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SAFESPUR – April 2008 AWE - SUPPLY CHAIN OPPORTUNITIES Tony Morris - Head of Procurement

SAFESPUR – April 2008 AWE - SUPPLY CHAIN OPPORTUNITIES Tony Morris - Head of Procurement DD: 0118 9850130; m: 07810 191863. The Contract Organisation Expenditure Patterns Project Examples Future Developments. PRESENTATION OUTLINE. AWE Aldermaston. AWE Burghfield. THE AWE SITES. MoD.

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SAFESPUR – April 2008 AWE - SUPPLY CHAIN OPPORTUNITIES Tony Morris - Head of Procurement

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  1. SAFESPUR – April 2008 AWE - SUPPLY CHAIN OPPORTUNITIES Tony Morris - Head of Procurement DD: 0118 9850130; m: 07810 191863

  2. The Contract Organisation Expenditure Patterns Project Examples Future Developments PRESENTATION OUTLINE

  3. AWE Aldermaston AWE Burghfield THE AWE SITES

  4. MoD Golden Share Licence ofPremises,Plant andMachinery Contract with MoD AWEML Board delegates AWE plc to perform the contract. AWEML does not employ any staff AWE Management LimitedJoint Venture Company Equal Shares BNFL Lockheed Martin and Serco 100% Ownership Other Stakeholders including regulators and the LLC AWE plc Executive Board All AWE staff The Company

  5. MOD - AWE ML CONTRACT • 10 YEARS; NOW 25 YEARS • “…. whilst giving the contractor scope to manage the support areas in a way that allows the full range of commercial decision making to be applied.”

  6. Output Driven, M&O Target Cost Incentivised Fee Firm 5 years, Fixed 10 years Restrictions: IPR, Parent Co, Liability Legacy funding separate Assets owned by MOD SUMMARY OF CONTRACT

  7. Incentivised on performance with annual review of measures (self assessment) Regulatory requirements incorporated in contract Basis of the contract is to “Run the Business” MOD interface through the NW Integrated Project Team (IPT) SUMMARY OF CONTRACT

  8. FUTURE INVESTMENT “Alongside the modernisation of our conventional forces, as set out in last year’s White Paper, the Government remain committed to maintaining the effectiveness of the nuclear deterrent, including making the necessary investment at the Atomic Weapons Establishment, Aldermaston, and to keep open the options for a successor to Trident until a decision is required, probably in the next Parliament.” • Defence White Paper • 21 July 2004

  9. AWE Business Management & Finance Major Projects Research & Applied Science Systems Engineering Stockpile Management Assurance Infrastructure

  10. Core Services/ Strategic Sourcing Delivery Teams • Project Strategies within defined options • Project Deliverables • Contract Management • Optimal Purchasing within architecture • Order Management • Expediting • Receipting • Variations Roles Materials • Cross Business requirements • Sourcing • Purchasing Agreements • Supplier Relationship • Supplier Performance • Corporate Strategy • Supplier Relationship • Supplier Resourcing • Incentivisation Strategy Facilities DSM/ DRAS/ DSE Support DTES DI DMP Roles Engineering and Construction Performance Management Policy, Process Procedures, Performance Measurement, Analysis compliance, Audit Contract SupportContract Engineering, Templates, Models, Dispute Resolution, Legal Support, Audit, Review Procurement Organisation

  11. Organisation Chart Head of Procurement Tony Morris Major Projects Support Category Management Engineering & Construction Category Management Materials & Services Procurement Performance Management Operational Directorate Delivery Procurement Manager Derek Morrison Tel: 50118 Procurement Manager Nigel Lowe Tel: 501120 Procurement Manager Mark Allen/Peter Isaac Tel: 54927 Procurement Change Manager Mark Allen Tel: 54915 Procurement Manager Fiona MacGowan Tel: 54925

  12. SUPPLIER SEGMENTATION H AWE Suppliers List £8K  £1k LH (151) HH (36) Strategic Value LL (847) HL (85) L L H £250k Financial Value

  13. Key Supplier Categories • 80 strategic suppliers including the following categories: • Engineering and Construction • Design Houses • Facilities • IT/Telecoms • Consumables • Training /Universities • Temporary Staff

  14. Contract Modular Architecture PRISM 1 Instructions to Tenderers PRISM 2 The Project Specific Requirements PRISM 3 AWE Standard Requirements PRISM 4 Information to be returned with Tender PRISM 5 Contract Terms & Conditions Industry Forms GC/Works 1&2 • Industry Forms • NEC • Industry Forms • IChemE AWE Modular 1. Professional Services AWE Modular 2. People AWE Modular 3. Product AWE Modular 4. Product & Site Services AWE Modular 5. Purchase Order T&Cs

  15. 1 Professional Services 2 Non AWE Staff 3 Products 4 Products & Site Services 5 PO Terms & Conditions Articles of Agreement & General Conditions 1 to 35 Default Conditions Annexes A to L Annex M Programme Early Warning Compensation Defects/ Inappropriate Supply EVM Annex M Annex M Programme Early Warning Compensation Defects/In-Supply Tests Issued Property Long Term Support S/W Licences Imports/Duty Annex M Programme Early Warning Compensation Defects/In-Supply Plus clauses for “Products”

  16. Programme to 2019 £20-25m pa Planning / Characterisation design Safety documentation Modular containment / HVAC Size reduction / Cutting operations Waste / Environmental monitoring Waste Disposal (RA / Haz / Non-Haz) DECOMMISSIONING LEGACIES

  17. D7 - Tritium A1 - Pu Gloveboxes A50 - Pu Gloveboxes A37 - Demolition A25 - Demolition / clearance R61 - On hold, pending demolition DECOMMISSIONING CURRENT PROGRAMME

  18. Questions?

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