NEC TSC Contracts Experience

Transcription

1 NEC TSC Contracts Experience By S.M. Ho Director Contracts & Procurement CLP Power 22 Sep 2016

2 Business Needs Business drivers Safety performance Operational Excellence Value for Money Service Challenges in Power Stations Large industrial plant Work arrangement Specialised skills.. Slide 2

3 Business Needs: Vision Traditional Partnering Mix of in-house staff and different contractors in maintenance, high worker of contractors turnover complicating safety and quality control Less Critical Systems maintenance taken up by Partnering Contractors; in-house resources on managing and maintaining critical systems, alongside with asset management and engineering Slide 3

4 Contract Packages Two main types: Dedicated plants/systems Common services Slide 4

5 NEC Contract Framework Long Term Contracts Partnering in nature, with 1 TSC Option C as Package Order for each year. This allows: Comprehensive review of scope, performance, and price for each year Annual work plan with flexibility to change Encourage collaboration and innovation Performance driven: Clearly define the Safety and Technical Key Performance Indicators (KPI) Closely monitor cost expenditure vs Target Cost by both parties Pain/Gain share linked to Safety and Technical KPI s Slide 5

6 Choosing NEC Partners Pre-qualification process Expression of Interest Credentials Presentation Relationship Workshop Tendering Assess contractor s company and financial background Assess contractor s safety and technical capabilities Evaluate contractor s partnering intent Evaluate contractor s proposal on safety, technical and economic aspects 6

7 Build Teamwork and Commitment Big launch with all contractors Co-location partnering building Dedicated team to coordinate all contracts Regular face-to-face review with top management Show support by acting to address concerns On 19 November 2013 Slide 7

8 Well-defined roles and responsibilities Management Team provides strategic direction and leadership Partnering CRO (PCRO) collaborates with NEC Partner to set performance targets, monitor performance achievements, and drive for continuous improvement. Departmental CRO (DCRO) is the key departmental representative, who consolidates the departmental needs and monitors the departmental performance. DCRO also supports and deputizes PCRO s duties RO monitors the NEC Partner s performance toward safety, technical, cost and quality for his/her task. Framework & Procedure Owner To develop framework and process details for consistence and continuous improvement

9 Tailored process supported by IT system Partnering Contract IT System: Newly developed IT system Captures all cost elements under the contract Interfaces with other IT systems, such as work management, purchase-to-pay systems and contractor s entry system Internal Procedures: Outline the operational process for key activities, e.g. Target Cost setting, Compensation Event, pain/gain sharing Align with the requirements stipulated in company s policies and procedures Define governance organisation, individual s roles and responsibilities Slide 9

10 Managing Delivery Measure the performances and review monthly with PCRO and quarterly with Mgt Team Escalate to Champion and Mgt Team if adverse performance Performance Payment Keep Defined Cost component in the IT System as an Open Book approach. RO to review the work reasonableness PCRO to keep the overall process control Compensation Event (CE) as a NEC tools to cater any risk Provide channel, i.e. PCRO and Champion for any early warning Contract Audit to provide further verification Risk Relationship Conduct quarterly survey to measure Partnering Behavior attributes such as mutual objective, problem solving, open & transparency, continuous improvement and innovation Slide 10

11 Overall Review Achieved objectives Safety Performance Cost Stable and competent workforce Tap expertise of contractors Rigorous drive to reduce costs Regular performance review with incentive/penalty Challenges Administration efforts for actual cost Takes time to mature process and performance, then cost and innovations Need strong drive from owners management Process compliance and efficiency * Reference to Good practice contract management framework (2008) by Office of Government Commerce (OGC) and National Audit Office (NAO) Slide 11

12 Comments & Recommendations NEC is an effective tool for maintenance contracts to drive business objectives Invest efforts in People culture: employer & contractors Customised process and IT system Training for NEC and technical Drive costs & innovations to sustain improvements Follow through partners concerns Conduct review after initial launch Top management involvement Be prepared that it takes time, a couple of years to mature Continuous efforts to deliver sustainable benefits Focus in improving your business needs * Reference to Good practice contract management framework (2008) by Office of Government Commerce (OGC) and National Audit Office (NAO) Slide 12

13 Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Winston Churchill Slide 13