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GO Interview – Martin Rowark

Tuesday May 18th, 2010

Martin Rowark, Head of Procurement at Crossrail, speaks to GO Features Editor Morven MacNeil about the major developments taking place within procurement at the company and his thoughts on supplier accreditation.

Crossrail Ltd was established in 2001 to promote and develop vital links to meet the needs of people and businesses throughout the South East, and to ensure that London continues in its role as Europe’s leading financial and business centre.

It was a 50/50 joint venture company between Transport for London (TfL) and the Department for Transport (DfT) until 5 December 2008 when it became a fully owned subsidiary of TfL. Crossrail represents a real commitment to the development of new services to tackle the lack of capacity and congestion on the existing rail network in the capital and the South East. The £15.9 billion Crossrail route travels between Maidenhead and Heathrow to the west of London to Abbey Wood and Shenfield in the east via new twin bore tunnels under central London

GO spoke to the Head of Procurement at Crossrail, Martin Rowark, about the key developments taking place within the organisation and the benefits of using supplier accreditation.

What are the overall aims and objectives within procurement at Crossrail and how will the project provide value for money?

Value for money is quite apparent at macro-economic level, but what does VfM mean for us on the project? Well, VfM is actually driven by perspective. We are looking to secure best value for the public. We do not just specify for requirements that we can literally source from down the road, we have spread our offers as wide as possible to all suppliers that are capable of delivering the works. It is more about weeding out poor value than the other way around. We are achieving VfM as long as we deliver under the £15.9 billion budget for the programme.

Could you give our readers an update on the major developments within Crossrail since you became Head of Procurement?

I have only been with Crossrail since December 2009 but we have been extremely busy in that time. We have come to the end of our procurement for design services, which was against a framework. Basically, the design of Crossrail is very well progressed; we have let a large portion of the service contracts with Crossrail Central, the delivery partner (Betchel, Halcrow and Systra) and the programme partner (Transcend) who work together to support us both at programme and project level.

The enabling works which have also been procured through a framework give us a lot of flexibility. We still have some work to award but the most significant enabling works have largely been let We are working at Royal Oak station in Paddington, and we have works commencing at Pudding Mill Lane near the Olympic Park – sites of two major portals for the tunnelling operations. There are a significant number of sites across London that have seen enabling works. We have taken down the odd building in the centre of London, not to mention across where we are going to be touching Paddington, Tottenham Court Road, Centrepoint, and through to Whitechapel.

As far as the major capital works are concerned, we are out in the market for our first tunnelling contract. We still have to buy rolling stock as well. We are warming up the market globally to look to procure a set of trains well in advance of the completion of the railway to ensure an adequate period of trials and testing of the rolling stock.

Are small and medium-sized enterprises effectively engaged in public procurement? If not, what else can be done to engage them?

Engagement of SMEs and understanding of what our supply chain looks like is critical. Many SMEs, to be frank, do not really want to work directly for a government client for lots of very good reasons. However, they do need to know of opportunities coming from our major tier 1 appointments. We have some of the world’s best contractors forming up into joint ventures to compete for this work, and many SMEs want to know when that work is let over the next few years so that they themselves can pitch for each of the opportunities.

With regard to supplier engagement, particularly for tier 2 and 3 suppliers and contractors, we put our opportunities through CompeteFor. We are very close to CompeteFor and are very much following the Olympic 2012 model in terms of supplier engagement. Since my arrival, we have established a supply chain management team within Crossrail and we are looking very soon to republish our procurement website to make it much clearer as to how potential suppliers can get involved. This will follow on from our new procurement policy which explains how to get engaged with our principal requirements.

How important are framework agreements in achieving best value on commonly purchased goods and services?

Crossrail has had some very successful frameworks, some of which have been very high profile. I mentioned earlier the design framework. Design services is a hugely complicated subject in itself. Crossrail decided years ago that we would own the design in the construction sense. In other words, we would provide the design and our construction contractors would simply build to that design. But to do that you need to employ a significant number of the design houses in Europe and then deploy them as you see fit going forward – you can’t have an absolute model. So a global framework is where we can best allocate the resource available to us. We’ve led all of our design packages on that basis. It means we can mix and match design services and engineering suppliers as opportunities arise and changes occur.

The other side of the coin is with enabling works. When you go out to procure enabling works for something the size, scale and complexity of Crossrail, you need to put in place something that has significant flexibility while the designs are developing. A framework gives you that flexibility. So for the enabling works we again have a series of panels within our framework for a range of works and services, and basically we have been calling off that to some success. As I mentioned earlier we have largely let our enabling works at the moment. We have a lot of utilities still to do, but the works are now well under way.

Talking about common components and commodities, we may explore frameworks in that respect too. Going forward, we have to balance the fact that we are going to be employing some of the world’s leading contractors who have very well developed relationships with their suppliers, with the fact that we may ourselves be looking to buy certain components from the supply chain to enable them for our own leverage in terms of reducing price and increasing quality. But.we have to be quite clear that if we issue a framework and put the suppliers through the expense of getting onto that framework, we will use it to its fullest extent. An often-found problem in terms of frameworks is that while they can be quite expensive for suppliers to get on to, they can also be under-utilised.

What are the main benefits that end-users receive as a result of closer working between the public and private sectors?

There is the quality discussion, but there is also a cost discussion to be had. We are utilising what we call optimised contractor involvement – that means bringing our contractors in at the right time in the procurement and construction phase so that they can bring their private sector expertise to bear on our designs and inform those designs. The contractors will benefit from that in terms of financial incentivisation, and ultimately the end-users will get a product that represents better VfM as costs will be reduced and quality will be enhanced. We try to encourage that throughout the supply chain. The rolling stock design, for example, will be heavily influenced by the private sector and that in itself will be a benefit to the end-user. We will be looking for innovation in terms of interiors and generally anything that enhances the experience of travelling through Crossrail. That will all be fully informed by the private sector. Crossrail would not be going ahead if it wasn’t for private sector cash. We have Canary Wharf building a brand-new station, BAA building a flyover at Heathrow, and the City of London injecting a large amount of capital to make sure that Crossrail goes ahead. So that is nearly £1 billion coming from the private sector to Crossrail.

What is the most significant change that you have seen in the past few years with regard to procurement?

I was heavily involved in the procurement of London 2012, and some of the innovations we looked to bring in there – when we were drafting the procurement strategy and the approach to buying the Games – I see as innovative. We weren’t the first, TfL were the first in terms of using eProcurement and eTendering tools, but the Olympics certainly developed that to an extent. I think for me this has been one of the fundamental changes – the ability to have web-based procurement. On a sustainability basis alone it stands up to any form of interrogation, but it also makes us very efficient. It means we can transfer huge amounts of information, bearing in mind the scale and scope of some of the works that we buy, very quickly if not immediately. We don’t drown in paper. And there are the evaluation tools that we now use – we are acutely aware of the degree of governance we need to be seen to be utilising when evaluating these tenders. There is a huge amount of government money being spent, and our eEvaluation tools help us be transparent. The whole process is very contained and you can see with a lot of clarity how we are going about our evaluation process.

Supplier accreditation is becoming an increasingly important area for buyers and suppliers; how does this fit in with better quality procurement?

Supplier accreditation is very useful, as we are very keen to up the quality of the bids we receive. We also want to streamline the process for suppliers. We anticipate that many of the key suppliers we will be doing business with will actually be looking to compete on a number of occasions, not just one. Accreditation removes a lot of repetition in terms of completing Pre-Qualification Questionnaires and to a lesser degree Invitations To Tender. So, with accreditation you can develop a group of bidders that you have confidence in to provide you with a range of very high quality bids.

How do you see Crossrail’s procurement division developing over the next five years?

Large government programmes I tend to see as sort of a camel’s hump. Right now we are in the first hump – we have very large construction contracts to let, and as I said earlier we are also very excited about the procurement of the rolling stock. Network Rail is proceeding with their service procurement as well, so a lot of effort is going in and the team is growing. In terms of transactions, we have increased dramatically over the last few months and will only keep on increasing for at least another 18 months to come.

Once the major contracts have been let there will be a slight lull, and then towards the end of the programme there will be the second hump, the final bits and pieces we need to buy to make Crossrail happen, for instance service contracts, facilities – all the things you wouldn’t buy until much later in the programme. They tend to be quite tricky – not necessarily high value, but lots of transactions. And again, the team and the scale of what we are undertaking will grow. So you have a camel’s hump type profile of what procurement is doing. We will probably have a significant role to play right up until Crossrail is delivered.

Thank you for speaking to GO

Profile – Martin Rowark MRICS

A Member of the Royal Institution of Chartered Surveyors, Martin Rowark commenced his career in construction as a management contractor. Joining Railtrack at their flotation he worked at Great Western Zone and later Southern Zone, leading the Contract and Supply function.

In 2001 Mr Rowark joined leading international construction consultants Davis Langdon LLP as Head of Civil Engineering and Railways, operating from London. This role involved commissions on the Channel Tunnel Rail Link, West Coast Route Modernisation, White City Development, ERTMS and Metronet Trans4m/Alliance. Following this Mr Rowark acted as Deputy to the Head of Procurement for the London 2012 Olympics. Most recently he has been advising the TfL team delivering the East London Line.

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