Offshore wind design

Adding value – higher efficiency, productivity and innovation

I am a firm believer that being able to understand and respond to the complex and often changing needs of sustainable energy projects, to a degree that may not even yet be clear to the client, is essential to good project delivery. It adds value.

( Text content written by Twenty6 for Danny Bonnett, LIC Energy )

Our job as design engineers is not just to do, but also to listen, think and be creative within a practical, cost-conscious envelope.

Seldom are all the best answers known when a project is first mooted. Rather, the process is one of exploration and discovery, seeing where new technologies can help and working closely with other experts in specialist fields – including the client – to achieve optimum solutions.

The resulting whole is usually much larger than the mathematical sum of the parts. Innovation, greater efficiency, higher productivity and real fitness-for-purpose are the outcomes.

I find it very encouraging therefore to see that the Institution of Civil Engineers (ICE) will be rolling out the next stage of Project 13 this spring with the goal of creating a fundamentally different and much more advanced procurement and delivery culture within the sector.

From passive to active

The ICE’s aims are extremely logical. The idea is to replace traditional ‘transactional relationships’ between clients and supply chain partners with dynamic ‘enterprise relationships’.

In other words, moving away from a rigid system where clients express their best guess of what they hope to achieve in an invitation to tender document, and potential contractors respond very literally to what is asked for. The net result in many cases are projects delivered several years down the line that meet no-one’s real objectives; disappointment is compounded by cost overruns, frustrating delays and poor service levels.

Instead, the new approach is to assemble teams of very carefully selected partners who deliver against a baseline agreed with the client. Project 13 draws in depth from the Anglian Water @one Alliance experience; baselines are set from many years of precedents and industry knowledge.

If supply partners meet the baseline criteria, they cover their costs. If they are able to outperform the baseline, their gains go into a joint project pool which is shared out periodically with all other supply chain stakeholders, including Anglian Water as the client.

Similarly, losses go into the common pool. It is understood at the outset that persistently under-performing partners will be required to withdraw. Their places are taken by others selected on, among other factors, their attitude, history and delivery record.

All for one and one for all

The result is a system where everyone’s success depends on mutual collaboration; interestingly, the model makes it impossible for any one supplier to work the system to its advantage. There is no guarantee or mechanism for regular cost overruns to be paid.

At a time when the public, political figures and business stakeholders are all looking closely at how private, public and private, and public projects can be delivered, it is widely acknowledged that a broken procurement-delivery system needs to be replaced. Well-organised collaborative working seems to have the ingredients for success.

In the case of the @one Alliance, partners have delivered 40%-time efficiency improvements and a 50% carbon reduction over 12 years. Recently, all partners signed up for a further 15 years of supply chain participation. The advantage to them is long-term certainty, plus opportunities to work closely with fellow leading suppliers in the stable conditions needed to invest in innovation and demonstrate better productivity.

LICenergy UK’s experience

Which brings me back to my initial point. One of my own company’s clients was recently kind enough to say that what they liked and valued about us was the level of engagement we brought to the project, our ability to understand the brief, plus our additional ability to understand the issues and potential problems the project’s circumstances might pose before embarking on solutions. Consequently, the final design solution added real value to his business.

That’s a nice testimonial to receive. However, it highlights what we see as the natural benefits of close collaboration and respect for all partners’ ideas, plus a willingness and ability to investigate novel solutions together wherever they further the client’s real aims.

There are lessons here I think it is important to share. For example: –

For our client, Hexicon, we undertook a fabrication package management role. They were moving the Dounreay Tri project towards financial close (FID). At LIC, we were happy to adjust our contracting style to provide pre-FID services, so that fabrication could start and be appropriately monitored, while interfacing with the party taking over after FID. Invariably, the lines of responsibility get clouded in such situations, but a flexible and collaborative approach were a necessity to keep a dynamic project moving.

Another example was the work we carried out for tidal device company, Kepler. Here, we spent time getting under the skin of the client’s requirements to develop a bespoke solution for the support columns of a tidal fence suited for environments such as the River Severn. We looked at both steel and concrete versions and settled on concrete as the best balance of cost, ease of installation and durability. Whilst the client provided the starting point for us, we worked together to come up with something quite innovative, taking a more iterative approach to use the best ideas from within the team.

Better bottom-lines for everyone … or not?

As all parties in major infrastructure projects seek better value for money, with constructors and engineers under pressure to generate higher revenues by being more efficient, and clients learning how to achieve better results through more perceptive procurement, close collaboration is something we are going to hear much more about I’m sure.

The warning to go with this, however, is to watch out for the little companies amidst the large-scale procurement exercises that often go hand-in-hand with large project framework agreements.

Quite often, the frameworks seek to have just one or two consultants that can deliver multiple over-lapping services, such as structural, electrical, geotechnical, geomorphology, ground modelling, SCADA and coastal defences. Effectively this means that only large companies get a chance to bid to deliver the procurement synergies sought by utility-scale clients.

The small company may be an acknowledged subject area expert in one of those fields, but they won’t make it past the procurement screening to even get to bid. This would be a loss to the industry. It would also be a shame for the experts, who are then unable to apply their particular knowledge and attitude for the client’s benefit.

One way around this dilemma is to have the specialists wrapped in to the bid before the it arrives with the client. There may be other ways too. So long as niche company expertise is understood, then procurement practices can seek to keep it in the game.