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SUPERSTRUCTURE CONTRACTS: Procurement and contract strategy April 20th 2009 Benno Stoiber Arjen de Boer Thijs van Steen.

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Presentation on theme: "SUPERSTRUCTURE CONTRACTS: Procurement and contract strategy April 20th 2009 Benno Stoiber Arjen de Boer Thijs van Steen."— Presentation transcript:

1 SUPERSTRUCTURE CONTRACTS: Procurement and contract strategy April 20th 2009 Benno Stoiber Arjen de Boer Thijs van Steen

2 Agenda Scope Contract strategy (creation process) Contract form Procurement procedure Planning Risks and challenges Propositions for discussion

3 Scope superstructure contracts Cluster 11Superstructure (Track) / Traction Cluster 12Telecommunication systems Cluster 13Station and tunnel installations & Passenger services Cluster 16Architectural outfitting stations / Art

4 Scope e.g. Escalators (99) and elevators (26) Architectural outfitting stations (8): walls, glass panels, tiles, etc. Lighting Ventilation systems Substations and switching devices Cameras and dynamic passenger information system Rail system (except signalling and equipment) - 9.5 km, mostly ballast-free

5 Contracting Strategy: Completion Workshop in May 2008 determining priorities (key risks) Realization concept Contracting Plan Comparison of variants Preparation preferred variant Review variant(s) in interviews with experts September 2008 in Board of Directors NZL discussion with Director Public Works Amsterdam the Alderman was informed

6 Contract Form: Choices Balancing Contract Forms: traditional versus integrated (E&C / D&C / DB(M) / DBFM) Multi-criteria analysis on criteria such as: time/planning, interfaces, market, environment, etc. Results discussed in exploratory talks with (potential) candidates

7 Contract Form: Market analysis Market wants to integrate disciplines Market is eager for quick selection procedures (reduce to 2 or 3 competitors) Rail market is hungry because of declining workload ProRail (September 2008) Telecom/installation market is selective regarding selection of projects Outfitting market: positive nor negative image Progressive insights Effects of credit crunch, economic situation in the construction market results in ?

8 Choice: D&C contract Dominant arguments: Planning advantages (integration of disciplines) Interfaces Coordination Flexibility Technical specifications based on Systems Engineering (Safety Case)

9 Procurement: Choice of procedure Competitive dialogue: technical and logistical complexity of the work Focus: quick selection procedure based on Critical Success Factors (CSFs): –Management system –System integration –Minimize Environmental Nuisance Use of Maximum Value of Bids

10 Maximum Value of Bids Maximum amount the Authority has available for the project Published early in the procurement process Validity criteria Price is still an important criterion

11 Dialogue Prequalification phaseFinal Tender Phase Business PlanConsultation phaseDialogue phase Contract Award 3 Participantsn Participants1 Participant Business PlanApplication for participationDefinitive Bid Award Criteria: - Rating preparation Critical Success Factors (CSFs) - Grounds of Exclusion - Eligibility Requirements Award Criteria: NCW valuation of Options Publication

12 Procurement phase: Prequalification Relatively "light" criteria on the candidate companies: Exclusion criteria Financial economic standing Project management experience Experience in 'rail' market

13 Procurement phase: Business Plan (Critical Success Factors) Three Critical Success Factors (CSF): CSF 1: Management system CSF 2: System integration CSF 3: Minimize environmental nuisance

14 CSF 1 Management system Purpose: In Control in aspects time, quality and budget in realization process Questions Vision on cooperation and flexibility? Organization regarding the management systems? Selection of critical processes for the project? How are these processes arranged? Process Categorize at strategic level (vision, top risks, opportunities, etc) Assessment focused on controlling risk cq. size residual risks for the Authority during contract period

15 CSF 2 System integration Purpose: a controlled test, system integration, Test run and commissioning of the North / South line Questions relating to: Testing System Acceptance and transfer Test run Process: Categorize in consultation with AMSYS (coordinator / 'system integrator') Assessment focused on residual risks for the future operator

16 Learning from other experiences....

17 CSF 3 Minimize nuisance on surrounding environment Objective: to reduce environmental nuisance strengthen image of the Noord/Zuidlijn in the surrounding environment Questions Through what measures will nuisance for the environment be minimized? How is the duration of the disturbances minimized? Elaborate risk analysis (identifying bottlenecks, formulating measures) Targeted cases on several bottlenecks identified in advance

18 Logistics process Logistic accesses in Sixhaven and South Relieve disturbance in sensitive areas (inner city, canal area) Sixhaven South

19 Assessment Methodology CSF Qualitative assessment and valuation by external Advisory Committee for each CSF Per CSF the Advisory Committee will give a score between 0 and 5 points 12345 Minimum completion, Only just complies to the minimum requirements Optimal interpretation, Very significant improvements Compared to minimum requirements 0

20 Advisory Committee Composed of experts in relevant fields / disciplines (professors, recognized experts and local experts) Appointed early in the process and involved in final drafting of the CSF

21 Relation Business Plan – Final Bid Final Bid must build on Business Plan (validity criterion) Parts Plan (drawing CSF) are further developed in Options CSF 1 CSF 2 Business Plan Option A Option B Option C Option D Option E new topics

22 Options The Authority has defined Options, in addition to the minimum requirements To (partially) not fulfill these Options results in a fictitious increment of the NCW Options will be translated into Dialogue Products Final valuation of Options will take place in the Dialogue Phase

23 Options Option A: Management System Option B: System integration Option C: Minimize environmental nuisances Option D: Fast delivery Option E: Elevators / Escalators (Quality levels) Option F: Maintenance Concept (LCC) Option A: effect CSF 1 Option B: effect CSF 2 Option C: effect CSF 3

24 Dialogue Products Options: –Management Plan –Acceptance Plan, System integration, Safety Case, Installation and Test run –Logistics plan –Planning –Analysis Failure mechanisms Elevators and Escalators –Maintenance Concept

25 (Other) Dialogue Products Sample Preparation regarding Systems Engineering Verification matrix (on risky design elements such as the vibration reduction systems in the rail track)

26 Planning Prequalification: July 2009 - Nov 2009 First phase of the Dialogue – Business Plan (n Participants) Nov 2009 - Feb 2010 Second phase of the Dialogue – Consultation phase (3 Participants) Mar 2010 - Apr 2010 Third phase of the Dialogue – Dialogue phase (3 Participants) May 2010 - Oct 2010 End of Dialogue – Definitive Bid (3 Participants) Nov 2010 - Dec 2010 Completion – Contract Award (1 Participant) Dec 2010

27 Key risks Capacity of the internal NZL organization (quantity and quality) for drafting the contract, the process of contracting and contract management Complexity of the project: none or (too) few interested parties Unstable scope Implementation planning is not feasible Appeals of candidates or participants Bidding over budget Realisation of substructure contracts will take longer than planned The building time frame (superstructure) will take longer than planned

28 Challenges: coordination and input External stakeholders Managing the Law of the inhibitory ahead Discussion Maintain component (DIVV Management) Signalling, Integration test, Test run (AMSYS) Frames for Acceptance and Transfer (DIVV Management) Internal stakeholders Interfaces file substructure ('as built' or 'as designed including non conformities)

29 Questions?

30 Propositions for Discussion

31 Proposition 1 If large infrastructural projects are contracted traditionally*, public authorities are incapable of keeping project control. *choices in design and methods of construction made under responsibility of the Authority, with directive supervision by the Authority

32 Proposition 2 The characteristics and the key risks of the project, for instance: Capacity of the internal organization Unstable scope Uncertainty in timeframes of substructure contracts make the project highly suitable for a form of alliancing

33 Proposition 3 To transfer design responsibility is like a boomerang: it will inevitably return to the Authority.

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