BAA launches procurement strategy for next 10 years

BAA, the airport operator, this week launched its procurement strategy for the next 10 years, when it will invest a total of £9.5bn.

The company, under the Spanish contractor Ferrovial, its new owner, said that Official Journal of the European Union notices would be issued from next week for the next generation of framework partners to help deliver major projects, including Heathrow East and Stansted Generation 2.

BAA has split its future work into four areas – complex, commodity, technical and critical business systems, and consultants – which is a break with tradition.

Complex projects will involve 10-year framework agreements on projects including Stansted Generation 2 and Heathrow East, which will combine the capacities of terminals 1 and 2 in a single facility. BAA will appoint first-tier and second-tier suppliers and design consultants. The airport operator will own and manage the risk, and there will be a greater emphasis on design for manufacture. A key element of complex projects will be fewer suppliers and reduced levels of direct interfaces with BAA.

On commodity projects, such as car parks and minor refurbishments, BAA will appoint a shortlist of suppliers to a framework of three to five years, and those suppliers will carry the risk.

BAA will appoint a shortlist of suppliers for up to 10 years for both technical and critical business systems and consultant work.

BAA insisted that it was still committed to its partnering approach but said that “greater commercial tension” was part of the driving force behind change.

The new agreements
reinforce BAA’s
commitment to long-
term relationships
with its suppliers

Mike Temple, BAA

BAA describes itself as “the construction industry’s biggest client”, and with such a huge investment plan and reputation as a forward-thinking client after the success of Heathrow’s £4.3bn Terminal 5, companies will be vying to be named as a framework partner.

The Olympic Delivery Authority said part of the reason why it had selected CLM as delivery partner was because of the success at T5 of consortium members Laing O’Rourke and Mace.

Mike Temple, head of capital projects at BAA, said the new framework arrangements had been introduced because some of the present frameworks had come to an end or would do soon, including T5.

“The new agreements reinforce BAA’s commitment to long-term relationships with its suppliers and also recognise the need for greater commercial tension,” he said.

He denied that it was linked with Ferrovial’s takeover, and said that the scale of investment planned before Ferrovial’s approach would go ahead.

He said: “We have an opportunity to pick and mix the best of what we have learned from T5 and our other projects over the past four to five years, as we look at a new tranche of major project work.”

With much of the industry’s attention focused on delivering the London 2012 Olympic Games, Temple admitted that capacity would be an issue: “It will be an issue for us and we can’t say we are not concerned, but people do want to work for BAA.”