Equipping the Estate25 October 2017
The Nuclear Decommissioning Authority (NDA) is responsible for cleanup of the UK’s legacy nuclear sites, spending some £3.3bn annually. More than half of this is spent with suppliers. Ron Gorham, head of supply chain at NDA speaks to NEI about the Estate’s supply chain priorities, which range from innovation to training.
On Thursday, 2nd November the NDA Estate’s seventh annual Supply Chain Event will take place at EventCity in Manchester. One of the largest events of its kind in Europe, the forum is aimed at suppliers of all sizes that can provide solutions for nuclear decommissioning or wish to engage with this market.
The purpose of the event is to connect buyers and sellers, to improve supply chain partnerships, encourage innovation, promote the skills and SME agendas. With currently over 1000 registered delegates and free exhibition space on offer, it’s an event not to be missed. In this show preview, we speak to Ron Gorham to get an insight into the NDA’s priorities for its supply chain. Hope to see you in Manchester.
Please can you give an overview of the supply chain opportunities in UK nuclear decommissioning market?
Ron Gorham: There are 17 sites that make up NDA Estate, including Sellafield, the Low- Level Waste Repository, [the 12 Magnox sites, Dounreay, Springfields and Capenhurst] plus 7 subsidiary organsiations. My role and that of the Supply Chain team is to bring together the various activities at an Estate-wide level, where we can lever additional support including from Government colleagues.
What is really challenging is that the NDA has a 100-120 year programme. It is one of the largest and longest public sector programmes, certainly in the UK and probably worldwide. The supply chain has a significant role to play in the delivery of our mission across our entire Estate with significant and material opportunities for years to come.
The estate carries out a whole plethora of procurement activities from the routine [facilities maintenance, laundry, stationery etc.] to more specialist activities [nuclear waste retrieval equipment] and new buildings and infrastructure some of which that may never be repeated.
Annually the NDA Estate spends about £1.7bn in the supply chain. The dominant proportion of that is spent at Sellafield, which is one of the most complex remediation projects in the world.
Our Estate publishes the vast majority of the supply chain opportunities on the web supported by a procurement plan. It typically looks 12 months ahead, but our aspiration is to extend this to look 18 months downstream. To further bring these to life, at the forthcoming Supply Chain Event, there will be a range of presentations on the upcoming opportunities.
What are you looking for from your supply chain partners?
For nuclear-specific projects and programmes, we are looking for organisations with world- class specialist capability and capacity. We’re looking for them to be committed to the nuclear sector, and for that commitment to include the development of their own staff and supply chains. We are also looking for them to bring innovation, for example, and to constructively challenge what we or the SLCs might think are the right answers.
Cost efficiency and value for money is also paramount as all of the money is spent on behalf of the UK taxpayer. Generically companies who are responsive, flexible, and can problem solve are also highly valued.
We are also looking for transparency; for companies to bring problems to us early so that we can look to problem-solve iteratively and collaboratively.
Collaboration and partnership between Companies and the Estate and also between suppliers is important and we monitor how these relationships are working including whether all contractors are being paid promptly. With some 3000 contractors that work for the Estate and below, that’s a huge task but we take it very seriously.
What role do small and medium enterprises play?
SMEs have a critical role in our supply chain. Some of the SMEs work directly for us or the SLCs whilst many others work for Tier 2 or Tier 3.
Over the last 3-4 years, we have spent approx. £1bn with SMEs across the entire Estate; currently 25% by value across our supply chain spend is spent with this community. That is a visible commitment to SMEs.
We, along with all government departments, have an SME target. NDA has a target to achieve 31% spend across the Estate by 2020. We track this on a quarterly and annual basis. This target is supported by an SME action plan, which outlines the initiatives and the support we give. [The revised action plan should be out after this issue goes to press]. Examples of the various initiatives currently include; SME groups that bring SMEs together to discuss and help remove the barriers to dealing with a large complex Estate. It has led to a simplification of terms and conditions, changes to Intellectual Property, more focus on companies getting paid promptly. We also run an SME mentoring scheme; today about 90 companies have been through the process, which encourages peer-to-peer support.
The National Supply Chain Event has a significant SME focus, and a substantial proportion of the attendees are from small businesses; we have deliberately made it free to attend, partly to reflect that SMEs need to worry about every pound they spend.
What does NDA need to do to meet its SME target?
We have to make trading with the NDA Estate as effective, efficient and as consistent as possible. Any contractor that deals with Dounreay, should have a similar experience to dealings with Magnox. That is our challenge as the NDA Estate, and the supply chain can help us with this.
We need to challenge ourselves as to whether we are taking the right things to market in the right way. There has been
a tendency across government and large organisations to bundle work up to provide bigger packages, which the supply chain at one end likes because it allows them to do more innovative things. But sometimes the way we package work takes it beyond the reach for SMEs. Sometimes, breaking large packages up into small, discrete pieces is the best answer to deliver cost certainty and might be more SME-friendly.
It’s important to note that we use SMEs where they are the best answer. They are typically innovative and very agile, have shorter lines of decision-making, tend to be really customer focused and to deliver value for money. Similarly, we will use large industrial partners where they can be the most effective, help bring together integrated solutions and support the appropriate management of risk.
Are there opportunities for international companies?
We have overseas contractors working across our Estate, but interestingly, about 95-97% of contractors in the NDA Estate are UK-registered. UK industry gets a huge benefit from the supply chain spend of the NDA Estate. That is not discrimination. It’s just that the UK has a long, varied and very positive history of nuclear projects. We have a very mature supply chain that helped to build our nuclear facilities, and now they are helping us tidying up our toys. There continue to be opportunities for international companies, but they have to be able to demonstrate something over and above the domestic supply chain.
Is the NDA Estate facing a skills gap?
Yes, we do have some skills gaps. Current areas of development for us are, for example, safety case writers, while we need to bring in younger individuals to reduce reliance on the support we have received from long- established players and employees. We are working with the government in this space. Another area is health physics, whether it be dosimetry, radiation protection advisors or surveyors; this is an area we nationally have underinvested in historically. Equally, and possibly quite unexpected, commercial skills are also an area for development. With £1.7bn annual spend the Estate requires exceptional commercial skills to ensure that contracts are awarded appropriately, that they are managed to successful outcomes.
We support a degree at the University of Bath to influence and prepare the next generation of professionals and leaders, as well as central government schemes such as the Commercial Fast Stream Programme.
What are the other issues facing the nuclear supply chain?
This summer, the Brent price was close to rock bottom again, meaning a large number of suppliers for the traditional O&G sector were looking to diversify. Contractors that are seeing downturns in other local sectors or global markets, look to our 120- year programme as a potential market for involvement. In one respect, competition is generally welcome, but it occasionally puts pressure on our existing supply chain. We need to manage those pressures both today and in the future. O&G, for example, has its own regulatory environment, which is similar but different to nuclear. Understanding the different standards, security etc. takes time.
How does the NDA view innovation in the supply chain?
We have a huge investment in R&D. Circa £85m is spent across the Estate on research and development [mostly through the SLCs, with around £5m spent directly supporting innovative projects and concepts]. The vast majority is needs driven, but we do have a central NDA team that looks at blue-sky opportunities. We have jointly funded a series of projects with Innovate UK for a number of years and have just announced the first successful tranche of companies supporting a recent initiative. As part of this, 15 ideas have been shortlisted in a £3m competition to find new ways of cleaning up some of the UK’s largest nuclear hazards.
The nuclear sector has driven innovation since 1946. It’s in our DNA. The difficulty I think we have occasionally is recognising that processes which are straightforward in a non-nuclear environment can require major modifications the moment you begin to deploy them for a complex nuclear site. The balance for us is to develop proven technologies from other sectors, O&G, fisheries, MOD and to assure they can work safely in our environment. Our key messages is that whilst challenging the rewards can be significant.
Twenty organisations involved with skills for the nuclear industry will be brought together in a specific zone to offer advice and guidance on skills within the industry. There will be presentations on skills-related issues from acquisition to development and retention.