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The Supply Chain
The NDA will be responsible for a work programme worth many billions of pounds and lasting for decades. For this programme to succeed, the NDA has to develop an extensive, qualified supply chain.
This supply chain will range from contractors with the ability to bid for complex decommissioning and clean-up work, and the resources
necessary to provide the senior managers for the Site Licensee
Companies who will be responsible for execution of the work, through major project contractors to suppliers of specialised services and equipment.
The
NDA Proposed Contract Model
This is the current
proposed NDA Contracting Model. However, it is subject ultimately to
NDA acceptance and is, therefore, provided for information and current
thinking. The NDA Proposed Contracting Model can be accessed here.
Structure of the supply chain
The key elements of the current contracting model are as follows:
- Parent organisation(s) would bid to own the Site Licensee
Company (SLC). It may form a holding company to hold the shares.
This holding company would have no management function.
- As part of the bid, the parent(s) would negotiate a contract
between the SLC and the NDA. SLC = Contractor
- On winning , the parents would appoint the board of the SLC and
cause it to enter into the negotiated contract.
- Tier 1: SLC with parent organisation(s) senior management who
are capable of managing the activities of the SLC.
- Tier 2: Major project sub-contractors to the Tier 1 contractors. Tier 2 contractors may for example undertake the design and execution of large projects at a site (for example a new waste storage facility).
- Tier 3: Sub-contractors and suppliers to either Tier 1 or Tier 2. This may include highly specialised work or may include general support services.
NDA Draft Procedures
CT-05 Use of Performance
Based Incentives
The NDA will contract directly only with the Tier 1 contractors. However conditions may be included in Tier 1 contracts to encourage the use of lower tiers to help carry out clean up work.
The NDA's goals
The NDA aims to create a diverse and robust supply chain of contractors. The competitive supply chain will:
- Encourage innovation in technology and management techniques
- Provide diversity in employment and training opportunities
- Facilitate technology exchange between sites and with other sectors
- Deliver value through competition and innovation
The NDA will strive to provide a stimulating and profitable business environment for suppliers and their employees. This is a sector where the future workload is predictable and innovation is encouraged. It will be rewarding for suppliers and their staff who deliver quality and value.
An open market
The NDA will create an open and transparent market for services in nuclear decommissioning and waste management. The NDA will ensure that:
- Opportunities will be well publicised
- Qualifications for contractors wishing to bid will be clearly established
- The basis of assessment of tenders will be announced in advance
- Results of tenders will be published
- Unsuccessful bidders will be given meaningful feedback
In developing its contracting strategy the NDA will bear in mind the capacity and capability of its supply chain. It will pace development to suit the ability of contractors and suppliers to respond. There will be demanding opportunities to encourage them to invest in new technologies and skills.
Participation in nuclear clean up will be opened to all who have the necessary resources, skills and commitment. There is no inherent preference for companies already in the industry or UK based. Healthy competition provides the best value for the taxpayer's pound.
Competition and innovation
Central to the NDA's strategy will be value for money. However, the NDA will expect its contractors to achieve value by innovation and working smarter, rather than by simply cutting their cost base. Innovation, driven by competition between qualified and experienced contractors, will contribute greatly to enhance value.
Role of the managing contractor as innovator
At most sites it is likely that the managing contractor will become the owner, for the duration of the contract, of the site licence company. Its management team will be expected to apply innovative techniques in management and technology.
The vast majority of the employees of the site license company will however remain from one contract to the next.
Opportunity for companies and individuals
The creation of a robust supply chain will open up greater opportunities both for companies and individuals, both at Tier 1 and lower levels.
There will be plenty of new opportunities for major companies or consortia in the Tier 1 market. Currently in the UK only AWE at Aldermaston is operated on a similar contract basis. There is great potential for suitably qualified companies who will be able to collaborate both nationally and internationally.
Increased opportunities will also flow down to lower tier contractors, who will benefit from the NDA's policy of transparency in Tier 1 contracts. This will attract new entrants with relevant skills or technologies from other industries.
Staff in the nuclear decommissioning sector will in the future have a more diverse choice of potential employers. The market for their services will be more dynamic and they too will benefit from the competitive environment. Staff will be able choose careers with a greater variety of companies who offer a more diverse range of opportunities, cultures, and training.
Regulatory Indicative Timelines
The posted indicative Regulatory timelines were developed
in concert with the LMU Regulatory and Contracts Teams. The intent
was to identify the Regulatory actions necessary for 1) the
re-licensing and re-authorisation timelines for certain sites by 1
April 2005; and 2) the licensing and authorisation timelines for
sites to be competed. These timelines then feed into the Contracts
workstream. The NDA is still to decide on the competition schedule.
These timelines are presented as information only.
Regulatory
Indicative Timelines
Regulatory
Indicative Timelines
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"Developing a long-term viable supply chain for the NDA is a major objective within the remit we have given the LMU. The fact that you are all here today demonstrates to me that not only is the LMU delivering but that there is genuine and considerable interest in the opportunities for work in the nuclear clean up market."
Brian Wilson, Speech to Suppliers Forum, 1st April 2003
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