Client Ensures full compliance with Construction Act throughout the Supply Chain Everyone benefits Developing the ‘Virtual Company’ Approach

19. Aligning objectives The Project Charter Single Project PII The Independent Project Agreement Core Team share in Risks and Rewards Project Bank Account Technology tools Web based extranet Collaboration tool All parties benefiting from access to best practice Client web cam All parties connected electronically Developing the ‘Virtual Company’ Approach

20. The Collaboration tool – enabled ‘Virtual Collocation’

21. Client Web Cam captures the Structural Integrity Test

22. Innovation • Electrical wholesaler on site • Just-in-Time • Costs ‘open book’ • Prefabrication Workshop • Controlled environment • Continuity of work • 90% of first-fix done in advance • Site kept Tidy and safe

23. Innovation Benefits – Environmental Issues • Buildings designed from the inside out for flexibility and to minimise end user costs • Building fabric assists in cooling • Low energy light fittings – individual sensors on each light fitting, no switching • Truly demountable partitions • Dual flush toilets • Heat Pumps in lieu of chillers

24. Innovation Benefits – Environmental Issues • Recycling demolition material • Minimal import/export of material • Materials from sustainable sources • Maximised retention of trees

25. Innovation Benefits – Environmental Issues • Collaboration tool – less paper approach • Recycling maximised • Low labour-intensive construction techniques • Advance Planting orders • Integrated transport systems • On-site cycle and pedestrian routes linked to local transport infrastructure • Energy monitoring via BMS • Excellent BREEAM rating achieved on offices, very good on other buildings

26. Bucknall Innovation Benefits – Health & Safety • Pro-active approach to H&S issues • HSE involved in developing our approach • Safety at top of the teams agenda • 100% inductions – everyone given induction prior to commencing any works • Trend analysis developed • Site Awards for safety Scheme Featured in HSE News

27. Innovation Benefits –Value Engineering Savings £ k 2000 1500 1000 500 0

28. Innovation Benefits – Average Annual Running Cost Savings £ k PA 400 350 300 250 200 150 100 50 0

29. Lessons Learned & Continuous Improvement • Peer Reviews • Site suggestions/awards • Site magazine • Joint Steering Committee reviews & actions • Post – Award /Completion Reviews • Recommendations for improvements made to DE • Innovations adopted on other projects • MOD, Internal and Industry Conferences • On-going Customer Satisfaction surveys

30. Project Successes • Comprehensive, Pro-active approach to Health & Safety and Environmental issues • Handover achieved on Time, within budget • Recognised by Industry Peers • BIFM PFI/PPP Project of the Year 2002 • Finalists for the Building ‘Contractor of the Year’ • Used as a blue print by Defence Estates for new Contracts • Featured in new Informa Book ‘Partnering & Collaborative Working’ • Sets a new standard for collaboration and teamwork

31. The Client’s View of Team Achievements • Collocation – Virtual/Real • Collaborative Working • Open minded approach by both Client and Partners • Value Engineering/Right first time/Just in time etc. • On Time • On Budget • Meeting the Strategic Brief Result – Client Satisfaction…..

32. High quality and low running costs Users delighted with the facilities Ongoing monitoring of performance Innovations and KPI’s continue in ‘Compliance’ Period Client Feedback

33. Longer term business Getting what they need Improved risk management Improved certainty of delivery Best Value capital cost Improved profitability Risk focus – contractors’ objectives aligned Increased efficiency Reduced year on year revenue expenditure Reduction in waste Increased reliability & functionality of facility Non-adversarial supplier relationships Benefits Everyone Wins Industry Benefits Client Benefits

34. Demonstrating Our Ongoing Commitment • Key members of the Andover Team have come together to form a new Joint Venture Company to continue to deliver successful projects and improve the process Novus Solutions

35. The Novus Solutions Team

36. The new development

37. The Office Building

38. The Office Building

39. The Technical Building

40. Warrants Officers and Sergeants Mess

41. Landscaping

42. QUESTIONS