Balanced Scorecard Approach for Rail Procurement Design Pete

Balanced Scorecard Approach for Rail Procurement Design Pete Colley, PKLG Services RIA Knowledge Hub 15 th May 2019

Creating Market Conditions for Growth ¡ Key pillar of Rail Supply Group Sector Strategy ¡ Listened to supply chain to understand “barriers” to growth ¡ Difficulties posed by client and Tier 1 approach to procurement ¡ Government facing similar challenge ¡ Need to improve Pre-Procurement Market Engagement ¡ Balanced Scorecard approach - “Procuring for Growth” - published in 2016

What is it? ¡ Balances cost against other factors when developing requirements and evaluation criteria l time, quality, social, environmental and broader economic considerations ¡ Already used by HS 2 and Olympic Delivery Authority ¡ Fully defines Value for Money: ¡ l 15 variable Critical Success Factors (CSFs) across seven Strategic Themes Generic Enablers required for all procurements 3

Industry Consultation • Positive feedback from all key stakeholders, incl. Govt representatives 27/10/2020 4

Strategic Themes & CSFs Employment & Skills Supply Chain Health & Safety and Security Environment Community & Legacy Benefits On Time Delivery Employment Supply Chain Accessibility Health, Safety & Wellbeing Energy Efficiency & Climate Change Community Benefits Customer Experience/ Disruption Workforce Skills Supply Chain Management Security & Business Continuity Resource & Waste Management Legacy Benefits Solution Quality Cost Delivery Output/ Outcome Quality Whole Life Costs Production/ Delivery/ Construction Process Delivery to Cost Supply Chain Learning & Continuous Improvement New Amended Compared to CCS ‘Balanced Scorecard – Procuring for Growth’ 5

Generic Enablers 1. Smooth, Visible Future Demand 2. Proportionate Terms, including Fair Payment Terms 3. Passenger/Customer Focus 4. Pre-Procurement Market Engagement 5. Collaborative Business Relationships 6. Behaviours 7. Efficient Procurement and Contract Management 8. Risk Identification, Assessment, Allocation & Management 9. Legislative/Regulatory Compliance 10. Effective Contract and Supplier Performance Management 6

Who should use it? When? ¡ All rail clients and major Tier 1 suppliers ¡ All projects above £ 4. 5 m (app. OJEU threshold) for Works; projects above £ 1 m for Services and Goods ¡ Excluding call-off/tendering activities off frameworks 7

Benefits “Buyers” ¡ Greater assurance that the procurement will deliver a full Value for Money solution; and ¡ demonstrate pursuit of Value for Money to Government and other key stakeholders “Suppliers” ¡ Better informed bid/no bid decisions ¡ A less “noisy” bid process ¡ in the event of success, greater assurance around achieving contracted profit 8

Next Steps 27/10/2020 ¡ Complete Case Studies, based on recent procurements ¡ Handover to Rail Sector Deal Delivery Programme l Developing sustainable UK rail sector at home and abroad (Owner) l SME Growth through Collaboration (Midlands Pilot) 9