Abstract:
The A1 Birtley to Coalhouse project in Gateshead, Northeast England required the widening and realignment of a key highway to alleviate congestion, improve journey time reliability, and boost local economic growth. The client (National Highways) engaged Costain Jacobs Partnership to design and construct the project, who in turn appointed Cementation Skanska as specialist subcontractor for approximately £ 25M of bored piling and ground improvement.
Business challenges on the project included resource demand due to the major scale of the geotechnical works, global supply chain volatility and inflationary cost pressures unprecedented in recent times. Cementation Skanska worked collaboratively with the client’ s team to secure key resource availability through a variety of proactive measures, including the securing of internal and external plant and labour resource, and the establishment of a temporary concrete batching plant on site dedicated to delivering the geotechnical works.
The scheme was delivered as part of a programme of works using a collaborative procurement framework. Common practice, however, remains for the second-tier supply chain, including specialists, to be procured using traditional transactional procurement processes, which commonly misalign interests. The likelihood of change, particularly around programme interfaces, was perceived to be very high. A traditional lump sum commercial model would, therefore, have attracted a substantial risk premium – exacerbating existing cost pressures – and misaligned interests around change management.
By working to really understand the drivers of project success a collaborative commercial model was developed, which aligned the relevant parties to focus on delivering those needs. Specifically, time was a critical success factor due to commitments around the open-for-traffic date. A transparent cost-reimbursable model using target dates with commercial incentives aligned the interest of all the parties on delivering a safe and high-quality project to an optimised programme.
The paper will discuss the approaches taken to various business challenges faced on this project.