Developing a Decommissioning Acquisition Strategy for 2014-26 Paul Foster, Decommissioning Director Rob Harries-Harris Contract Officer, Commercial Directorate Date: March 2013

Agenda Background Principles Underpinning the Future Model Enablers 3

Orientation - Where are we now? The Sellafield Plan an accurate and realistic picture of the state the site is in sets out what we are doing to reduce hazard, with milestones and governance in place to enable the NDA to monitor our progress and hold us to account risks to the plan remain but we are currently on target to deliver decommissioning milestones 4

Key Deliverables 2014/15 to 2025/26 First generation magnox storage pond sludge retrievals begin in 2014/15, export of fuel and skips in 2015/16 bulk desludging complete by 2018/19 Pile fuel storage pond bulk desludging and metal fuel export complete in 2014/15 local sludge treatment plant export complete 2017/18 Pile fuel cladding silo retrievals begin in 2017/18 Magnox swarf storage silo retrievals targeted to start 2016/17* residuals removal to begin no later than 2023/24* Site remediation and decommissioning Ongoing hazard reduction and decommissioning across SRDP portfolio throughout contract term These may well change - Special Measures, Accelerated hazard reduction Source: Sellafield Plan Aug 2011 * subject to confirmation

Areas for Improvement Public Accounts Committee Concerns: Planning and schedule adherence Programme and project management capabilities Collaborative working to package resources Robust performance management Other bodies, including NDA: Identify SL’s historical contracting model as a priority development area some weakness in capacity and capability of supply chain SL does not always strategically think through and establish a model for core and non core capability SL does not always adopt a strategy for best value and performance (including schedule assurance) maximising available supply chain capability and capacity 6

Our Challenge: Clear focus on outcomes From … Short term contracts Price driven Control vs quality Mini-competitions Short term plans Itinerant workforce Inefficient Ineffective Adversarial ... To Longer contracts Focus on benefits Built in quality Benchmarked costs Long term vision Develop resources Collaborative OUTCOME Accelerated hazard reduction Fit for purpose assets Access to resources Economic operations Innovation is necessary to achieve these outcomes Continuous improvement through the entire programme and project cycle - from concept to development, implementation, operation & maintenance through to close-out Innovation in the construction and operations management processes not just design/products Knowledge transfer between individuals, teams and companies

Engagement to Develop and Implement the Strategy 18-24 Month Engagement Process begins today Next 6 months will be vital SL commitment to engage constructively with Supply Chain at all levels Your contributions are invited Early contractor involvement in programme and project cycles 8

Strategic Context NDA Commercial UK & Local Government Supply Chain OJEU, etc. SLCs 22 & 35 Over-Arching Acquisition Strategy Special Arrangements Technical R&D and Strategy Decommissioning Acquisition Strategy FGMSP PFSP MSSS PFSS W’scale SR&DP DSA DFA Innovation Benefits Learning From Experience Major Projects ISA MDSW Production Operations Infrastructure

Simplified Engagement Structure Current Arrangements Decommissioning Programme Management FGMSP PFSP MSSS PFSS W’scale SR&DP Decomm Delivery 4P/Major Projects ISA DSA MDSW/Other Make v Buy

Effective Planning at All Stages Reactive Work Increase the Proportion of Planned Work Over Time Planned Work

Collaboration/Sharing Enablers Share Information Share Risks not Responsibilities Share Benefits Keep savings on at risk elements Share savings on variable cost elements Innovations benefit client and innovators Align objectives through strong incentives 12

Supply Chain Assurance SL is Tier 1 contractor and must manage the performance of its supply chain This requires visibility, oversight and governance of Tiers 2/3/4 performance: Safety, Health and Environmental Time, Cost, Quality Wider government agenda, SME and Socio-Economic issues Desired Outcomes Accelerated hazard reduction Fit for purpose assets Access to resources Economic operations 13

The Opportunity Longevity Scale A programme of work lasting up to 10 years Scale up to £700m of work between 2014/15 and 2025/26 14