Strategy and Commercial Model
Rob Harries-Harris
Date: February 2014
2
Agenda
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•
•
•
•
•
•
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
Governance
Decommissioning Division
Client / Contract
Management
Safety / Commercial
Financial / Intelligent Customer
DDP Board
Decommissioning
Programme Partner
Sellafield
Programmes
DDP
Lead Partners
Independent Cost
Scrutiny
DDP Management Group
Work Allocation
Other
Sellafield
Alliances /
Contracts
DDP
Delivery
SL
SelfPerform
Best Athlete Approach
DDP Umbrella Agreement
Decommissioning Division
(Client)
DDP Board
Sellafield
Programmes
DDP
Lead Partners
DDP Management Group
Work Allocation
Other
Sellafield
Alliances /
Contracts
DDP
Delivery
SL
SelfPerform
Work Allocation/Reallocation
Need Identified
Learning
From
Experience
Master Plan
Sentencing
Master Plan
Make Buy
Assessment
Delivery using
SL in-house
resources only
Make Only
SL
Sanction
Process
Not Req’d
Optioneering
Against Criteria
Buy Only
or Make & Buy
Delivery using
one or more of:
SL
Sanction
Process
Required
Business Case
Acquisition
Strategy
Business Case
Not Approved
Business Case
Approved
Delivery partner
Delivery Partner’s
supply chain
SL in-house
resource
SL Supply chain
Delivering Improved Performance
Effective
Planning
and
Control
SPI
Phase 1
CPI
CPI
SPI
SPI
Phase 2
Phase 3
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
Optimised
Work Programme
Other
Activity Schedules
Accelerations
& Carry Over
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
Contractual Architecture
Delivery partner access to / management of SL supply chain
Existing
Supply Chain
Work packages
Umbrella Agreement
Delivery
Partners
Work packages
Work packages
Delivery partner access to /
management of
SL supply chain
Sellafield
Ltd.
New
Supply Chain
Collaborative Management Plan
Collaborative
Management
Plan
(Operating Model)
Programme
Management
EHSSQ
Commercial
People & Culture
ICT
Operations &
Delivery
Annual Work
Allocation Plan
Programme
Governance
Strategic
Capability Plan
Security Plan
LFE & Knowledge
Management Plan
Audit Plan
Programme Risk
Mitigation
Technical
Management
Design
Management Plan
Contract
Management Plan
Tactical Make v
Buy & Allocation/
Reallocation Plan
Document
Control
KPI Management
Health and safety
Plan
Supply Chain
Strategy Plan
Training
Management Plan
Quality
Management Plan
Risk and
Opportunity Plan
Socio-Economic
Plan
Environmental
Management Plan
Benefits
Realisation Plan
Communications
Plan
Reporting Plan
Works planning
and execution
Resource
Management Plan
Cultural
Development
Plan
Commissioning
Project controls
Stakeholder
Management Plan
Dose
Management Plan
Information
Communications
and Technology
Plan
Construction
management Plan
Emergency
Response Plan
Handover
Management Plan
Business
Continuity Plan
Disclaimer
Important Information
• This communication and its contents have been provided to you for informational
purposes only. This communication is not advice on or a recommendation of any kind
with respect to the matters described herein, including without limitation, contracting
structures, contracting instruments, contracting strategies, related legal and
commercial issues or any combination of such matters. This communication does not
offer advice.
• No information contained herein constitutes an offer or solicitation by or on behalf of
Sellafield Ltd to enter into any contractual arrangement. Sellafield Ltd. makes no
representations or warranties, express or implied, regarding the accuracy, adequacy,
reasonableness or completeness of the information, assumptions or analysis
contained herein or in any supplemental materials, and Sellafield Ltd. accepts no
responsibility or liability in connection therewith. Opinions expressed in this
presentation are subject to change without notice.
15
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Strategy and Commercial Model