7 Supplier Engagement models
DBOM
Limited
Partnership
Limited
Partnership
Alliance
Date 14.06.12
Outsourcing
Traditional
Supplier
Engagement
Models
Engaging
Delivery
Partner
1
Summary of each of the 7 Models (1)
• Outsourcing: Lump sum fixed price whereby work is given to the market to
develop, design and deliver with option to extend to maintain and/or operate
(usually GRIP 2 or 3)
• Traditional: Lump sum fixed price whereby NR manages the design development
contract, the detailed design and construction contracts separately
• Engaging: Contractor(s) brought in at GRIP 4 (or earlier) on reimbursable basis
until risk and scope is defined enough to enable a target cost or lump sum fixed
price to be agreed
• Delivery Partner: Market partner is integrated into NR programme management
team at GRIP 3 (or earlier) in order to bolster skills and is targeted with operating
below opex target as well as incentivised (but capped) on all let contracts on
pain/gain basis
Date 14.06.12
2
Summary of each of the 7 Models (2)
• Alliance: Contractor(s) brought in at GRIP 4 (or earlier) on reimbursable basis until
risk and scope is defined enough to enable a target cost to be agreed. NR staff are
integrated into each contractor’s delivery organisation on ‘best man for the job’ basis.
Development, design and construction risk/opportunity is shared across the alliance.
All staff seconded into alliance are incentivised solely by the performance of the
alliance/programme. An Alliance can be expanded into a Programme Alliance
whereby some form of framework is established which enables joint performance
targets between separate parties
• Limited Partnership: This follows a similar approach to alliancing but usually
involves integration of multiple parties into a single legal entity. All staff seconded into
the partnership are incentivised solely by the performance of that entity within its
terms of reference
• DBOM Limited Partnership: This is an expansion of a limited partnership where the
entity would also maintain and/or operate the built asset over a fixed period of time to
an agreed budget, where all parties within the partnership share equitably the risk &
opportunity.
DBOM Alliance can also operate in a similar way outside of a legal entity
Date 14.06.12
3
CONTRACT VALUE
Selecting the Best Supplier
Engagement Model for each Project
•DBOM LIMITED
PARTNERSHIP
•OUTSOURCING
•LIMITED
PARTNERSHIP
•ENGAGING
•DELIVERY PARTNER
•ALLIANCE
•TRADITIONAL
Move by lowering
risk and/or raising
value by packaging
with other projects
BUSINESS RISK
Date 14.06.12
4