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Agenda. Welcome Safety Moment KBR Speechly Bircham CERN LHC – Keith Jones Drinks & Nibbles – Hogshead, Leatherhead. CERN - LHC Project Large Hadron Collider. The world’s biggest. ... fastest. ... coldest. ... most expensive. CERN. European Organisation for Nuclear Research.
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Agenda • Welcome • Safety Moment • KBR • Speechly Bircham • CERN LHC – Keith Jones • Drinks & Nibbles – Hogshead, Leatherhead
CERN - LHC Project Large Hadron Collider The world’s biggest ... fastest ... coldest ... most expensive
CERN European Organisation for Nuclear Research • Founded 1953 • 20 member states • High Energy Physics Research • 3000 permanent staff • 6500 users
LEP/LHC SPS PS The Ever-Increasing Circles
What’s CERN ever done for us? Customs scanning of vehicles X-ray etching computer chips Laser scalpels Radiotherapy World Wide Web Electron beam sterilisation Carbon dating Hardening of metals Positron-electrontomography X-ray lithography Destruction of nuclear waste X-ray imaging Astronomical analysis Mass Spectroscopy Spinoffs from Accelerator Technologies
LHC - the Large Hadron Collider • Reuses existing tunnels • Major new infrastructure • Helium cooled - 1.9K • Absolute vacuum • Proton collision 14TeV • Pb nucleus 1150TeV • 12500t detectors
LHC figures • LHC Project • 7000 man-years • 7 ½ calendar years • LHC Capital value £ 1100M • Civil Works • 6+ calendar years • Capital Value £ 146M (€238M - 1998) • 4 Packages • Package 1 - Meyrin • Package 2 - Cessy • Package 3a - Dispersed • Package 3b - Prevessin
LHC Civil Engineering • International Joint Ventures • >6kmtunnels • 14 caverns • 7shafts • 25000m3 buildings • >6 calendar years
Package 3a / 3b Package 3a • 3.2km tunnel, 3mØ • 11 chambers • 11 buildings • Spoil disposal • Contract Value €55M • TW-A-SB • BRI Package 3b • 2.5km tunnel, 3mØ • 4 chambers • Contract Value €14M • ATIC • BRI
Package 3a • Dispersed • 8 locations • Interfaces • Experiments, dismantling, installation • >50 contract dates • Change • Scope • Design • Programme
Construction “Tunnelling for dummies”
Contract …making it happen without ending up in court…
Factors in Success or Failure • Scope & Programme • People • Contract • Form • Valuation • Target Cost • Change
Scope 50m
People national pride personal ego language corporate culture past practice trust/ mistrust blame prejudice - stereotypes **new ideas**
The Contract • Modified FIDIC “Red Book” • Employer control reinforced • Variations agreed before work • Rigid • Adversarial • No incentives to perform • Heading for trouble
Supplemental Agreement • Side-agreement • Project focus • Collaboration • Seek function, not form • Target Cost - Incentive • Tendered Rates retained - transparent
Cost/ Value + + + % = Cost • Actual cost of resources Value • Payment on resources expended • Tendered BoQ re-expressed - P/ L/ M/ OSOHP
Safeguards • Employer • Open-book - audit • Contractor • Tendered Overhead/ Profit preserved • Financial Incentive • Gainshare - 70:30
70:30 - Pain/ Gain Additional Income +ve = Gain 0 Contractor’s contribution capped Target + buffer Target -ve = Pain Outcome Cost
Target Cost - Illustration Tenders 100 manhours Expends 110 m/h Expends 90 m/h (Underspend) (Overspend) Expends 100m/h (On-Target) • Paid 90 m/h +O/H = 99 • Reward 30% of 10 = 3 • Recovers 102, spends 90 • Outcome +12 • RoCE +13.3% • Paid 110 m/h +O/H = 121 • Fine 30% of 10 = 3 • Recovers 118, spends 110 • Outcome +8 • RoCE 7.3% • Paid 100 m/h +O/H = 110 • No fine, no bonus • Recovers 110, spends 100 • Outcome +10 • RoCE +10% Assumes O/H 10%
Target Cost Operation - Changes • Baseline (June 1999) • Cost + % = Value • Variation - external • Modifies Target Value and Costs • Employer bears impact • Value Engineering/ Economy - internal • Target Value unchanged • Savings shared
Variation • Prior to Supplemental Agreement - VO • Delete secondary lining .
Value Engineering • Relocate radiation shielding • Savings €0.75M
Costs/ Savings Target Works • Base Costs • Original Value 79.1 MCHF €54M • Final Estimated Value 87.9 MCHF €60M • Escalation 11.1% • Current underspend 10.4MCHF €7M • Current underspend 11.8% • Including fluctuations • Final Estimated Value 97.1MCHF €66M • Current underspend 10.7%
Has it worked? • Project focus • Debate, less disputes • Behaviour changes • Financial incentive to behave • Performance • Structures delivered on time • 34% escalation within first year • 11% escalation since 1999 • 12% underspend available for gainshare
The end... … or is it?