The Socioeconomic challenge
focusing particularly in the
SME challenge
Ron Gorham – NDA’s Head of Supply
Chain Optimisation and SME Champion
NDA strategy is to create a healthy
vibrant, dynamic, affordable and
innovative supply chain to support
our long term mission which requires
alignment with all levels of the Supply
Chain and with our numerous
Stakeholders
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“Health of the Supply Chain”
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The objectives of the study were to
understand…
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The impact of NDA Supply Chain Development Strategy & initiatives
– Including approach to Collaborative procurement
•
The impact of increased concentration of spend on a small number of
Tier 2 contractors
•
The health of the SME community
•
The potential impact of nuclear new build
•
Why some major contractors are not currently participating in the
NDA Estate Supply Chain
Where possible, comparisons made with 2008 consultation
Our Approach
Tier 3 / 4
OnLine
Smaller Tier 2
Top 30 Tier 2
Large
potential
28 interviews
with 27
suppliers
7 interviews
134 current, potential & lapsed
suppliers
Teledepth 43 interviews
Face to
face
Impartial review undertaken by ORC and V4 including conclusions and
recommendations
It’s hard to build relationships in the estate, but
once established they can be very rewarding
Rewards
Secure work stream
Interesting work
Enhanced Reputation
Limited competition
Drawbacks
Waiting for work
Information bottlenecks
Cost of tendering
Skills shortages
Resistance to innovation
Relationship with SLCs
Barriers
PQQ process
Size of projects
Risk
Lack of consistent
procurement in the
market
Next Steps:
Act, and act soon
•
Change is needed to achieve the NDA’s strategy and meet
HMG’s targets
•
The level of co-operation from the supplier community indicates
a desire for change on their part
•
Conducting such a significant programme creates an
expectation of change
•
It takes time for changes to make a difference and to be seen
to make a difference
•
Full report will be published shortly
Socioeconomic challenges
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Each SLC requires the support of
our local stakeholders to operate
• Energy Act places an Socioeconomic obligation on NDA which
we flow down to each SLC
• Each SLC should consider the Socioeconomic aspects in its
acquisition strategy and approach
• West Cumbria is one of NDA’s priority regions
• Socioeconomic obligations requires us and the SLC’s to
procure sensitively
• NDA and Sellafield have invested significant resources in
Socioeconomic development
• There are significant socioeconomic challenges with some of
the current Sellafield contracts – particularly the DSA
• The Governments “Growth agenda” also has socioeconomic
opportunities
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SME challenge
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HMG’s challenge
•
Increase the proportion of HMG spend with SME’s to 25% by the
end of the current Parliament
•
Departments and NDA required to set a stretching target and plan
to meet the challenge
•
Target intended to reflect the benefits that SME’s bring to the UK
economy including:
– Growth
– Value
– Innovation
– Performance
– Fit for Purpose solutions
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NDA’s Target and Plan
•
•
•
•
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20% of the Estate spend with SME’s by 2015/16
Applies to NDA, its wholly owned subsidiaries and the SLC’s
Requires the support and help if the entire Supply Chain but
critically the Tier 2 contractors
Many of our interventions are already underway:
– Standardised and simplified PQQ’s
– Single Estate portal – Contracts Finder
– Standardised and simplified “Flowdowns”
– National and Regional Supply Chain Events
– SME steering committees
Two components to our plan
– Data collection
– Challenging our existing approaches
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Current situation
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•
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NDA plan and target published
Self assessment against the 7 “Conditions for Success” suggests
we are at Amber
Good plans and progress but material challenges
Payment problems for SME’s are a particular issue
Each SLC is required to submit its plan and target by the end of
June
Current projects suggest that we are at 11% across the Estate
Routine DECC Ministerial and Cabinet Office reports
NDA represented within HMG
Routine progress reports will be published and discussed.
Significant SME and Localism overlaps but a material challenge to hit
our target
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