Civil Engineering Reference
In-Depth Information
submit a response to the client. Therefore appetite for any given oppor-
tunity is the starting point and key to delivering competition and value.
Is there enough capacity in the construction sector to meet the
demand for London 2012?
This might seem a strange question with the benefi t of hindsight, looking
back on the success of the London 2012 construction programme. The
construction industry very obviously had the capacity to deliver. However,
at the time that was by no means certain. In 2006, when the question
was fi rst posed, there were real concerns over whether or not a very busy
and overheated construction sector could respond to a large amount of
demand from a newly emerging client - the ODA - to deliver a number
of complex construction projects (mainly sports stadia and arenas) on a
contaminated site in the heart of east London, to a schedule that had an
absolutely immoveable deadline for completion.
The answer given to this question at the time was:
The question should be not whether there is enough capacity to meet
the demand, but whether there is any appetite. If there is no appetite,
then there is no capacity.
Capacity is a function of appetite and therefore the greater the appetite,
the greater will be the capacity. If appetite was high, then competitive
tension would be keen and leverage to achieve value would also be
enhanced. It was because of this approach that vendor engagement was
developed and delivered for the ODA and formed an important part of
removing surprises and achieving value.
Engagement with the supply chain or vendors prior to publishing an
opportunity is the fi rst point at which a client can hear the reaction of
the marketplace and judge its appetite, allowing the response of fi rms
in turn to infl uence the emerging procurement strategies and package
plans. From the contractors' point of view, as the stakeholders who have
to deliver value to the client for the capital expenditure programme on
offer, they still have to make a profi t at the same time. It is therefore
important that they are brought into the way projects are to be procured,
so they can see the risks and opportunities associated with the award
of a contract.
The packaging strategy for a programme depends on a number of
factors. Decisions made regarding packaging can impact on the supply
market's appetite to respond to procurement opportunities. How-
ever some factors, such as national economic conditions and market
