1. TEAM 200 TEAM 200 ALLIANCE - T2A ROLL OUT MEETING 25th MARCH 2002 Main Hall University of East London

2. TEAM 200 TEAM 200 ALLIANCE - T2A Agenda for the Afternoon Why do we need to changeGarry Field What are our future objectivesTerry McDonald What are we changing in the ContractTerry McDonald How will working practices changeBob Ibell What challenges do we faceIeuan Morgan Where are we now re Schedule & BudgetIeuan Morgan QuestionsAll TEAM 200

3. TEAM 200 ALLIANCE - T2A ‘Informal’ Area 200 Alliance operating since Contract Award Shared Office Complex at Channelsea House Shared Precast Factory for C220 and C240 Single order SGI Segments across all tunneling contracts Single Security System for Stratford Based Contracts Single spoil treatment facility for Stratford Based Contracts So why do we need to change? TEAM 200

4. TEAM 200 ALLIANCE - T2A Since Contract Award we have encountered a number of problems Late release of design has seriously delayed Stratford Box This has seriously delayed the launch dates for C220 & C240 Signalling problems have seriously delayed West Rail Bridge Railtrack / CRG issues delayed commencement of Graham Rd The informal Alliance is not able to manage these issues TEAM 200

5. TEAM 200 ALLIANCE - T2A We identified the need for RLE and all Contractors to work collaboratively as a single team work flexibly across Contract boundaries develop solutions that are best for the project not the contract set aside ‘Contract’ issues and focus on the work develop an incentive scheme that would promote the above TEAM 200

6. OBJECTIVES Originally Each Contractor:BUILD MY BOX AND PROTECT MYSELF Why:The Contract, Pain / Gain What should it be: Series 200 - Build our part of the Railway in TIME, in B UDGET, to the RIGHT quality TEAM 200 ALLIANCE - T2A

7. TEAM 200 THE PROBLEMS Intense narrow focus on pain avoidance –Individual Targets –Pain / Gain Share –Compensation Events TEAM 200 ALLIANCE - T2A

8. TEAM 200 IMPACT: Exploit problems / Changes Excuses for non performance Cause of friction No incentive to co-operate with others Budgets are blown - BUT NOBODY WINS Programmes no longer useful tools Project is late TEAM 200 ALLIANCE - T2A

9. TEAM 200 SOLUTION: Remove Pain share from contract No Compensation Events! RESULT: Allows focus on delivering project TEAM 200 ALLIANCE - T2A

10. TEAM 200 HOW WILL THIS WORK? THERE IS ONLY ONE BUDGET –Contractors Tender Prices –Client Contingency for: Design Development Settlement Issues Undefined Scope –RLE Field Engineering TEAM 200 ALLIANCE - T2A

11. TEAM 200 HOW WILL THIS WORK? Therefore the Budgets have been COMBINED (THE “POT”) Total budget 220, 230, 240, 250, Field Engineering IT CANNOT BE INCREASED (there is no other money!) Any surplus is shared between the 5 of us If the POT is exceeded, then as now for individual targets, no FEE and ALL CONTRACTS SUFFER EQUALLY TEAM 200 ALLIANCE - T2A

12. TEAM 200 HOW WILL THIS WORK? RESULT WE ALL HAVE TO CARE ABOUT AND MANAGE: –The Interfaces –The Budget –The Problems BUDGET  TEAM 200 ALLIANCE - T2A

13. TEAM 200 HOW DOES THIS DELIVER THE PROJECT? PROGRAMME Any surplus from the POT is only paid if Team 200 MILESTONE DATES are delivered 8 MILESTONE defined to remove Project Risk and, importantly, provide access for SYSTEMWIDE A REAL INTEGRATED PROGRAMME PROGRAMME  TEAM 200 ALLIANCE - T2A

14. TEAM 200 SYSTEM WIDE The reason we are building the BIG BOX Systemwide Scope Transfer to Civils where possible –Increase the POT –Remove TAIL END PROGRAMME RISK from the Project RESULT: PROJECT BUDGET   PROJECT PROGRAMME   TEAM 200 ALLIANCE - T2A

15. TEAM 200 OBJECTIVES BEFORE: BUILD MY BOX & PROJECT MYSELF NOW: BUILD OUR PART OF THE RAILWAY NO EXCUSES…….. TEAM 200 ALLIANCE - T2A

16. TEAM 200 HOW IS THIS DEALT WITH? SUPPLEMENTAL AGREEMENT –Addendum to Main Contract  Disapplies Compensation Events (incl. Retrospectively)  Defines the POT & has mechanisms for measuring any surplus  Defines MILESTONES & how payment of any surplus relates to achievement of milestones. TEAM 200 ALLIANCE - T2A

17. TEAM 200 T2A has: One budget One programme One team TEAM 200 ALLIANCE - T2A

18. TEAM 200 One Budget. Manage Costs Reduce Waste Improve Efficiency TEAM 200 ALLIANCE - T2A

19. TEAM 200 Manage Costs Manage Costs not Margin Control Expenditure TEAM 200 ALLIANCE - T2A

20. TEAM 200 Improve Efficiency Communications Decision Making Resist Changes TEAM 200 ALLIANCE - T2A

21. TEAM 200 We have to Perform (nowhere to hide) TEAM 200 ALLIANCE - T2A

22. TEAM 200 Responsible for delivery of: –Health & Safety –Quality –Environment Management TEAM 200 ALLIANCE - T2A

23. TEAM 200 Organisational Changes TEAM 200 ALLIANCE - T2A

24. TEAM 200 Alliance Management Board G. Field K. McManus J. Horner I. Morgan T. McDonald D. Court R. Ibell

25. TEAM 200 TEAM 200 ALLIANCE - T2A Organisational Concept T2A Design Dept Property Owners Utilities Railtrack (CRG) LUL

26. TEAM 200 I Galloway ALLIANCE STEERING GROUP ALLIANCE MANAGEMENT BOARD G. Field T. McDonald URN RLE Interfaces Cost Monitoring Programme Monitoring Budget Monitoring Environmental Management Project Control Interface Field Engineering D. CourtR. IbellI. MorganJ. HornerK. McManus

27. TEAM 200 Utilities / RTI / Settlement Manager T. McDonald C220 Production Management Contract Administrator C250 / Structures Earthworks Manager ALLIANCE BOARD J Horner D. Court C250 R. Ibell C240 Production Management Project Control Contract Administrator G. Field K McManus Health & Safety Quality Environment LUL / Tunnels / Shafts Manager Production Teams I. Morgan C230 Production Management Production Teams Contract Administrator Production Management Production Teams Contract Administrator T2A Functions Management

28. TEAM 200 TEAM 200 ALLIANCE - T2A Ieuan Morgan Current Contract in Terms of TIME and COST The supplemental agreement with regard to COST The supplemental agreement with regard to TIME

29. TEAM 200 The Previous Situation Contractors performance measured against Target Sum Target Sum is adjusted by Compensation Events Each Contract has Sectional Completion Dates These dates are adjusted by Compensation Events TEAM 200 ALLIANCE - T2A

30. TEAM 200 Drawbacks of the Previous Arrangement Concentration on Compensation Events Each Contractor focused on the particular contract dates No incentive to ‘Co-operate’ TEAM 200 ALLIANCE - T2A

31. TEAM 200

32. AREA 200 ALLIANCE

33. TEAM 200 Possible Future Savings TEAM 200 ALLIANCE - T2A

34. TEAM 200 AREA 200 ALLIANCE - Team T2A