Civil Engineering Reference
In-Depth Information
develop requirements. This phase of developing requirements involves
meetings with the various stakeholders and the agreement of the client
body for a balanced scorecard of value objectives. The aim of the pro-
gramme purchaser is to ensure that the programme is bought in such a
way as to meet the value objectives agreed during the Develop Require-
ments stage of PSE. At one extreme this may be a large engineering,
procurement and construction (EPC) contract, requiring a major con-
struction organisation or joint venture to take on the risk of engineering
and construction. Alternatively, the client could decide to break up a
programme into discrete packages or categories of work to manage the
risk via separate individual contracts. This approach enables the client
to maintain a greater overview and achieve greater control over the
delivery of packages, ensuring the client's own due diligence is applied
during the procurement of main contractors and then through the con-
tracting strategy to the critical fi rms in the supply chain. It was this
latter approach that was chosen by the Olympic Delivery Authority
(ODA) in 2006, when they appointed a delivery partner to manage their
construction programme.
However, the challenge remains: how does one buy an Olympics?
Where does one start? The Olympics required a wide-ranging cross
section of construction skills. The packaging and contracting strategies
had to be designed to ensure that the appropriate packages were con-
tracted to the most capable suppliers, while allocating risk to those best
placed to manage it.
Devising a suitable procurement strategy depends on a strict, logical
order. This is illustrated in Figure 4.1, which illustrates the procurement
cycle. The fi rst step is to gain an understanding of what exactly needs
to be bought. The requirements for London 2012 were well established.
How to buy those requirements, or bundle them up for procurement,
formed the packaging solution for the programme's requirements - the
second step in the procurement cycle. Only once this was complete was
the problem of how best to transfer risk considered - the third step in
the cycle. This was achieved through developing a contracting strategy.
With the packaging and contracting strategies in place, individual pack-
ages or project procurement plans could then be tested to gain an under-
standing of market appetite, the interest and willingness of fi rms to
compete during procurement and participate in the delivery of the
programme.
PSE adopts this strict order in developing a programme procurement
strategy, because the packaging strategy takes into account the overall
