An exclusive look at how Europe’s largest infrastructure project is working to boost top contractors’ standards using its performance management framework.
- How it works
- Programme-cost balance
- Treasury interest
- General industry support
- Contractor warnings
- Ironing out issues
- Increasing contractor involvement
- Simple is best
Construction’s mantra is usually about delivering projects on time and to budget. The higher profile they are and the more taxpayers’ money they involve, the more critical this is.
For Andrew Wolstenholme, chief executive of Europe’s largest infrastructure project, Crossrail, these aims are joined by another: leaving a legacy that contributes to improved performance in the UK construction industry overall.
To achieve this, Mr Wolstenholme and his senior leadership team have sought collaboration and co-operation from Crossrail’s major contractors that is previously unheard of.
“What we’re really after is sound, solid performance, a culture of continuous improvement and the opportunity for suppliers to learn from each other”
Andrew Wolstenholme, Crossrail
Under Crossrail’s performance management framework, details of which Construction News can exclusively reveal for the first time, contractor chief executives were asked to take a leap of faith, share their ideas and reveal innovations.
Crossrail’s aim is to ensure that not only is the project delivered to better and safer standards than any before it, but that the £14.8bn programme will create the conditions to help future major infrastructure projects, such as High Speed 2 and the Thames Tideway tunnel, do the same.
Mr Wolstenholme believes the opportunity for contractors to collaborate across a series of what are major schemes in their own right, under the umbrella of one major programme, was too good to miss.
Crossrail called in the bosses of its biggest contractors and told them it needed their support.
The performance management framework was born out of those discussions.
How it works
Crossrail is attempting to improve performance by setting KPIs and objectives on which contractors can compare performance and improve through sharing best practice. It measures inputs and outputs on each major contract across six key areas:
- Health and safety;
- Quality (of process and product);
- Community relations;
- Social sustainability;
Teams are given an input and output score, which are amalgamated to give an overall score between 0 and 3.
Crossrail has set a benchmark of 1.3 as being the level it regards as compliant.
For example, under the commercial category, contractors are asked to accurately forecast expenses up to certain thresholds and are scored on the predictability and accuracy of these forecasts.
Mr Wolstenholme says the framework is taking programme and cost efficiency and “trying to find the correlation between the two”.
“What we’re really after is sound, solid performance about what we’ve bought, and an aspiration and culture of continuous improvement and the opportunity for suppliers to learn from each other that is unique on Crossrail.”
There have been three performance monitoring periods so far: the third closed last month, with results expected in the spring.
“I get no prizes for someone crossing the line first; I only get a prize if they all cross the line together”
Andrew Wolstenholme, Crossrail
The first monitoring period ran from April till October 2012, and the second until April 2013.
The client goes onto sites, formally, twice a year to evaluate the inputs and outputs being reported. Persuading contractors to share information about innovation and overcoming challenges on site is notoriously difficult. Have the chief executives been willing to listen and share?
Mr Wolstenholme says: “What it created is a constructive tension for [contractors] to want to improve their own processes. Why? So they can deliver their own contract more efficiently.
“I get no prizes for someone crossing the line first; I only get a prize if they all cross the line together. So I am doing this to make sure the centre of gravity of this supply chain is improving, that the culture and leadership on this programme has a line that’s going north-east and is sustainable across the industry, as well as helpful to Crossrail.”
The framework has attracted the interest of the Infrastructure UK arm of the Treasury (see box).
While it is not intending to set up a single central supplier performance measurement system for all infrastructure clients, it is considering how KPIs used by clients such as Crossrail could be monitored and shared.
The recently established IUK Major Infrastructure Tracking team wants to use output measures to improve performance on its top-40 identified major infrastructure projects. It is also looking at systems employed by Network Rail and other clients through the IUK Client Working Group chaired by Simon Kirby.
“Other clients are beginning to acknowledge that something that looks very similar to the work we have done can probably work across other areas”
Martin Buck, Crossrail
Crossrail commercial director Martin Buck says: “There has been some concern that it has to be done sensitively to allow other clients and industry partners adapt it for their own requirement.
“But as time has gone on, I get the sense that other clients are beginning to acknowledge that something that looks very similar to the work we have done can probably work across other areas.”
Crossrail has itself tweaked the model since it started collating the data in response to contractors’ concerns. One of these was over the extent to which the projects on which firms have been scored should be wholly comparable.
Projects range from a £25m deal for advance works at Farringdon (C430) to a £500m western running tunnels (C300) contract.
Contractors have been asked to report back on the same KPIs across work from underground tunnelling to main station new-build projects.
General industry support
But generally, the contractors are supportive.
Skanska chief executive Mike Putnam tells Construction News he had “not seen anything quite so sophisticated” within all the countries Skanska operates, and said he would be pleased to see a similar system implemented on future major infrastructure jobs.
“I am positive about its development across other programmes, as we would potentially have one standard rather than lots of different standards”
Mike Putnam, Skanska
He says: “It is an evolving, good approach that has the potential to be used on other schemes, but it needs to be used intelligently and wisely so it is driving the things that really matter. It has got to be meaningful, targeted and specific.
“We’re always trying to improve as a business but here you have something that is adopted by a key client and that is potentially quite powerful. I am positive about its development across other programmes as we would potentially have one standard rather than lots of different standards.”
Contractors say the framework gives the government a good benchmark for performance, but warn there must be a limit on the time and cost it takes to compile the data.
Morgan Sindall managing director Graham Shennan says he has no doubt the framework will be a catalyst to generate continued improvement across future infrastructure projects.
Costain managing director for infrastructure Darren James says the contractor is in favour of the framework and encouraged its use in pre-consultation before the contracts came out.
“The fact that HS2 is already engaging with us would suggest that they have already started learning from Crossrail”
Darren James, Costain
The Costain-Skanska JV has learned “bits of best practice” from other contractors, he says, while disseminating knowledge to others on areas such as design for health and safety where it has been recognised as ‘world-class’ under the Crossrail framework.
“We routinely look at things we have learned from programmes and apply them to other [sectors], such as nuclear processes, rail and highways,” he says.
“We have encouraged IUK to engage with this and encourage a level of consistency [between programmes]. The fact that HS2 is already engaging with us would suggest that they have already started learning from Crossrail.”
Crossrail’s size makes the scale of its ambitions unique, but it is not new for clients to demand performance data. Network Rail, for example, uses its PRISM tool to monitor both the supply chain and its own capability as a client on KPIs such as whether projects are on time and meeting safety and sustainable development targets.
“The aim is for everyone to get to the highest level rather than using this to beat up on the people who are not performing so well”
Martin Buck, Crossrail
Major infrastructure schemes, most recently the 2012 Olympics, have monitored and shared performance data. Contractors themselves use performance management tools such as the EFQM Excellence Model to identify where improvements need to be made in their businesses.
The value of measurement and benchmarking has been promoted for years.
Sir John Egan’s industry task force asked that KPIs be established by the industry in his Rethinking Construction report back in 1998.
But the 2009 Constructing Excellence report Never Waste a Good Crisis by Andrew Wolstenholme, before he became Crossrail chief executive, highlighted a lack of long-term performance data which needed to be addressed to improve performance against KPIs.
Ironing out issues
There are still “inconsistencies” with the Crossrail framework, according to some, and it will need continual refinement to be applied across all sectors. Other issues that need resolving include how variations on live projects, for example alterations to designs or contracts, should affect scores.
“If you achieve that and Crossrail is looked at as a leading light of programme delivery then anyone associated with it will be in a great position”
David Whysall, Turner & Townsend
Project teams’ willingness to collaborate has been crucial to keeping the £14.8bn scheme on time and budget so far. Crossrail can’t afford to lose that - it has to ensure contractors don’t pull back from joint working in an effort to maximise their own KPIs.
Mr Buck says: “We are trying to avoid people comparing by being competitive and trying instead to generate positive behaviours so everyone is learning.
“The aim is for everyone to get to the highest level rather than using this to beat up on the people who are not performing so well. Peer pressure and industry pride does that far better than we ever do.”
Increasing contractor involvement
As the framework has developed, contractors have taken a greater role in monitoring and reporting data, but also integrating the system into their own management processes, Mr Buck says.
Turner & Townsend associate director David Whysall, who has been seconded onto Crossrail for more than two years, says: “You need the collective supply chain to move up and get to world-class performance levels.
“If you achieve that and Crossrail is looked at as a leading light of programme delivery then anyone associated with it will be in a great position.
“Industry hasn’t historically been great at sharing knowledge or learning; IUK is a great force in that.
“There is benefit in sharing data together; market-based leverage is part of it, but it is also understanding why firms are performing how they are and how supply chain performance is linked to how you set up as client.”
Simple is best
Mr Wolstenholme recognises that the framework cannot be allowed to become too cumbersome.
“It needs quite a lot of administration so we have to weigh up the value of that. But I think the supply chain is realising there is a value for them in self-administering this process so they can see over time it’s a tool that is not imposed, but has been put in place to help the supply chain improve.”
Future infrastructure clients will also need to decide whether it would be useful to develop a standardised performance framework such as the one used by Crossrail, which could be adapted for different types of projects, from utility diversion works and underground tunnelling to new build stations and fit-out.
“You could see some real benefit on that cross-industry training so everyone is prepared for the next job that would be done in the same way”
Martin Buck, Crossrail
In the meantime, the statistics on Crossrail speak for themselves, with an average 24 per cent improvement in scores from round 1 to round 2, including a 51 per cent improvement in health and safety, 36 per cent in social sustainability and 19 per cent in quality.
Mr Buck says: “A number of contractors have said to me they have to induct workforce and management on every project they go to relative to each client’s way of working and methods of measurement.
“If they get more commonality they would create training and development process for their own teams - they could justify the investment if they only have to do it once.
“You could see some real benefit on that cross-industry training so everyone is prepared for the next job that would be done in the same way.”
Crossrail acknowledges its framework needs further refinement and that process is continuing.
With billions of pounds of UK infrastructure schemes on the horizon, its desired legacy will come if it serves as a template that is used by clients and contractors alike to ensure their performance is world class.
Crossrail commercial director Martin Buck discusses how its contractors are raising their game
Round 2 improvements
In round 2 there were 37 examples of ‘world class’ performance identified by Crossrail.
Round 1 to round 2 saw an overall average improvement in scores of 24 per cent:
- 51% Target Zero (health & safety)
- 19% Quality
- 24% Community relations
- 36% Social sustainability
- 14% Environmental
Treasury tracks infrastructure client benchmarking
The major infrastructure tracking unit set up within the Treasury will look at client benchmarking, including the Crossrail framework, to monitor and improve delivery of the government’s priority infrastructure projects.
The new group, which will sit within Infrastructure UK, has been tasked with tracking the progress of the top 40 UK infrastructure schemes and over time will be expanded to cover a broader range of performance metrics and benchmarking.
The Treasury is not, at this stage, intending to set up a single central supplier performance measurement system across infrastructure clients and says it does not favour any particular client’s system or approach over another. But as part of the government’s drive to cut the cost of infrastructure by £2bn a year through theInfrastructure Cost Review, IUK’s remit covers improving all aspects of delivery, including the sharing of best practice and performance data across clients and sectors.
This could also include more standardisation “where appropriate to reduce the level of bureaucracy to suppliers”, according to a Treasury spokeswoman.
She said: “To improve transparency across sectors, we will consider how existing key performance indicators, such as those used by Crossrail or Network Rail, could be used to measure common categories - for example, safety performance or collaborative behaviours.
“We will consider how the recently established MIT team will use these outputs to monitor and improve delivery of the government’s priority infrastructure projects.”