Whether you look at the challenges facing infrastructure programmes from a local, regional or global perspective, they are usually universal. Issues such as workforce skills shortages, professional capability and supply chain resilience are common across almost every infrastructure and built environment programme – including nuclear decommissioning investment projects like Sellafield. At the same time, these are exactly the kinds of challenges that infrastructure investment has a real opportunity to address effectively.
The way major nuclear projects and frameworks can help build a capability in local geographies – that remains long after specialist construction and decommissioning work on-site has finished – is by engaging with small and medium-sized enterprises (SMEs) and investing in local workforce skills.
The potential for projects to leave behind more than just physical assets is huge. The best ones don’t simply deliver critical infrastructure. They help create stronger businesses, encourage innovation and develop local talent.
In today’s environment, with skills shortages, global uncertainty and increasing competition for resources, building resilient local supply chains feels more important than ever. A lack of skilled people and local capability can have a real impact on programme cost, of course, but also on long-term operational performance. Ensuring that major investment programmes have practical and reliable long-term benefits that last beyond their completion date is critical. Project leaders hold the keys to building stronger local supply chains, developing skills and leaving behind a positive legacy that will serve in the longer term. However, perhaps because project leaders face pressure to hit deadlines and tick off key performance indicators, teams can often focus on delivering the asset and then move on.
The big opportunity for meaningful industry impact is to use these investments as a catalyst for developing the people, skills and enterprises that will support, maintain and improve those assets for decades to come. That takes leadership, long-term strategic thinking and a willingness to look beyond immediate project milestones.
Helping SMEs access major frameworks
When tier 1 and tier 2 frameworks are made easier for smaller businesses to access, this leads to local businesses and their communities realising tangible benefits. Regionally, in terms of job creation, innovation and investment, and nationally, in terms of improved productivity and greater supply chain resilience.
Yet many SMEs have traditionally struggled to access major infrastructure and built environment frameworks. Complex procurement processes, high compliance demands, minimum size and turnover thresholds, limited visibility of opportunities, and supply chains dominated by national and international contractors can all play a part in causing this access issue. The root of the issue lies between two groups who want to work together but don’t know how. SMEs can be unsure how to engage, and delivery partners are often stretched, cautious and lack the time to build new relationships. Inflexible procurement processes can also prevent delivery partners from seizing local opportunities and tapping into the niche expertise that can be found in smaller specialist businesses.
NEC4 and Clause 10
NEC4 is the fourth edition of the New Engineering Contract suite, which is designed to encourage good project management, prevent costly disputes and ensure collaborative, sustainable performance in construction and engineering projects.
Clause 10 sets the procedural and behavioural expectations for everyone involved in a project, including the spirit of mutual trust and cooperation, and is the philosophical heart of NEC4. Use of NEC contracts is growing around the world, including in Australia, Hong Kong and the Netherlands, where NEC is being used to deliver the new Pallas reactor and associated buildings at Petten in north Holland, a state-of-the-art plant for the research and production of medical isotopes. In the UK, NEC contracts are in use on the Hinkley and Sizewell projects, and for the decommissioning programme at Sellafield. NEC4 Clause 10 serves as a guiding star in many ways for a business, but like most principles, it is open to interpretation and takes effort and work from all parties on a project to embed it in a genuinely tangible and meaningful way.
Using Sellafield as one example, its 20-year programme and project partners (PPP) framework has an ambition to deliver long-term value for the North West of England. However, many capable SMEs still felt the programme was too big, too complex and simply out of reach. This led Solomons to create the Matchmaker scheme, founded on the same principles of NEC4 Clause 10 but as part of the contract strategy, rather than being introduced post contract. For trust to be built to last, it must be embedded within the contract strategy and all stakeholders from the outset, then nurtured through the life of the contract. With support from Sellafield, it served to highlight the collective strength of SMEs, and connect investment with local businesses, skills and regional growth.
For Sellafield’s PPP framework, NEC experience and proven behavioural training were used to bring SMEs and key delivery partners closer together. It helped create a shared space where people could speak openly and each side could articulate their needs and expectations to ensure momentum never slowed.
The Matchmaker framework includes a capability assessment that sets out the scale and specialisms of the SMEs, their future capability potential, and willingness to invest in regional growth and skills enhancements. These fed directly into the framework intentions and led to direct introductions and support in formalising commitments. By giving SMEs the clarity they need and delivery partners a practical way to discover new talent and strategic benefits to their own delivery portfolio, Matchmaker builds trust quickly in a very human-led, meaningful way.
Now reaching a five-year milestone, the model has been an integral part of the way the PPP partnership has established its long-term supply chain. This work has seen Matchmaker engage more than 100 SMEs, facilitate 40 joint heads of terms, and support 16 framework awards worth an estimated £19m ($25m) for Sellafield’s flagship nuclear decommissioning programme.
Traveling in the right direction but not there yet
Although the benefits of collaborative, mutual trust-based working are clear, most professionals appear to agree that nuclear is not there yet as an industry. The tendency of much of the construction and engineering sector to use a traditional, adversarial approach to contracting is underscored in the NEC’s Global Study of Construction Supply Chain Relationships report. This surveyed more than 1,000 architects, civil engineers, consultants, contractors, public and private sector clients, subcontractors and surveyors across Australia, Hong Kong, Peru, Singapore and the UK. The research identifies the same pervasive barrier in nearly all markets – that not enough clients are stipulating the collaborative approach that will help bring change.
NEC reveals that traditional frameworks still dominate and a large part of the industry “continues to experience the adversarial relationships, formal disputes and commercial damage that collaborative contracting is specifically designed to prevent”.
Respondents estimated that 58% of projects they have worked on in the past three years were delivered on schedule and to budget. This means that more than four in ten projects, by the industry’s own assessment, are falling short on at least one of the two main measures of success. An even bigger concern is that only 14% of respondents estimate that a quarter or fewer of their recent projects met both criteria. It is also troubling, while not a surprise, that more than six in ten respondents (61%) agreed that built environment projects create supply chains that are inherently adversarial in nature, while only 11% disagreed.
Yet most respondents understand that the adversarial approach is not helpful, with 69% saying that supply chain relationships directly affect their productivity on projects. The success of these relationships affects operational costs for 40% of respondents; key project outcome measures such as timescales, costs and asset quality for 39%; and the financial strength of businesses for 38%.
While the above data paints a grey picture of the current situation, the future is potentially much brighter, with most industry professionals recognising the value of collaborative contracting.
More than four-in-five respondents (81%) agreed that higher levels of collaboration help issues to be resolved more quickly. A similar proportion (83%) agreed that trust between parties is critical to achieving successful project outcomes. Eight in ten (80%) agreed that collaboration positively influences multiple areas of project performance.
As Rekha Thawrani, global director, NEC Contracts, has said: “Trust in construction isn’t a soft concept – it has a hard commercial value. When trust is high, supply chain partners share information earlier, innovate more freely and absorb risk more willingly. When it is low, every interaction becomes transactional and defensive.”
Strong, mutually respectful supply chain relationships are the key to any successful project, for opening the door to SME growth and workforce investment, and for creating a powerful legacy for local economies around the world. Unlocking regional SME capability is also essential for regions to deliver their long‑term infrastructure ambitions by providing a clearer and more human way to access the opportunities on their doorstep. Collaborative contracting, fully embracing the NEC4 Clause 10 principles and initiatives like Matchmaker are now starting to show what is truly possible when procurement builds relationships, understanding and certainty.
