Presentation given by Ken Owen to the SWWE branch on 26 September 2018 in Bristol

1. 1
Hinkley Point C - Industrial Collaboration
UK PROTECT COMMERCIAL
Hinkley
Point C

2. 30 Years of Experience

3. Core Values
1. Integrity
2. Customer Satisfaction
3. Employee Engagement
4. Innovation
5. Sustainability
Automotive

4. BAA Terminal 5 Wembley Stadium
London 2012 Metronet Tubelines
10 Years pre HPC

5. 5
Olympic Park, Assets
8 Olympic Park Sporting Venues
1 Broadcast / Media Centre (93,000 sq m) & Multi
Storey Car Park
26 bridges and 7 underpasses
12km of roads
2 million m3 of earthworks
Energy Centre
13km of tunnels
New utilities infrastructure and
32kv & 11kv utility diversions
79 hectares of Landscape
& Public Realm
21 PSAs and VSAs

7. Making NEC3 Work
Key Ingredients of Success
• Early Warning
• Change Management (Compensation Event
Notices)
• Accepted Programme
Key Enablers
• People
• Training
• Clear & Simple Processes
• Organisational Model

8. Some of the Dynamics
Volume of Change and Risk
13,501 EWNs
6,362 CENs
24,723 CI/CEs
750 Tier 2 Accounts
90 Assurance Reviews
120 Contracts
96 Tier 1’s 1
17,648 RFIs
14,321 EWNs
7,394 CENs
26,665 CI/CE’s
850 Tier 2 Accounts
123 Assurance Reviews
( Data correct as of 23rd March 2012)

9. NEC and Commercial Close Out
Well defined close out process
embedded
• ODA/CLM > Tier 1 > Tier 2
• Rigorous 3rd Party Assurance
adopted
• Commenced early 2010
The contract (NEC 3) has ‘enabled’
risk reduction and facilitated early
close out
Clients ‘Risk Profile’ has
dramatically reduced
69% complete by value
17 weeks before Games
(NEC Olympic Park Contracts)

10. Olympic Park
Delivery Strategy & Organisational Framework
1. NEC3 Contract Management:
Real Time
2. Supplier Management
• Tier 2 value for money
• Incentivisation
• Final account strategy
• Insolvency risk
3. Integration management
4. Contingency and risk management
5. Performance and control
(cost, time)
Contract
Management
Framework
Delivery
Management
FrameworkOlympicIntegratedView
Traditional
View
Risk
Management
Framework
Performance
Management
Framework
(Project Controls)

11. Delivering Major Programmes
(25 yrs Reflection)
Business Driver
Observations and Key
Learnings
Power station outages at
Nuclear Electric
Automotive Vehicle Systems
at Johnson Controls
Airport Infrastructure at
BAA
Underground Upgrade at
Metronet
London 2012 Olympics
(CLM Delivery Partner)
Lost Revenue
Time to Market
Capital Efficiency
27th July 2012 &
Affordability
Scope, Organisation,
Supply Chain
Process Discipline,
Operational Readiness
vs.
Supply Chain
Relationships
Commercial
Rigour
Integration
Management & NEC3
Private Investment
Scope, Change Control,
Common Alignment

12. NOT PROTECTIVELY MARKED12

13. Government Policy: Two National Concerns
0
10
20
30
40
50
60
70
80
90
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
2025/26
2026/27
2027/28
2028/29
2029/30
GW
Existing and under construction generation
and contracted plant in Great Britain
2013-2030
Peak
Peak
Demand
80%
C02REDUCTION
BY 2050
Climate Change Act,
2008

14. Title of Presentation, Existing Nuclear NOT PROTECTIVELY MARKED/ RESTRICTED/CONFIDENTIAL (delete as
appropriate) BEG/FORM/COMM/026A
14

15. MEH Strategy ©April 2018 EDF Energy plc. All rights
Reserved.
1
5
Nuclear Fission

16. Nuclear Reactor (Simplified)
Primary Circuit (pressurised water)
Secondary Circuit (feed water)
Secondary Circuit (steam)
Cooling Water Circuit
Steam
Generator
Main Feed
Pump
Reactor
Coolant
Pump
Reactor Vessel
Pressuriser
Condensers
Cooling
Water
Pump
Generator
Turbine

17. Human & Industrial Adventure

18. 18

19. 1
9
Hinkley Point C
more than a Power
Station!!

20. HPC Emerging Complex Supply Chain
International, National & Local partners working
together to deliver Hinkley Point C

21. 6Consortia
+£465m
Contract Value
+660 Jobs
Doing Business Differently
Local Supply Chain

22. 22
Priorities – next 12 Months

23. 23
Importance of Real Time Contract Management:
General Communications
Contract Communications 122,841
Formal Response Required 46,361
CE’s / Variations / Claims
Raised
6,267
Early Warnings Raised 12,054
Technical Queries Raised 4,036
Accepted Programmes 81 - Aligned to all key
contracts
1,933
2,283
2,321
1,942
2,166
2,722
2,385
2,451
1,468
2,307
2,897
3,792
55%
59%
71%
64% 65%
67%
59%
64%
68%
72% 73%
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Oct-
17
Nov-
17
Dec-
17
Jan-
18
Feb-
18
Mar-
18
Apr-
18
May-
18
Jun-
18
Jul-18 Aug-
18
Sep-
18
Communications Dealt with On Time
Volume of Communications
% Dealt with On Time
Contract Management (Key CEMAR Metrics)

24. 24
Real Time Effective Contract Management: Overall Architecture
Accepted Programme
Contract
Deliverables
Risk
Management
Variations Payments
Target
Achievements
Contract AdministrationProcurement
Tendering
Selection
and
Award
Handover
and
Initiation
Contract
Manage-
ment
Contract
Close-Out
C o n t r a c t L i f e c y c l e
Challenge 1: No E2E Commercial Approach
Challenge 2: Money and ‘Claims’

25. 25
The Contract Structure
Contract
Mechanisms
Key
Commercial
Terms +
Conditions
Constraints for
obligations
specific to EDF
nuclear site
license
Supporting
appendices
(works
information)
• Obligations of the parties
•Approach to risk management
•Issue resolution
•Price of the works (inc adjustments)
•Payments
•Protection of EDF commercial position
•Liability constraints
•Defect + handover management
•Key dates
•IP
•Unique requirement applicable to
•Technical requirements
•Performance specification
•Detail Project/contract workings + processes
•Constraints
•Project Requirements
Output
Definition of the
works to
Be performed +
Project
And site
requirements
Mechanisms for
Compensation
a) For the works
b) Variations
c) Default
Compliance with
ONR requirements
Expectations of
How the parties will
Deliver/manage the
works
behaviour
Corporate
B2BChallenge 3: Understanding of what a ‘Contract’ Actually is?

26. September 2016 © NNB Generation(HPC)Ltd - Not Protectively Marked26
Risk Management (Supplier Engagement)
Transactional
• well defined brief
•Design + build
•Simple asset-functionality of asset
performance does not greatly impact the client business
• Controllable site constraints
•Known risks – management solutions involve single party
•Minimal likelihood of change
•Single supplier environment and manageable interfaces
Collaborative
• Complex asset – clients future business
heavily dependent on asset performance
•Complex interfaces (both design + delivery)
•Unknown/unquantifiable risks
Management solutions involve many parties
• Integrated supply chain – multi hand over
hand back arrangements
•Employers design (first of kind)
•Complex supply chain – factory to site
•Multi site constraints – logistics
•IR has potential to ‘impact’ productivity
The contract establishes the architecture + behaviour of the parties

27. Restructured NEC/ FIDIC Contract Templates
WI
100
Core
Conditions
Guidance for
compiler.
Minimum WI
needs
identified
Core
Conditions
Appendices
(Employer’s
Requirements)
Guidance for
compiler.
Minimum
information
needs identified
WI
200
W I
etc.
App 1
App 2
App etc
FIDICNEC
Owner 1
Owner 2
Owner etc.
WI
following
NEC
Guidance
Note (Jan
2012)
WI 100
WI 2000
Appendices and
Employer
requirements
App 1
App 37
T’s & C’s
DMIC
T’s & C’s
DMS
T’s & C’s
Call Off
(DMIC, DM
“Clean”
T’s & C’s
Z Clauses
applicable to
all Contracts
Z Clauses
applicable to
each NEC
main Option
Z Clauses
project /
special
Document “spine”
EDF Standard
documentation
27
Z Clauses
selection
Works
Information
Guidance for
compiler.
Minimum WI
needs
identified
WI
100
WI
following
NEC
Guidance
Note (Jan
2012)
WI 100
WI 2000
Appendices and
Employer
requirements
App 1
App 16
Z Clauses
applicable
to each NEC
main
Option
Z Clauses
project /
special
Challenge 4: Different applications required different approaches!

28. 28
Priorities – next 12 Months

29. NOT PROTECTIVELY MARKED2929
Supply Chain Engagement
• Poor quality: plant & delivery
• Lack of supplier alignment with the overall Project’s schedule + critical path
• Late handover (missed key dates)
• Cost increase
• Claims beyond scope additions + the employer’s unavoidable risks
• Safety incident
What risks are we trying to mitigate?

30. • Ultimate Risk ‘always’ resides with the client.
• Appropriate level of design completeness is
fundamental.
• Risk transfer is a myth.
• ‘Procurement’ represents the start of the Journey
…it does not guarantee the outcome!!
• Not a ‘one size fits all’.
• The ‘contract’ is the key link between client &
supply chain.
30
HPC Supply Chain & Contract Strategy
“The six Golden Rules”

31. 31
1. In the first Instance the Contract should drive performance, and NOT be
used to protect EDF Energy in the event of Default
Doing Business Differently – The Contract & Supply Chain!
2. Management of the Contract should ALWAYS ensure the commercial interest of the parties
remain aligned, in order to avoid adverse impact on delivery

32. Contract Administration
Manual (‘Blue Book’)
Equipment Contract
Administration Manual (‘Red
Book’)
Manufacturing and Delivery
Management Manual
(‘Green Book’)
Contract Management Manuals:

33. Rigorous Contract Management
Balancing “Commercial Tension” & “Collaboration”

34. Launch of NEC Contract Management approach – ‘The HPC Way’
• Create a common Purpose and understand of
how the contract will be administered and the
key behavioural requirements.
• Inspire a level of collaboration and
togetherness not experienced before on a
project of this scale
• Invitees: 320 staff involved in HPC in the
management of the Key NEC contracts
• x17 Exhibition stands created to articulate key
learning and aspects of NEC and HPC :
• Accepted Programme
• Early Warnings
• Deliverables
• Subcontracting
• Compensation Events
• Equipment Supply
• CEMAR
• Project Controls
• Nuclear Site Licence & Intelligent Customer
• Collaborative Framework & Behaviours
• Apprenticeships & Assessment Centres

35. Key Enablers –
Technical & Procedural, plus Behavioural & Talent development
Contract Administration –
#17 Exhibition Stands

36. Launch of NEC Contract Management approach – ‘The HPC Way’

37. Launch of NEC Contract Management approach – ‘The HPC Way’

38. Launch of NEC Contract Management approach – ‘The HPC Way’

39. September 2016 © NNB Generation(HPC)Ltd - Not Protectively Marked39

40. Contract
Administration
Manual (‘Blue
Book’)
Equipment
Contract
Administration
Manual (‘Red
Book’)
Manufacturing and
Delivery
Management
Manual (‘Green
Book’)
Supply Chain Alignment: Ensure consistent and Common
understanding of Requirements
NEC Launch – 29 Nov 2017 (Bristol)
FIDIC/Equipment launch – Planned 22 Nov 2018
(Paris)

41. INTRODUCTION
3words to describe
the HPC event in Paris
3words to describe
the HPC event in Bristol
The world of Manufacturing The world of Construction
97% Material & Workshops Beneficial
98% Felt Inspired
100% Event good use of their Time
95% Material & Workshops Beneficial
98% Felt Inspired
95% Event good use of their Time

42. Title | BUSINESS UNITS (SNI) | PROTECT – LEGALLY PRIVILEGED | PROTECT – PROPRIETARY | PROTECT – COMMERCIAL & CONTRACTS | PROTECT –
PRIVATE | NOT PROTECTIVELY MARKED | ©1 Jan 2017 EDF Energy plc. All rights Reserved.
42

43. 43
“Commercial Tension” & “Collaboration”
Rigorous Contract Management
‘…Change Control…’
Collaborative Working is all about….
RELATIONSHIPS
Relationships are all about ….
BEHAVIOURS
Critical Behavior in any Relationship Is…
TRUST
……Fairness…..

44. COLLABORATIVE
WORKING IS ABOUT
RELATIONSHIPS
ARE ALL ABOUT
THE CRITICAL
BEHAVIOUR IN ANY
RELATIONSHIP IS
RELATIONSHIPS BEHAVIOURS TRUST

45. MEH Erection Challenge!
45
BoQ’s & Equipment List (illustrative only)
380km of pipework, 20,000 valves, 200 pumps, 42 heat exchanges, 86 Filters, 120 Tanks, 6,325km of main power and I & C Cables , 404km
of Cable Containment, 51,700 Supports, 218 LV Switchboards, 136 Transformers, 43 HV Switchboards, 3,000km of small power Cables ,
47,000 Lighting units

46. MEH Alliance is Unique in ‘UK Industry’
46
(BoP, HVAC* Mech) (BNI Mech) (Electrical) (Services)
‘Joint & Several ‘for Deliver of Site Erection works; Unified by a Single Commercial Model
‘.. A £2bn Alliance within an overall Integrated £19bn
‘Mega Project’….’

47. Q. What do you See?
A. Different Way at
Looking at YOUR Career?

48. Mastering Your Career: 4 + 1 traits
1. Technical
your chosen field
2. Behavioural skills
influence, team work, co-operation
3. Business acumen
judgement, trade-offs etc
4. Ambiguity
coping with uncertainty
+1 Passion and Enthusiasm – no matter what!

49. 49
“Commercial Tension” & “Collaboration”
Rigorous Contract Management
Collaborative Working is all about….
RELATIONSHIPS
Relationships are all about ….
BEHAVIOURS
Critical Behavior in any Relationship Is…
TRUST
……Fairness…..