Context - The Socioeconomic issues for Sellafield Ltd

2. Context - The Socioeconomic issues for Sellafield Ltd Sellafield Ltd spends c £1bn p.a. in the supply chain from a total of £1.8bn and is required to maximise community benefit returns from both SL and suppliers, based on proximity principle Other major public procurements build socio economics in from the start – Sellafield is strengthening its processes to encourage suppliers to make stronger socio economic commitments Through strategy development socio economic priorities/expectations can be prioritised – focussed on both business needs and community impact Sellafield Ltd can impact social outcomes - collaboration with suppliers and local community can significantly improve delivery v agreed business and social outcomes Traditional concept of socio economics is changing – increased emphasis on local skills, jobs, businesses and the creation of growth 08 November 2014 2

3. Alignment of Socio Economic Strategies Employment, Education & Training SME & Local Business Growth Community Well-Being Local Enterprise Partnership NMP Enrich Strategy NDA Objectives SOCIALVALUE West Cumbria Economic Blueprint Community Plans Key To Britain’s Energy Future CoNE Strategic Themes Socio Economic Objectives & Outcomes Procurement & Contract Management (Suppliers) Delivered Community Benefits (Managed) 08 November 2014 3

4. Priority Business Areas – Socio Economics Closing the long term skills gap (Sellafield and suppliers) Vibrant local supply chain supporting Sellafield and suppliers Managing impact of Sellafield growth on supporting infrastructure

5. Sellafield Socio Economic Objectives Support a Reduction in local youth and long-term unemployment Improve local pathways to employment through long-term development of education, skills and training matched to SL long-term business needs Increase the proportion of SME work to stimulate growth in long-term skills and services Encourage the local supply chain to support resolution of technological challenges through innovation Support improvements to transport infrastructure and reduce reliance on road transport Reduce the number of people working directly on the Sellafield Site through the development of suitable alternatives Provide skilled resources and direct funding to support community investment

6. Embedding Strategy into Supply Chain (Responsible Procurement) Statutory Obligations & Policy M&O Obligations SL Strategy & Priorities Golden Thread PCR Compliance Acquisition Strategy Market Engagement (Messaging) Tender Evaluation Criteria PQQ (Restricted) ITT Contract Terms & Conditions (Enforced Performance Deliverables) 08 November 2014 6

7. Alignment of Procurement and Contract Management Acquisition Strategy (include socio economic approach/opportunities) Tender Notification (highlight socioeconomics as an important element) Industry Day/Communications (reinforce importance in presentations) Selection (evaluate credentials, policies and approach) Award (encourage specific socio economic commitments) Works Information (highlight metrics, measures and targets, incorporate commitments as KPIs linked to fee) Contract Management (manage supplier performance, collect data and communicate)

8. Key Principles Socio economics – relevant and proportionate to the contract (typically 5-12%) Consider local/regional/national opportunities (linked to SE objectives) Structure PQQ and ITT questions to meet business and socio economic requirements of the contract – Golden Thread PQQ/ITT/Works Information aligned to Sellafield socio economic strategy Specific bidder commitments encouraged and evaluated Socio Economic KPIs linked to Fee where appropriate

9. PQQ & ITT Questions To Incorporate Sustainable local employment Skill shortages and deployment of local skills Education intervention to promote employment awareness SME and local business development (client and external) Technology development and work with suppliers, academia etc Optimisation of logistics routes, goods, people and stock Carbon footprint reduction referencing staff location and travel Socio economic planning and support to community initiatives Questions adapted to the requirements of the specific contract

10. Draft Business Socio Economic Metrics

11. Socio Economic Metrics - Descriptions

12. Sellafield Ltd Socio Economic Update June 2014 Sellafield Ltd Draft Socio Economic Strategy external engagement has commenced Monthly Sellafield Ltd socio economic progress reports established (new procurements and in flight contracts DSA, ISA, MDSW, OneFM) Responsible Procurement Plan (flow down of Socio economic expectations) starting to yield positive results from suppliers – Major Projects NDA has updated Public Accounts Committee (PAC) on Sellafield progress Draft PQQ/ITT/Works Information guidance produced to support procurement and contract management processes Plan to flow socio economic metrics into existing contracts – Baseline then set challenging targets on SL and suppliers

13. Skills/Employment - Improving Pathways – SL and Suppliers New Opportunities Demand Education Skills Employment Sellafield Programmes Education Engagement Programme Apprenticeship Graduates NVQ Short Courses Outreach Sustainable Employment Re-Training Work Ready Job Ready Long-Term Recruitment Planning Sellafield supported by supply chain Supply

14. Summary Always think Socio Economics – good business = good socio economics and vice versa Encouraging Tier 2 bidders to make socio economic commitments NOT selecting Tier 2 on geography but encouraging flow down of socio economic agenda to other supply chain levels Most/all contracts will have a socio economic angle – questions are NOT standard but will be aligned to the requirements of the contract Very important to flow supplier commitments through as contract deliverables linked to KPIs and fee