Case Studies Of Net Zero Procurement Action Plans

Case Studies Of Net Zero Procurement Action Plans Presented by: Mr. Russell Date: 28 November 2022 What I Will Be Talking About - A bit about me - Why is an action plan important? - Case studies - driving a net zero action plan under an existing contract: - • Surrey • Oxfordshire Further resources Why Is An Action Plan Important? - Procuring Net Zero Construction, Kings College London • "Clients and consultants should lead and manage the implementation of net zero carbon objectives under new and existing construction contracts, including through the agreement of net zero carbon action plans with binding timetables." • "If net zero carbon objectives are not converted into improved practices through agreed 'action plans' with binding timetables, then current inefficient procurement practices will hold us back." Surrey County Council : Operation Horizon Case Study: Operation Horizon - 5-year Capital program - Objective is to repair 10% of the road network - cost estimated to be approximately £120m, but only £100m available - Seeking a 15% saving by adopting a 5-year program + other benefits - Program within scope of existing term contract, but: • At tender stage, contractors do not have full visibility of the services they will be required to deliver • - Limited involvement of the supply chain at an early stage when planning works Opportunity to secure improved prices and other benefits once a program of work has been developed - Open and transparent process leading to genuine cost reduction - Project Timeline: • EU procurement process leading to appointment of Kier under 10- year term contract February 2011 • Business case to Cabinet for program March 2012 • Joint planning and design with Kier June 2012 • Tier 2 supply chain processes leading to appointments of Marshall and Aggregate Industries September 2012 - • Development of integrated project teams November 2012 • HMEP Strategic Peer Review November 2012 • Commencement of construction phase April 2013 Outcome of procurement exercise • Contract Discount (12%) • Value Engineering (4% - 8%) • Improved whole life value • Improved quality control • Improved apprentice commitments • Lean programming • Environmental benefits - Operation Horizon Five years on • 12.5% savings achieved of total budget (some elements of work not eligible for discount) • 76% of schemes with 10-year warranty, 22% with 5–8-year warranty • Since 2013, only 4% of schemes have required any remedial work • No health and safety incidents • Environmental innovation - treatment of tar bound roads reduced costs of treatment from £140/t to £60/t • Won the Constructing Excellence Award for Collaborative Working • Improved customer satisfaction Case Study: Oxfordshire Background - Oxfordshire County Council and Skanska were in a term maintenance contract, used to deliver reactive and routine maintenance activity, Capital renewals and new infrastructure below the OJEU works limit. - The contract was awarded to Atkins on 13 Jul 2010, subsequently acquired by Skanska on 4 October 2013. The contract was for 10 years from 1 April 2010, with up to a further 10 years' worth of potential extension linked to performance. The annual value of the contract is approximately £40m - Due to extensions either awarded or revoked, the contract was due to end on 31st March 2023, and there were a further 2 years of extension available up to March 2025. - Expected to transfer to M-Group Services Ltd as part of a divesture of its highway maintenance services on 31st April 2021. A Commitment To Improvement - Both parties felt that the partnership was performing well, but that there was an opportunity to deliver improvements - Oxfordshire and Skanska committed to work together to identify opportunities, with joint project teams tasked with developing proposals for a specific element of the improvement program - The parties agreed to use FAC-1 so that opportunities to capture improved best value would be formalized. This agreement would be finalized before an extension is agreed and would cover the last three years of the contract if extended. Benefits Achieved - The main benefits identified include: • Greater programme certainty and collaborative works planning • Different methods of construction and materials - • Refinements to process and ways of working • Carbon consumption reductions • Skills and Training enhancements. It is expected that the initial benefits will include financial savings to the council, of a minimum of £250k revenue pa over the 3-year period of the FAC. - The contract extension, including the improvement plan and the use of FAC-1, was formally approved by Oxfordshire's Cabinet in April 2021. Collaborative Planning - Joint exercise across Skanska, their Supply Chain and OCC - Series of Workshops to identify opportunities to combine different work streams and routine operations across geographies and year of delivery - Maximizing program efficiency to drive down cost - Workshops to take place prior to the start of the 21/22 Financial Year, followed by regular reviews throughout the year Carbon Reduction - Key highlights included: • Suite of low carbon design solutions and associated Action Plans • Development of Partnership Carbon Reduction Strategy and associated Action Plan Creation of Whole Life Cost & Carbon tool • Focused training on lower carbon alternative materials • Trials of new lower carbon materials • Calculating carbon baselines for schemes to identify 'Hotspots'