Minutes

Meeting name Subject Attendees – All Day Attendees – By Invite Market Engagement D&B Packages Peter O’Dowd, OPDC 10:00 – 11:00 BAM Nuttall Ltd Ben O’Neill, OPDC Meeting Date Time , OPDC 30 August 2018 10:00 - 17:00 11:00 – 12:00 Costain Location Project name AECOM Aldgate Tower Old Oak Common , AECOM 13:00 – 14:00 Morgan Sindall

AECOM project number Prepared by 60567089 OPDC & AECOM 14:00 – 15:00 Hochtief

15:00 – 16:00 Volker Fitzpatrick

16:00 – 17:00 Buckingham Group Contracting

Introduction

To inform OPDC’s Major Civils procurement strategy for the development of the Western Wedge, OPDC and AECOM undertook an early market engagement exercise with 6 Tier 1 civils contractors. The purpose of this engagement exercise was to: (i) Gauge the level of market interest in the project; (ii) Gain feedback on our work package structure/size; (iii) Understand how the market would engage with SME’s; (iv) Discuss how the market propose to leverage supply chain expertise; (v) Discuss appetite for Novation to Master Developer; (vi) Discuss approach to interface management; and (vii) Understand how best to procure a supplier.

The meetings were designed to be an open forum for discussion, with both sides able to freely discuss the scheme and contract types without prejudice.

To inform the discussions, AECOM prepared a Strategic Infrastructure Briefing Note for Civils Contractors (OOC-ACM-000-XX-RP-ZZ- 00002) setting out the type of work involved in the various work packages. This was issued to the Contractors prior to the sessions.

Both OPDC and the Contractors signed Non-Disclosure Agreements (NDA). All information discussed in these meetings and within this set of minutes are to be considered COMMERCIALLY SENSITIVE. The details contained within this set of minutes will form part of the OPDC Business Case submission for the Housing Infrastructure Fund (HIF) funding.

All meetings began with a presentation (Old Oak North, Infrastructure for Growth) introducing OPDC, the Old Oak North scheme, setting out OPDC’s bid for HIF monies and the current thinking on commercial & delivery structures (shown in Appendix A). The key questions provided to the Contractors before the sessions were also highlighted as a point for further discussion.

This set of minutes is not prepared to highlight further actions to note. It is provided as a record of the key points raised and discussed during the meeting.

The Contractors were invited to provide written responses to the questions posed by OPDC and provide any further comments they may have on the construction durations anticipated and the constructability of the Civils Infrastructure work planned.

BAM Nuttall Ltd (10:00 – 11:00)

• BAM Nuttall Ltd were represented by and

• BAM Nuttall Ltd confirmed they would be very interested to deliver the project and the scheme fits well within their corporate strategy.

1 Minutes Market Engagement

• The size of the scheme is well within the capabilities of the business and BAM Nuttall Ltd have experience of delivering projects of a similar scale.

• BAM Nuttall Ltd advised that while splitting the contract into smaller lots may enable smaller contractors to bid for packages of work and open up competition, this may not necessarily lead to better value for money. They indicated that this is for a variety of reasons including that:

─ The number of potential tenders is greater (although the quality and number may not be as expected due to suppliers needing complex rail understanding for the bridges and underpasses); and

─ There will be an increase in client project management costs as a result of managing multiple contractors.

• Bam Nuttall Ltd recommend OPDC employ a model similar to the development at Kings Cross.

• BAM Nuttall Ltd favour a two-stage Design & Build (D&B) approach. They feel this is a sensible method to manage risk transfer and provide Early Contractor Involvement (ECI). OPDC raised concern around the use of two stage D&B due to the lack of competitive tension during the agreement of price during the second stage. BAM Nuttall Ltd noted that this can be overcome by Open Book tender submissions from the Tier 2 suppliers. They would prefer to get involved pre-planning and would prefer to manage the RIBA 3 stage. Under a two-stage D&B they would consider some form of schedule and cost pain/gain agreement.

• They have a good relationship with statutory undertakers and are used to working with developers.

• They favour a delivery partner to manage stakeholders. They also note that there is a risk should the Cargiant site begin re- development during construction of the Western Wedge as there would then be potential for two tier 1 development partners in the same area which would require engagement between the two.

• They undertook site clearance on the Olympic Park and would look to bring this experience to this project’s needs for on-site earthwork remediation. They have experience in dealing with unexploded ordinance and can advise on all site investigations.

• BAM Nuttall Ltd are committed to working with SME’s and are working to remove the barriers that prevent SME’s from becoming involved with large contracts and organisations.

• They recommend OPDC undertake ECI (either through two stage procurement or Pre-construction Service Agreements) so that they can use this opportunity to encourage and promote early supply chain engagement with suppliers.

BAM Nuttall’s written response can be found in Appendix B

Costain (11:00 – 12:00)

• Costain was represented by

• From a civil contracting perspective, Costain are not interested in tendering for the civils work in Old Oak North.

• Costain have a tight corporate structure which restricts civil contracting work to very large framework type contracts over multiple years with guaranteed/regulated funding, such as those with Transport for London (TfL), Highways England (HE) or Network Rail. A scheme of this size would be considered too small with too short a lifespan.

• Costain advise including Key Performance Indicators (KPI) on both programme and costs.

• Costain does not undertake work with developers. They are sector based with their main two sectors being highways and rail. They do not have a building/developer sector.

• They are looking to transform their business model into an equal split between construction and consultancy/smart infrastructure and currently have 300 people working in this area. In addition, they have setup a Research & Development team with 400 people employed. They currently employ approximately 4000 staff.

• They would not look for any opportunity for a D&B contract and would not consider novation. They are looking to position themselves as a delivery integrator.

• They own their own large supply chain academy with over 1000 people inside the M25 boundary alone.

• They have significant experience on Early Contractor Engagement schemes as well as schemes for National Grid and Network Rail and interfacing between large complex stakeholders.

AECOM 2 Minutes Market Engagement

Morgan Sindall (13:00 – 14:00)

• Morgan Sindall was represented by and .

• Morgan Sindall confirmed that they are interested in the scheme but noted that this interest is based on the anticipated cash flow burn rate. Less than £100-150M a year and their interest would reduce.

• Morgan Sindall noted a preference to tender for a place as a construction partner rather than being part of the supply chain so that they can assist in equitable risk allocation, programme and interface issues and give accurate advice on cost to complete as opposed to tender price.

• Morgan Sindall noted that they are more interested in the works being contracted in one package rather than multiple.

• The civils works proposed would fit well with their current business model.

• They feel that there would be potential for financial wastage on Package 1 (Park Road infrastructure) due to rework of connections into developers’ plots if the option 2 delivery model was taken forward.

• They would look to tender for the scheme as a central bid led by their highways MD and with the support of MD’s from other departments.

• They are currently on TfL over/underground frameworks and contracts for HE and Network Rail.

• Small and Medium-sized Enterprises (SME) are supported by Morgan Sindall through their supply chain. They understand the obligations on supporting SMEs set out by the Mayor of London. They look to support local workforces within the projects they undertake and understand that this importantly injects money back into the local economy.

• The risk profile of a scheme is an important factor in their decision on whether to tender for a scheme. For instance, they would not accept uncapped liabilities.

• They have experience in working on asset protection agreements.

• They mentioned the ICE Project 13 Model As a proposal for collaborative or Alliance type working

Morgan Sindall’s written response can be found in Appendix C

Hochtief (14:00 – 15:00)

• Hochtief was represented by .

• Hochtief are interested in the scheme however, are more interested in the works being contracted in one package rather than multiple. They would prefer one package as this approach reduces potentially complicated liability agreements between contractors / stakeholders.

• They would look to engage with SMEs through their supply chain and they would be interested to understand whether a policy on using SMEs will be developed by OPDC.

• Hochtief noted that the Civils Package 1 could be split into a highways package and a bridges package however, they do not see value in this.

• They advised that if there are elements of concern/challenge within the civils works (such as Park Road Underpass) then a requirement of demonstration of capability to deliver (Box Jacking) should be included within the pre-qualification requirements document.

• The level of work to deliver a tender for a D&B can reach costs of £1M. It is important for them to ensure they are tendering for the right schemes at the right time.

• They understand how the quality of the team they submit within their tender is important to the Client and advise that a workshop with the proposed Contractor team and the Client during the tender period would be useful.

• They suggested that alliancing may be a suitable model to combine the different needs of Client, Contractor, Designer and Developer contractually to work towards a common goal. Alliancing was used previously by Southern Water with success.

• There was discussion around the best way to contractualise risk and ensure an acceptable risk transfer between the Client and Contractor.

• They do undertake work with private developers.

• They are a Network Rail contractor and have experience with asset protection.

AECOM 3

Minutes Market Engagement

Appendix A

Commercial Structure Thinking and Preferred Delivery Strategy

AECOM 5

Minutes Market Engagement

Appendix B

BAM Nuttall Written Response

AECOM 6

Strategic Infrastructure Package – Old Oak North

Early Market Engagement

2. In your experience, would splitting this contract into smaller contracts/lots stimulate greater competition and deliver better value for money? Splitting the contract into lots may enable smaller contractors to bid for packages of work for which they would not otherwise be able to bid. This would open up a wider range and number of contractors. However, this may not necessarily equate to better value for money due to: • The number of potential tenders is greater, although the quality/number may not be as expected due to suppliers needing complex rail understanding for the bridges and underpasses. • An increase in client project management costs as a result of managing multiple contractors such as: o Costs of tendering multiple packages (for contractors and client)

o Interfaces across civils infrastructure

o Possession management contacts with NR/London Overground – they typically want single point of contact with established Tier 1 contractor

o Co-ordination with network provider and power/energy coordinator

o Coordination with third party interfaces and temporary traffic arrangements

o Great programme management and contractor interfaces – holistic management

o Increased commercial, safety and quality resources for multiple lots

o Increased management of handover co-ordination/novation’s/warranties

Benefits of a single contractor: • Single point of contact for stakeholder interfaces for consistency to build a positive working relationship with, such as: Local Authorities (Schedule 7, S61, Road closure etc), Environment Agency (extraction and discharge licences, etc), HSE (F10), Canal and River Trust, TfL, Network Rail, London Overground.

• Continuity of knowledge and best practice for delivery and for coordination of communication and programme

• Larger contractors have established apprenticeship and procurement schemes to support local employment. Smaller contractors may self-deliver through non regional teams providing no opportunity for local companies/resources or training upskilling local people.

• Easier access to specialists both internally and from supply chain to add value through a collaborative approach assuring most innovative/sustainable solutions especially effective in a two stage ECI approach to mitigate project risks

• With reduced number of packages gives the ability to balance resources

• Easier to co-locate contactor and client teams for collaboration – consistent behaviours

• Efficient use of heavy lifting equipment and purchasing power

• Network Rail are likely to have one contact to integrate possessions, T-minus planning and asset protection requirements.

Page 2 of 6

Strategic Infrastructure Package – Old Oak North

Early Market Engagement

3. How do you propose to engage directly with SMEs? SMEs are already a significant part of our supply chain network of specialist suppliers. BAM Nuttall awards more than 55 per cent of their work to smaller subcontractors (based on a Cabinet Office figure from 2013). We have BAM LINK for established supply chain relationships, which sets out rules of engagement supporting both parties in delivering projects together. Queen Elizabeth Olympic Park Transformation: During delivery of the works over £9.5m was spent in local boroughs. This figure included labour. Spend was monitored during monthly meetings with the customer, LLDC. Removing barriers for SMEs We have identified several barriers which prevent SMEs from becoming involved with large contracts and organisations, including: • Cash flow

• Available resource / capacity

• Skills (access to training, qualifications and accreditations)

SMEs may not have the same capacity to wait for payment as larger companies. As we are committed to prompt payment of all our suppliers and subcontractors, we agree payment terms suitable to their needs – frequently significantly less than 30-day intervals. Onerous contractual terms can also be a barrier, particularly if a company has no dedicated resource to deal with extensive tenders, or the experience to compete with the standards of tenders from larger suppliers. To ease this pressure, we support SMEs in the process of getting onto our company vendor accord list. Once they have been added to this list, procuring more work in the future is made significantly easier. This is managed through the ‘Builders Profile’ which is free to use for our suppliers. We also offer to train supply chain in contract types if they are unfamiliar with the administration involved. Supplier engagement days In advance of large projects, and regularly at company level, we hold supplier engagement days to maintain relationships with existing suppliers, and have the opportunity to meet suppliers we have not previously worked with. The engagement days help suppliers to understand key objectives and learn how we can collaborate to meet the challenges ahead, which helps them to plan resources and identify any shortfalls in training well in advance. Support to gain training and accreditation Encouraging the development of SMEs is vital to long-term success, and we see all SMEs as part of our integrated team and encourage SME colleagues to take leadership roles. On our projects, we train SME employees to the same level as directly employed staff, including in health, safety and wellbeing, and they are afforded the same opportunities to gain NVQs and other qualifications which can be gained through the BAM Academy. We also offer external training such as Infrastructure 21, the CECA-supported supply chain training scheme, Construction Industry Training Board (CITB) courses and Leadership Worker Involvement Toolkit (LWIT), an education tool for SMEs developed by the HSE. We support supply chain partners to deliver services to our standards, with a focus on helping SMEs to attain the right accreditations. If SMEs

Page 3 of 6

Strategic Infrastructure Package – Old Oak North

Early Market Engagement

struggle to make the investment required by changes in legislation, we work with them to reduce the cost impact of making upgrades. We use coaching through trade supervisors and team members to help subcontractor staff learn and develop, which helps increase confidence in a subcontractor’s capabilities. SMEs are more engaged through shared process ownership, and the project then benefits from their local knowledge and support. Supporting SMEs to meet H&S requirements In addition to support in training and accreditations, we also act as mentors to our SME supply chain. We offer guidance and help to further develop their all-round competence and H&S systems by assisting in writing risk assessments and method statements, enhanced health and safety training and joint reviews of health and safety practices.

4. How will you leverage expertise in the supply chain? Established Supply chain and Procurement We have an established supply chain of companies who perform consistently well for us and who share our culture and expectations (known as BAM LINK). We appreciate, however, that we must always be able to demonstrate best value in our supply chain to our customers. As such all supply chain partners are subject to a robust procurement analysis and competitive market testing. This ensures that we can bring in the supply chain expertise required during early stages of a project, but can also provide the best value/ cost for our customers. Early Engagement We would recommend to OPDC an early procurement route which enables us to encourage and promote early supply chain engagement with our suppliers. This approach works really well with two stage procurement, ECI or Pre-construction Service Agreements where we can leverage supply chain expertise and innovation and ensure this is incorporated within the design, risk reduction and pricing. Some examples, where we would engage designers and supply chain at an early stage to work collaboratively with us would include: • Further SI (if required) – if not we can work with the designer, or use our own in-house expertise with the aim of reducing the design period and giving greater certainty with the design

• Road and Bridge engineering, which would include rail experience and working around water

• Railway advisor – Safe Work Leader at an early stage to understand programme, method, book possessions and commence de-confliction. Determine the use of rail heads for deliveries and removal of material.

• Earthworks assessment for cut/fill balance in line with delivery milestones and option for efficiencies with remediation, including space management for stock piles and bio-beds.

• Consents and planning resource. This would include licences and options to work with Environment Agency and Canal and River Trust. We have a proven track record.

Using our established relationships we can quickly identify individuals and teams within our supply chain to enable quick mobilisation of resources. We are founder member of the institution of collaborative working and this demonstrates our commitment to working collaboratively with both our supply chain and customers.

Page 4 of 6

Strategic Infrastructure Package – Old Oak North

Early Market Engagement

5. OPDC are intending to novate development obligations to a master developer once the strategic infrastructure has been delivered. What are your views on this approach? The master developer has not yet been appointed. We have experience in various forms of novation, warranties and associated assignments from a customer to another party. Understanding the conditions at an early stage is key to ensure smooth agreement of the terms so it would be important for OPDC to provide this information as soon as possible.

6. How do you propose to manage the interface between OPDC’s appointed ESCO and IDNO? In order to manage the interface between OPDC’s ESCO and IDNO we would firstly appoint a senior utilities co-ordinator as a key part of the project team. They would be responsible for establishing early relationships with ESCO, IDNO and Thames Water and integrating them into the Tier 1 design team. Key early activities would be to establish design integration, terminations for the demolition and to identify milestones for each plot. This will drive design deliverables and utility sequencing. Our experience shows that Integrated Programme Management is key to successfully managing utilities. This, however, becomes more complicated with multiple contractors. BAM Nuttall has considerable experience of managing interfaces with complex and numerous utility providers on brownfield sites across London. This includes the recent Nine Elms Parkside Regeneration, King’s Cross Enabling Works, and our delivery of multiple land plots of the Olympics Enabling Works. By procuring the works through a two stage procurement, ECI or Pre-construction Service Agreement, the OPDC have the best possible opportunity to integrate the ESCO and IDNO into the design and construction team, securing their crucial input into constructability and programme.

7. What information would you require in a procurement pack from OPDC to allow you to develop a proposal? In order to be able to develop and submit a robust proposal to OPDC we would require the following information to be made available: • A clear scope of the works, if possible considering future development

• Full Terms and Conditions of contract. In order to meet internal corporate governance requirements we would like sight of these as early as possible

• Understanding the design scope of the lead design organisation

• Full site investigation to determine the extent of any land contamination/ foundations/ road design

• Who has responsibility for undertaking the very early planning stages of the project ie Schedule 7 planning, Land Acquisitions (if needed), early site investigation and dialogue with the

Page 5 of 6

Strategic Infrastructure Package – Old Oak North

Early Market Engagement

Environment Agency on remediation and water management. Under a PCSA agreement this could be undertaken/supported by the contractor

• Third party schedule and with whom to interface with clear boundaries of remit – particularly important for utility co-ordination and design

• Early joint risk register so the risk profile is fully understood

• Logistics remit with clear designation of responsibilities

Page 6 of 6

Minutes Market Engagement

Appendix C

Morgan Sindall Written Response

AECOM 7

Old Oak North Infrastructure for Growth

Key question responses

Morgan Sindall – September 2018

1

1 Are you interested in working to delivery an infrastructure project of this scale

• Yes – provided there is a definite programme of work going forwards and there is an appropriate risk share (further details provided below) • We would need to understand the tender process, number of competitors and selection criteria along with the proposed contract amendments, as we would prefer a short tender selection process with minimal tendering costs (i.e. no design) • We would also need to understand how and where funding would be obtained from and guarantees that this would be in place for the scheme as a whole • Our interest reflects the wider Morgan Sindall Group capabilities with activities and packages matching our Group skillsets and business units , namely Highways, Utilities, Rail, Developments, Fit Out , Construction and Housebuilding Divisions and Business Units • The initial Roads package proposed would be led by our Highways Business , part of the Infrastructure Division.

2 In your experience would splitting this contract into smaller contracts / lots stimulate greater competition and deliver value for money

• Depending who you approached it may deliver lower tender prices but will not deliver value for money as tenderers will be looking at a single project or smaller number of projects – we would prefer to tender for a place as a construction partner (as opposed to being part of the supply chain) so we can assist in an equitable risk allocation, programme and interface issues and give accurate advice on cost to complete as opposed to tender price. • Smaller packages would mean the loss of Tier 1 skills to integrate and manage a programme of works, it would mean increased co-ordination and interface risk to the client • You would pay for duplication in design costs across multiple packages and duplication in preliminary costs, including multiple offices and mobilisation / demobilisation arrangements • You would also be more greatly exposed to market fluctuations as and when you tender projects, with a Tier 1 one board this could be better managed and timed to minimise risk to the client. • It would also make the scheme less attractive as there is no long term programme of work so real efficiencies would be difficult to achieve and as mentioned interface risk between packages would have to stay with the client, as we would be unable to accept that risk. • Social Value strategy and benefits are better achieved over a longer term , with training plans, EDI targets , apprenticeship programmes etc. being properly considered and implemented with local providers over the longer term – This is difficult when the project is broken down into smaller projects.

2 3 How do you propose to engage directly with SMEs?

• Through our Central Procurement function, Customer of Choice procurement strategy and Responsible procurement criteria. We would reach out to local suppliers and hold “Meet the Buyer” events to promote engagement. • Our Social Value strategy captures and measures the social value associated with using local SMEs , using LM3 predictor and our value captured using our newly developed Social Value Bank • We would seek to commit to specialist suppliers early and work with them as part of the team, subject to demonstrating best value within an initial competition • We employ Procurement Professionals and lead our peer group in providing access and training to our Supply Chain through the Supply Chain Sustainability School , aiding accreditation of local SME’s • We would employ key suppliers on an option E basis for ECI involvement during design development or on an exclusive basis following a procurement exercise using responsible procurement criteria.

4 How will you leverage expertise in the supply chain?

• To get the best input from Supply Chain , we need to reward contribution or engage early using a robust responsible procurement strategy for key activities. • We would look at the opportunities associated with bundling packages of work, reducing interface risk and maximise early buying power through early procurement arrangements, which also reduces inflation risk.

5 OPDC are intending to novate development obligations to a master developer once the strategic infrastructure has been delivered. What are your views on this approach? The master developer has not yet been appointed

As mentioned previously as a Tier 1 contractor we prefer to work in a true partnership as opposed to being “part of the supply chain” for a number of reasons. We can provide options on buildability etc. that can reduce capital expenditure and thereby increasing the value of the site for development. However we can only do this if we are properly engaged at an early stage under an appropriate agreement key amongst this is the proposed risk profile and proposed transfer of risk intended from either OPDC or developers required this will include things such as: • Not having a fitness for purpose obligation • A realistic cap on liability with no exclusions • Limited or no indemnities • Security package appropriate for the proposed work undertaken • Defined obligations to known third parties • Any information and design given to us is properly warrantied There are other issues but the above tend to form the biggest governance issues we have.

3 6 How do you propose to manage the interface between ESCO and IDNO

This is something we do as part of our business within our Utilities Business, we have multiple systems as part of our IMS that allows us to manage this. However it depends upon when we are appointed and how you decide to appoint us.

7 What Information would you require in a procurement pack from OPDC to develop a proposal

This is a difficult question to answer as we do not know how or what you are likely to be tendering however for us to evaluate our interest in submitting a bid we would need to understand the following:

• Proposed contract amendments including the security package • How and what design is likely to be transferred to us • Proposed programme of work and cashflow profile • Programme in relation to the ECI and construction phases • Tender Questions and evaluation criteria • Number of tenderers (more than 3 in total would limit our interest in bidding).

Provided by

– Morgan Sindall Infrastructure Pre Contract Director

– Morgan Sindall Infrastructure Pre Contract Commercial Director

4 Minutes Market Engagement

Appendix D

Volker Fitzpatrick Contracting Written Response

AECOM 8 Old Oak and Park Royal Development Corporation Volker Fitzpatrick: Contractor Market Engagement Strategic Transport Infrastructure

Following the issue of the briefing note for Civils contractors for the strategic transport infrastructure, we are pleased to submit below our responses to your consultation questions.

1. Are you interested in working to deliver an infrastructure project of this scale? This type of project is typical of the projects that we regularly construct for the public sector and private sector customers so yes.

2. In your experience, would splitting this contract into smaller contracts/lots stimulate greater competition and deliver better value for money? On the basis that this package of work is worth in excess of £200m, to be constructed over 2 to 3 years as indicated, it is a major project. As such the contractor is likely to be from the upper section of the top 10 UK contractors in terms of turnover. This does limit the competition and dependent upon the workload of the major contractors will influence the interest in the project from these contractors. Whilst splitting the package into smaller value packages will create interfaces that need to be managed the increased competition created by the number of contractors capable of carrying out the work is likely to make this a preferable route to follow. In addition, the slightly smaller contractors are likely to utilise the support of slightly smaller sub-contractors who often have lower overheads and allows the work to be spread across a larger segment of the market. This should spread the risk and provide better value for OPDC. We are likely to be more interested in the work was split into packages.

3. How do you propose to engage directly with SMEs? We have a strong supply chain of SME’s that support us on our projects. They carry out drainage works, formwork and earthworks. We would engage with these SME’s at tender stage and before and carry them forward into construction.

4. How will you leverage expertise in the supply chain? We would engage some specialists at tender stage, for example our in house piling company VGE. We would competitively tender the majority of the packages and select the sub-contractor based on best value. 5. OPDC are intending to novate development obligations to a master developer once the strategic infrastructure has been delivered. What are your views on this approach? The master developer has not yet been appointed. We can understand why you would appoint a master developer. We have worked on a number of projects with a master developer, e.g. Knight Dragon at Greenwich, Lend Lease at Stratford. These projects have been successful for the developer and ourselves.

6. How do you propose to manage the interface between OPDC’s appointed ESCO and IDNO? We would agree a programme with the appointed ESCO and IDNO. This programme would coordinate the works in areas of the project to minimise the interface between the packages. We would then hold weekly meetings on site to coordinate the works day to day. We have done this at Greenwich with the District Heating Network contractor.

7. What information would you require in a procurement pack from OPDC to allow you to develop a proposal? The information we would seek to assess the opportunity would be-  Form of engagement – novated design of design and construct  Status of the development of the design and an understanding of future client influence on the detailed design  Bid timescales and visibility  Delivery timescales  Contractual terms and conditions and hence risk  Tender costs  Likely competition and numbers tendering  Other opportunities at the time  Status in terms of planning approval  Status of the funding  Interface with key stakeholders, e.g. Network Rail, Thames Water  Scoring and adjudication process Minutes Market Engagement

Appendix E

Buckingham Group Contracting Written Response

AECOM 9

OPDC/ Buckingham Group: Contractor Market Engagement

1. Are you interested in working to deliver an infrastructure project of this scale?

Buckingham Group Contracting Ltd confirm our very keen interest in bidding for and delivering a project of this scale.

2. In your experience, would splitting this contract into smaller contracts/lots stimulate greater competition and deliver better value for money?

We understand the rationale behind this question and recognise that at face value increased competition should deliver better value for money. However, consideration needs to be given to the cost of: ▪ Administering multiple procurement competitions ▪ Administering the contracts for multiple projects ▪ Client team costs in managing multiple contracts ▪ Multiple mobilisation / de-mobilisation requirements for each contract ▪ Additionally, from a construction perspective there are additional costs, due to the additional risks presented, to consider in relation to: o Warranties / insurances from previous works o Interfaces if multiple contractors are working on the site at the same time

From our experience, to ensure maximum value for money: ▪ Stop design work at outline stage and the minimum required for a two-stage tender (Quite simply why pay for designs that will change during a value engineering process) ▪ The project should be awarded as a single lot on a two-stage tender process, thereby maximising competition between tier one contractors as tendering costs will be reasonable ▪ Using the second stage tender process to create a formal ECI / PCSA Stage and engage the winning contractor in detailed design development / value engineering / risk and opportunity exercises – this process alone will deliver more real measurable value than any other option

We are naturally biased towards the single lot solution as the core works required for this project (Demolition, Remediation, Enabling, Infrastructure, Rail etc.) are all delivered in-house by Buckingham Group. Equally, this is also supported by current experience whereby the start of a newly awarded contract has been delayed significantly because the client split a large project into the ‘wrong’ packages and hadn’t fully considered key interfaces with subsequent packages of work.

3. How do you propose to engage directly with SMEs?

Our approach to maximising opportunities to directly engage SMEs will be based on the application of our “Buy Local Use Local Policy”, and delivery of Social Value aims and objectives. Our proposals include: ▪ Retaining responsibility for overall delivery as the Main / Tier 1 / Principal Contractor, allowing us to break down the Sub-contract packages into smaller packages which are suitable for SMEs/BAMEs ▪ Reviewing proposed tender lists with the Client / Design team, providing the opportunity for the team to introduce us to new suppliers ▪ Advertising in local press ▪ Using local business support agencies to circulate information ▪ Providing training and capacity building to improve the fitness of local, SME businesses to compete for packages ▪ Holding Meet the Buyer Events

Buckingham Group Contracting Ltd

▪ Engaging the Social Value Portal (A Social Enterprise) to capture and quantify the local, economic benefits

From our recent experience in assessing the Social Return on Investment by our clients the following targets, to be agreed in discussion with client team, are reasonable for Civil Engineering projects: ▪ Local People Employed (Say within 20 miles of the project) - 60% of the workforce ▪ Value of orders placed with local businesses - 50% to 60% of the contract sum ▪ Number of SME’s appointed - 30% of businesses on the project

4. How will you leverage expertise in the supply chain?

Buckingham Group is an experienced civil engineering contractor, our supply chain is open, flexible and embraces a wide range of national, local, SME and BAME Contractors. We have safely and successfully a wide range of similar projects requiring innovative technical solutions on very complex development sites including: ▪ A recent bridge slide over the M1 Motorway ▪ The highest reinforced earth retaining wall constructed in Europe ▪ Fair faced, hand/machine cleaned, exposed secant pile retaining walls

With reference to our response to question 2, our approach is based on the early identification / appointment of key supply chain partners and working closely with them in formal collaborative relationships (Buckingham Group is ISO 44001 ‘Collaborative Business Relationships’ Certified) through detailed, integrated, design, planning and risk/value workshops. This approach is deliberately designed to embed the supply chain into our team and capture their specialist knowledge at the earliest possible stage in the project procurement / development process.

5. OPDC are intending to novate development obligations to a master developer once the strategic infrastructure has been delivered. What are your views on this approach? The master developer has not yet been appointed.

A substantial proportion of our works is delivered for a wide range of developer clients, quite simply we are used to working on projects: ▪ With single or multiple developer clients ▪ Where our client changes part way through a project ▪ Where, we, and our works are novated to another developer

As we work with most of the recognised developers currently operating in the UK, we will be pleased, if required, to support the OPDC to find or deal with a Master Developer.

On numerous occasions we have worked closely with developers to develop their business cases in consideration of the purchase of development sites.

6. How do you propose to manage the interface between OPDC’s appointed ESCO and IDNO?

An important aspect for the delivery of this element of the works will be developing and maintaining excellent working relationships with the ESCO, IDNO and Utility Undertakers. We will appoint a dedicated Stats / Utilities Manager, who has well established relationships with major providers.

Our stats manger will: ▪ Be the key point of contact for liaison and interface management ▪ Produce a utility tracker document

Buckingham Group Contracting Ltd

▪ Work with Designers to optimise the engineering solutions and deliver best value solutions ▪ Take engineering solutions and possible protection solutions to the utility engineering departments for development and resolution ▪ Initiate the attendance of key engineering personnel from the ESCO, IDNO and Utility Undertakers to our risk workshops and design/engineering development meetings ▪ Rigorously monitor agreed programmes providing detailed reports for the site team, raising early warnings of potential problems

The project will also have an appointed member of the team as the Buried Services Co-ordinator to feedback careful site investigation details to the Design and Site Teams, to enable strategies to be optimised early for the work. This role will provide vital site information gathering and the problem-solving point of contact, allowing the Stats Manager to concentrate on the higher-level engineering and administrative functions.

7. What information would you require in a procurement pack from OPDC to allow you to develop a proposal?

As previously suggested there are several possible routes to tender/Procurement. The following examples outline the information required for a two stage or single stage bid process:

Stage 1 of 2 Stage (ECI): ▪ Client to provide outline scope of works ▪ Client to Provide anticipated programme and delivery requirements ▪ Contractor to submit Staff rates (Supervision/Management and Design) for ECI stage and provisional delivery programme ▪ Contractor to submit their fee %

Stage 2 of 2 (Design & Build) ▪ Basically, as detailed below for a single stage Tender. However, during the ECI you will have a fully integrated team (Client, Designers, Contractors, stakeholders etc) all working together to produce the final buildable solution. During the stage 1 period some of the key tasks listed below could be completed or significantly reduced when entering into the stage 2 process

Single Stage Tender (Design & Build) To develop a fully detailed and compliant proposal, we will require full and detailed: ▪ Instructions to Tenderer’s ▪ Employer’s Requirements ▪ Works / Site Information including: o Site Location o Site Surveys and Ground Investigations including UXB Surveys o Contaminated land surveys and details of an early discussions with planners/EA/Local Authority EHO o Buried Services / Utility Information o Environmental and Ecological Surveys o Local Authority Planning Conditions Trackers o Outline designs ▪ Pre-construction Health and Safety Information Pack (PCIP) ▪ Contract Terms and Conditions ▪ Bonding / Insurance / Warranty requirements ▪ Details of any agreements / discussions with the ESCO, IDNO and Utility Undertakers ▪ Details of agreements with Network Rail / stage of their approvals process plus key contacts ▪ Details of any agreements with adopting authorities (e.g. section 278, 106 agreements etc.)

Buckingham Group Contracting Ltd

▪ Details of discussions / agreements with Key Stakeholders, e.g. British Waterways for works in proximity to / over the Grand Union Canal ▪ Fully detailed scope plus required end-uses of the development

Buckingham Group Contracting Ltd Minutes Market Engagement

Appendix F

Hochtief Contracting Written Response

AECOM 9 1. Are you interested in working to deliver an infrastructure project of this scale?

• Yes, we are interested in this scale of infrastructure works. HOCHITEF is one of the world’s largest construction services organisations turning over more than £20Bn worldwide and employing over 50,000 people. • Our key market is infrastructure of which this type of scheme is typical. We support traditionally procured schemes as well as financed PPP schemes such as the Silvertown crossing which we are also currently bidding for TfL. • Locally in the UK It is a good match for us in terms of capability, resources, skills and location. We are in the final stages of delivering four major road over rail bridge replacements for TfL on main arteries such as the North Circular and A1. • We recently secured the position of preferred contractor for the Brent Cross Infrastructure works for Hammerson’s Standard Life, which has similarities to the Old Oak scheme in many aspects. • Continuation into this scheme will allow ongoing development of best practice for such works.

2. In your experience, would splitting this contract into smaller contracts/lots stimulate greater competition and deliver better value for money?

• Smaller packages may generate greater competition at the point of award. However, a project of this nature is very interrelated in terms of the road network, such that closures or restrictions in traffic flow will impact and be impacted by adjacent works. • Access to sites, coordination with utilities and other third parties are also complex and depend on adjacent areas. • There may be benefit in splitting out some small packages of discrete work where these interfaces can be minimised.

3. How do you propose to engage directly with SMEs?

• We will use our existing supply chain contacts as these provide a certainty of capability and quality. • Beyond this we will engage with the local community and businesses by holding supplier events that are advertised locally and attended face to face with our delivery team. We sometimes hold these events during the tender period to ensure we are aware of locally capability and those firms can fully understand the works which are coming. • There are limitations on products and services that can be procured locally as these may not exist locally. • We also actively promote return to work schemes and apprenticeships which we can run directly or develop through our supply chain. • We would use local advertising and also services such as Compete4 to advertise subcontract packages such that any local enterprise can get access to the work packages that are available.

4. How will you leverage expertise in the supply chain?

• Many aspects of our supply chain are specialised and very well established for example pre-cast concrete supply, surfacing and aggregates. Through our procurement teams we are continually engaging with our existing supply chain and meeting new potential suppliers to understand new developments in the market and how we can leverage new more efficient ways of working. • We are members of Supply Chain and Sustainability School, CECA, the London Transport Museum and other leading groups which provide a forum to discuss and promote new ways of working. • We also engage with local Chambers of Commerce to maximise our reach into the local supply chain and SMEs. Many of these events are attended jointly with supply chain members. • Typically, through a tender process we will identify a number of potential supply chain partners. With these partners we will spend time developing solutions and working very closely with them to ensure our global plan for delivery maximises their strengths and input. A mark of success is the number of such suppliers with which we have formed long term ongoing relationship over many projects.

5. OPDC are intending to novate development obligations to a master developer once the strategic infrastructure has been delivered. What are your views on this approach? The master developer has not yet been appointed.

• We have no general issues with this as long as the master developer has the ability and financial capacity to undertake such a role. • A key factor determining whether we will engage with this entity relates to the terms under which we are engaged as to whether the relationship will be successful. • A Fair balance of risk ownership and reward should be present as set out in the majority of standard construction contracts. • As developers seek to protect themselves by passing excessive construction risks to the contactor through the contract (such as the risk of planning, consents and all ground conditions) the opportunity becomes less attractive.

6. How do you propose to manage the interface between OPDC’s appointed ESCO and IDNO?

• At this early stage we would seek to work with you further to understand exactly how it is envisaged that this may work and what the contractual arrangements may be.

• In summary we would look to have very early engagement with the entities to ensure all works are aligned. This would need to be managed through the process of contract delivery. It would be useful for a key representative from each organisation to be collocated at least part time during the works. • The three parties should work collaboratively, and contracts set up to ensure “best for project” outcomes. Alignment of key performance indicators or contractual targets set to ensure all need to work together and jointly deliver.

7. What information would you require in a procurement pack from OPDC to allow you to develop a proposal?

Typical Information required would be; • Drawings • Works information / Scope • Site information • Specifications • Contract arrangements • Proposed commercial arrangements • Current Third-party agreements • Outline programme • Constraints • Design information to date. • Awarding criteria