Case Study

Question 1

Being a consultant from AtkinsRealis, how did you manage any conflicts of interest?

Answer 1

• Looked to identify if any Atkins colleagues were working are had the ability to influence the projects I was working on.
• No confilcts identifed.
• Regularly reviewed to see if any party to party conflicts had developed.

If I had identified a confilct:

• Inform Client immediately.
• Remove myself from the project.
• Client insists I progress despite conflict: informed consent and information barrier, with regularly reviewing the controls in place.

Question 2

How was the 10% contingency calculated? Why didn’t you undertake a formal risk analysis?

Answer 2

I advised the Client to undertake a formal risk analysis in line with indsutry guidance.

However, being planned renewals risk was relatively low and extensive inhouse benchmarking data existed.

Benchmarking against similar schemes, identified a 10% allowance being the standard approach.

Question 3

Given the works exceeding the budget, how did you manage Client expectations?

Answer 3

I ensured to reiterate to the Client that due to their increase in scope, the existing funding was insufficient and additional funding would be required.

To try and reduce the funding requirements, various value engineering options were considered such as incorporating other works alongside the UPS installation.

Question 4

You mentioned the use of value engineering, what are the stages to this?

Answer 4

The RICS Value Management and Value Engineering guidance note, lays out 5 stages:

1 information gathering
2 creative thinking
3 analysis, evaluation and shortlisting
4 development
5 presentation

Question 5

What potential savings could utilising the internal delivery team have provided?

Answer 5

Unit rate was £4K less per site, a saving of £28K across the 7 sites.

As well as significantly reducing the PM time required for contractor management.

Question 6

How long would a procurment outside of the framework have taken?

Answer 6

Anywhere between 5 - 9 weeks:

1. Preparation of Tender Documents: 1-2 weeks
2. Advertisement and Invitation to Tender: 1 week
3. Tender Submission Period: 2-3 weeks
4. Evaluation of Tenders: 1-2 weeks
5. Award of Contract: 1 week

Question 7

What did you consider when suggesting a procurement outside of the framework?

Answer 7

Potential benefits:

• New innovative solution.
• Competition amongst suppliers resulting in cost savings.

Potential Drawbacks:

• Governance for by passing the framework.
• Time delays as a result of the procurement process.

Question 8

What governance and assurance would be required for bypassing the framework?

Answer 8

• Procurement and sourcing strategy
• Conflicts of Interest
• Justification for bypassing the Framework.
• IR35
• Value for Money
• NR Procurement Executive Panel.

Question 9

What could be the consequences for bypassing a framework?

Answer 9

Claims from the framework supliers.

Fines from the Crown Commercial Services

Question 10

How would you have assessed supplier quotes?

Answer 10

I would have assessed them against NR internal benchmark rate and the current supplier’s rate.

Have suppliers’ price against a pricing document in the format of RMM to ensure comparison on a like for like basis.

Support from the engineer on the technical delivery aspects of the tender returns.

Ensure to assess tender returns against the clearly set out award criteria as explained to bidders.

Question 11

What was the cost implications of on boarding a team of digital experts for the new commercial reporting?

Answer 11

From discussions in the background with the Digital Innovation Lead from Atkins I gave a broad outline of what needed to be developed to improve the current reporting systems and some of the key Client requirements.

From this discussion, Atkins informed me they would require a meeting with the Client to fully understand their requirements and that such an activity depending on its exact complexity would take two members of the digital team roughly two weeks to develop.

This would come to an approximate cost £10K depending on exact requirements.

Question 12

How long did it take you to devlop the new reporting system?

Answer 12

Developing the system alongside my role, took roughly two months.

Question 13

What additonal benefits did the commercial reporting system provide?

Answer 13

Categorisation of cost data according to RMM to be utilised for benchmarking on later schemes.

Question 14

How would you conduct stakeholder engagement on future projects?

Answer 14

1. Identify the key project stakeholders early on.
2. Establish format of communication.
3. Develop engagement plan.
4. Regular interaction and feedback ensure stakeholder requirements are fully understood and achieved.
5. Provide stakeholders with updates and take on board their feedback.

Question 15

What actions could NR take to ensure performance of the subcontractor?

Answer 15

Use of liquidated damages, assessing loss to be incurred by Client. Difficult to assess but could be in relation to cost incurred for delaying the reopening of the railway:

• Possessions
• Rentals need to be extended.
• Battery recharging
• Warranties extension required.

Other mechanisms such as KPI’s for performance against program and this impacting work reallocation under the framework.

Question 16

Why was the funding for the project insufficient?

Answer 16

Due to an underdeveloped business case and poor records on plant and equipment, additional works were added to the scope resulting in funding being insufficient.

Question 17

How do you prevent the issues of an under developed business case on the South UPS project from reoccuring?

Answer 17

As part of the process for securing the additional funding we engage in a lesson learnt workshop. During this workshop, I emphasised the importance of having a fully developed business case to prevent the need for additional funding at a later date. Also, on have clearer records on the condition of existing plant and equipment.

Question 18

How did you calculate the internal preliminary cost on the South UPS project? And how did I ensure it was sufficient?

Answer 18

I took the current hourly rates for the PM and Engineer and using the Consumer Price Index adjusted the 2023-24 rate for the next two financial years, percentage adjustments were 6.43% and 8.32% respectively.

I made an allowance for both staff at 20% utilisation for the contracting period and calculated the internal preliminary cost accordingly.

Actual expenditure against forecast was monitored on a periodic basis to ensure project spend was in line.

Stage Amount Months Monthly
Original £ 41,000 8 £ 5,125
Revised £ 58,000 27 £ 2,148
Final £ 168,000 12 £ 14,000

There was an issue with insufficient funding being secured for the preliminary cost when the first amount of additional funding was secured and as a result the departments OPEX took a hit.

Question 19

What were the different funding allocations to the South UPS project?

Answer 19

Original Budget - £581,000
Current Budget - £1,730,000
Final Budget - £3,389,900

Question 20

What were the key components of the RAM’s business case?

Answer 20

• Scope of Woks and Volume being Delivered.
• Commerical proposal: unit rate & pounds in the ground.
• Business justification for the works.
• Options considered for the delivery of the works.
• Programme
• Efficiency Oppurtunities

Question 21

How did you advising different delivery options show value was being delivered?

Answer 21

One of the sections of the business case was focused on showing the different options considered for the delivery of the works.

Comparing the different delivery options in terms of advantages, disadvatnages and value showed that continuing with the current subcontractor was delivering value.

Question 22

Aside from advising delivery options, how else did you support the RAM’s business case?

Answer 22

I advised on the projects unit rate for delivery of a UPS and how this compared to NR’s benchmark.

I also provided pounds in the ground metrics.

Question 23

Was your time as the projects Commercial Manager not part of the internal preliminary costs?

Answer 23

Normally on a project, the Commercial Manager’s time would be part of the projects preliminary costs, however the way NR operate Commercial cost are covered by a seperate budget and therefore did not need to be included in my preliminary calculations.

Question 24

How would option 2 - internal delivery have reduced Contract Administration cost?

Answer 24

Approximately half on the additional preliminary cost, £84K related to the PM time. With the internal team carrying out delivery this could have been halved, providing a saving on £42K.

Question 25

What were the RAM’s key priorities in delivering the project?

Answer 25

• Value for money but also cost certainty
• Timely delivery

Question 26

How did you ensure the RAM’s priorities were meet in the development of their business case?

Answer 26

• By considering multiple delivery options and the asscoiated costs I was able to ensure the chosen option was delivering value.
• Impact on time was considered when comparing the different options.

Question 27

You adivsed on 4 different delivery options, what was the total cost for each different option?

Answer 27

Option 1 - £320k
Option 2 - £1.5 Million higher contingency allowance of 15% was required.
Option 3 - Was not priced, timing was considered to big of an issue for the option to be developed.
Option 4 - £1.6 Million

Question 28

Option 2 - internal delivery would likley have been cheaper then your choosen option, how then did you justify proceeding with option 4?

Answer 28

• Risk of change at a later date.
• ## Internal team did not have readily available resource so works would have been delayed.

Question 29

Why are NR using bespoke contracts? / What beneifts does a bespoke contract offer?

Answer 29

Consistency and Clarity: Bespoke contracts provide NR more consistency and clarity on key issues, making it easier for suppliers and contractors to understand and work with the.

Risk Management: These contracts allow for a sensible allocation of risk between NR and their suppliers, which helps in managing and mitigating potential risks more effectively.

Efficiency: By aligning their contracts with industry norms and best practices, Network Rail aims to save management time for both themselves and their suppliers when setting up and managing contracts.

Specific Needs: Bespoke contracts can be tailored to meet the specific needs of different types of projects, whether they involve simple works or complex, multi-million-pound infrastructure projects.

Question 30

When would you advise on using a bespoke contract as oppossed to sandard form?

Answer 30

Complex Projects: When a project is highly complex or unique, standard form contracts may not cover all the specific needs and risks involved. Bespoke contracts allow for detailed customization to address these complexities.

Multiple Parties: If there are several different parties involved in the project, a bespoke contract can better accommodate the unique roles, responsibilities, and relationships between these parties.

Specific Requirements: When the project has specific requirements that standard contracts do not address, such as unusual funding arrangements, unique end-user needs, or specific performance criteria.

Flexibility: Bespoke contracts offer more flexibility to include terms that are specifically tailored to the project’s needs, which can help prevent disputes and ensure smoother project execution.

Cost Considerations: In some cases, using a bespoke contract can save costs associated with purchasing and modifying standard form contracts.

Question 31

What are the risks with using a bespoke contract?

Answer 31

Time and Cost: Drafting a bespoke contract can be time-consuming and expensive. It often requires significant legal input to ensure all aspects are covered, which can increase project costs.

Lack of Precedent: Bespoke contracts may lack the legal precedent that standard form contracts have. This can lead to uncertainties in interpretation and enforcement, potentially resulting in disputes.

Complexity: Bespoke contracts can be complex and difficult to understand for all parties involved. This complexity can lead to misunderstandings and misinterpretations of the contract terms.

Increased Risk Allocation: There is a risk that bespoke contracts might unfairly allocate risks to one party. For example, contractors might be pressured into accepting risks that are better managed by the client, such as unforeseen ground conditions.

Question 32

What benefits did the use of a framework provide NR?

Answer 32

Not needing to conduct a full procurement proccess every time goods or a service is required provides substantial time and cost savings.

Suppliers on a framework are likely to provide more competative rates and improved service due to long term relationship.

Question 33

Why was a design and build approach selected as oppossed to the traditional method?

Answer 33

• Overlap design and construction providing time savings.
• Buildability and risk of change reduced.
• Single point of contact reducing risk and providing cost savings for management time.

Question 34

What was the payment mechanism on the project?

Answer 34

Fixed price, completed quantities against activities in the BoQ.

Question 35

Why was a fixed price contract the choosen approach?

Answer 35

1. Clear scope of works - change was unlikely.
2. Limited Variables
3. Timely completion required.

Question 36

How did you balance the development of the new commercial system along with your current work commitments?

Answer 36

• Priorities the key task
• Delegate some tasks
• Manage client expectations around timescales for delivery of the new system as I had to balance with my current duties.

Question 37

Why did NR develop GRIP?

Answer 37

• The unique nature of the rail industry meant a product driven management framework was required to tackle the industries challenges.
• Allows for the risk minimisation and mitigation.

Question 38

How is supporting the business case development achieving level 3?

Answer 38

Project Finance - supporting development of the funding strategy and assessing risk of the other delivery options.

Quantification - pricing internal staff cost and make inflation adjustment. Advising contractor on use of RMM for BoQ production and reviewing the return.

Procurement - advising on procurement options and potential benefits. Outside of the framework would have been a single stage falling under the traditional route.

Question 39

How is implementing a new commercial reporting system achieving level 3?

Answer 39

Project Finance - advising on the establishment of new reporting regimes.

Commercial Management - advising of benefits of a new system and importance of accurate cashflows to be reported to senior levels. Aiding in management actions being implemented.

Question 40

What were the issues with current commercial reporting and how would they have impacted the projects?

Answer 40

• Inaccurate accruals
• Missed costs from the forecast
• Errors in Cashflow and cost to complete
• Audit on project reporting would have highlighted issues such as poor accruals with minimal substantiation.
• Funding issues only being realised late meaning issues only being resolved reactivley as oppossed to proactively as they are developing.

Question 41

How have the commercial reporting issues now been resolved?

Answer 41

Integrated PO trackers and labour booking trackers mean all accruals have the relevant substantiation in place automatically.

Automation of data editing removes chance of human error and cost being missed ensuring more accurate cashflow forecasts and cost to complete.

Accruate reporting means issues are highlighted straight away and can be dealt with proactively.