In the wake of the euphoria and national pride of this summer’s London Olympics, this November we hosted a breakfast seminar led by Paul Dickinson from the Olympic Delivery Authority who was head of procurement for the Olympic Park.
He discussed some of the core principles behind the rigorous process that enabled one of the country’s largest and most complex construction projects to be delivered on budget and on time.
I also spoke at this event alongside Paul and KPMG. The seminar covered current trends in procurement, focussing on cost efficiency, auditability, risk management and the importance of developing a real understanding of the supply chain.
Mr Dickinson was involved in the Olympic project for six years, overseeing its procurement, delivery and its subsequent deconstruction/tranformation. The mammoth task of clearing the ground at the 2.5 km2 site began back in 2007, with build of the infrastructure and venues starting the following year. The team successfully completed all of the major buildings as planned in July 2011, a year ahead of any previous games, allowing time for extensive testing. The core values behind the games of raising the bar and using the power of the Olympics to inspire change were also incorporated into the procurement and construction process.
There was a real drive to move forward and do things differently, including being ‘inspirational’ in the way that suppliers were dealt with; being open and respectful; working as a team across the massive number of suppliers; and delivering something distinctive. The values of equality and diversity, and protecting the environment by delivering the greenest ever games as well as involving the local community, for example by providing apprenticeship schemes, were also ingrained within the construction process.
Mr Dickinson and his team then had to manage 96 tier 1 suppliers and 869 critical tier 2 and 3 suppliers – the average number of daily site workers was 10,490. As in any project, managing the risk of suppliers’ financial stability was a key concern - only a handful of suppliers became insolvent over the period, with no impact on the project, and Mr Dickinson attributes this to an in depth understanding of the supply chain. He said that while the construction of the Olympic Park had pushed boundaries in this area, it still needed to go further.
The team also had the challenge of coping with logistical issues such as a site which had only two access points, but would involve huge contractor traffic with 529 daily vehicle movements of materias. It was estimated that the vehicle movements needed for concrete delivery alone would amount to 67,000! The solution – a concrete plant was constructed on the park. Rail deliveries were also used where possible.
Mr Dickinson stressed that using NEC3, a best practice, collaborative procurement contract, supplier contracts were not just seen as pieces of paper, but were actively used with procedures and timescales strictly adhered to. The process allowed issues to be raised early and resolved before they escalated – this required a different behaviour, with trust and cooperation on both sides. It proved successful with only a handful of legal disputes over the six year period. Contracts and costs were actively managed to avoid any surprises, and there was a huge amount of scrutiny to ensure value as the money was coming from the public purse. Mr Dickinson also emphasised the need for quotations to be robust in order to avoid issues further down the line.
The journey to transform a brownfield site into one of Europe’s biggest new parks with world class sports facilities was one of the most complex projects the country has seen involving 120 contracts; 900 suppliers; £150m spend per month; and 40,000 contracts. It provides an important learning legacy for procurement professionals – a robust process that is auditable, can incorporate change and is managed with vigour is the key to success. As Mr Dickinson concludes, good practice produces good results.
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