As part of our commercial acumen training, we have the pleasure of bringing in industry speakers who come from the supply chain to speak to our workshop attendees to bring an external perspective. Their insights and experiences are invaluable in consolidating the principles and learnings from the training. Each speaker provides a different perspective from a consultant, contractor or construction perspective.
One of the industry speakers who brings significant experience and knowledge is Graham Darlow (see LinkedIn profile at Graham Darlow | LinkedIn). Graham Darlow was previously the Chief Executive of Fletcher Construction and held other senior management roles within Fletcher prior to this role, and he has a wealth of experience both on projects and in senior leadership roles. From his recent commercial acumen industry speaker presentation to one of our clients, I have taken the liberty with Graham’s permission of summarising his top ten tips to drive value for money outcomes from your procurement and delivery of infrastructure projects as an infrastructure delivery agency which are as follows
1. Inform the industry on your project pipeline
This is a really critical part of building interest in the projects you are bringing to the market. Put simply, the earlier the market and your supply chain partners can understand the projects that are part of the pipeline, the earlier they can start to plan and prepare to assemble the best team and a value for money offering to you as a client. I have written a separate blog on this which supports Graham’s insight around this which can be found at The importance of transparency in the infrastructure pipeline of projects in delivering successful project outcomes | BRS (brsresults.com)
2. Be clear on the purpose, objectives and aspirations
At the front end of the project planning, it is really important from a client perspective that you take the time to develop the purpose, objectives and aspirations of the project. This work that is done up front informs the market on what is important to you and sets the true north for the market to develop their win themes, resources and bid strategy to deliver the outcomes you are looking for from the project. Taking the time to do this properly up front pays back enormous dividends downstream for your projects.
3. Nail-down the scope
One of the biggest challenges to successful project delivery is scope management. Put simply, it is not always done well by clients whereby scopes are often brought to the procurement process that have not been finalised or well thought through. This presents challenges for the supply chain in being able to price the project as well as understand exactly the outcomes or deliverables required by the client. Scope management when done well has a significant impact on delivering a value for money outcome.
4. Select the best contract and structure
Selecting the right procurement model to deliver your project is critical. Using a Multi-Criteria Analysis (MCA) approach to selection of your procurement model to identify the scope criteria for your project, which risks need to be managed effectively and which procurement model will ensure the project can be delivered effectively. Putting these steps in place with the appropriate contract means you will the best commercial response from the market. Choosing the wrong procurement model and contract structure will mean the market will price in risk accordingly and you won’t get an acceptable commercial response from the market.
5. Allocate risk wisely and transparently
This for is possibly the most important tip. Risk allocation and ensuring risk is transferred to the party best placed to manage the risk is critical. I have written a detailed blog around this which explains how important this is for the supply chain which can be found at The importance of risk allocation through the procurement and delivery of a project | BRS (brsresults.com). The earlier the risk allocation matrix tool can be introduced to the procurement process, the more transparent it is for the supply chain to be able to price and resource their project team effectively.
6. Hold appropriate contingency for risk
From a client perspective, this is critical. For this risk items that are not fully scoped or cannot be fully defined at the point of the procurement process, it is important that there is appropriate contingency. This requires good independent estimating, an open approach to budgeting up front as part of the scoping of the project as well as a good understanding of the scope, the risks and who is best placed to manage the risks. Managing and allocating this contingency through delivery is an important part of successful project delivery.
7. Engage the best
From a client perspective choosing the best design team, contractor team and engineer to contract is a key ingredient for success. The design team has an enormous impact on the set up of the project and the constructability of the project. They also have a disproportionate impact on cost as delays in design of lack of fit for purpose design has a massive impact downstream during construction. Getting the right design team by choosing the right people is critical.
The same applies to the contractor team. Again, choosing the right people to work with who are collaborative, focussed on value for money and win/win outcomes with the client for the project is critical. Contractors drive a project and the right collaborative contractor makes project delivery easier as well as enhances relationships with the client and other key stakeholders.
The engineer to contract is also an important role that the client needs to fulfil. They need to be objective, firm and fair and honest and upfront with all their dealings with all parties on the project. The ability to also resolve project matters quickly, know the scope and requirements of the project well as well as smooth the way for projects to be delivered are critical elements of a successful engineer to contract.
8. Monitor performance and reward success
Contract reporting is critical for a client to set up right from the start of the project. Regular contract management meetings with regular reporting enables the client and the project team to report progress, proactively deal with any challenges together as well as hold each party accountable for what they need to deliver. This is important in ensuring that the outcomes identified at the start of the project are delivered.
Further, the opportunity to reward performance should be set up from the start of the project. This could be in the form of setting up Key Result Areas (KRAs)/Key Performance Indicators (KPIs) from the start of the project that drive the right behaviours as well as allow your supply chain partners to be rewarded for performance. This could be a combination of cost and non-cost KRAs that ensure the project team is managing effectively the things that may keep you up at night as a client.
Success can be rewarded in many ways. It could be through some financial incentives linked to the KRAs of the project through a performance pool or it simply could be additional work or recognition of a job well done. This positive feedback is important to your supply chain partners.
9. Have a comprehensive change management process
Projects are delivered by people. People are who we work with not organisations. What is important when delivering projects is to ensure that we take people along for the journey. This tip encapsulates everything from ensuring we build a constructive high performing culture, to the governance we set up on the project through to the regular communication that occurs around what is going on around the project with project team members, home organisations and other key stakeholders. We need to take everyone along for the journey. This requires us to manage the change effectively, ensure we explain the why around the project and what we are trying to drive along with ensuring all stakeholders and community concerns are addressed early on and managed effectively on the project.
10. Hold up your end of the bargain
This is an important tip to finish off on. The importance of delivering on what we promised as a client. This could be everything from the governance of the project in ensuring decisions are timely, we don’t hold up project issues unnecessarily right through to resources, risks and other areas of the project we made commitments to address. Trust is important with our supply chain partners and meeting our commitments is an important part of building that trust. Trust equates to speed on a project which leads to value for money. Being able to rely upon a client to deliver on their commitments is critical for a successful project.
Graham has done a terrific job of highlighting ten key commercial tips to delivering value for money outcomes on your projects. It is worth reflecting on these and asking yourself whether your organisation is delivering on these. The more we are able to meeting these commitments, the greater chance we have of project success and delivering public value for our communities.