Beth West interview: How to land HS2 phase 2 design work

Denise Chevin
25 April 2016

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Skills, Skills, Skills - Commercial director of HS2, Beth West, talks about the vital ingredients she'll be looking for when appointing design consultants for the phase 2 design work 

Life must be one long beauty parade for Beth West commercial director of HS2. With contracts and appointments coming through thick and fast there’s CVs to study, bids to read and presentations to sit through as the crème of the engineering and contracting world vie for a slice of the action to design and build the £50bn line. 

The project is expected to receive royal assent in parliament in December, and construction is due to start in 2017. But the team behind the project are going all out to ensure that it is full speed ahead once the whistle has blown and are pursuing the political and procurement processes in tandem. 

So it’s all go, and amongst the recent maelstrom of activity, HS2 Ltd confirmed a joint venture between Atkins, CH2M and SENER as its engineering delivery partner for phase one from London to Birmingham, including assisting HS2 with the procurement of the £11.8bn of civils packages. Meanwhile seven teams have been shortlisted for £900m enabling works on phase one. 

Most recently, HS2 has published details of engineering design work worth up to £520m for developing the detailed plans for phase two B, ahead of a formal decision on the route expected in the autumn. The first part of phase two, between the West Midlands and Crewe, will open in 2027, six years ahead of the rest of Phase Two. This will be subject to its own hybrid Bill, which the Government hopes to deposit in parliament in 2017.

This latest consultancy work up for grabs is for a development partner to lead phase 2B of the project through the hybrid bill process, worth around £170m, as well as three professional services contracts for consultants to design three of the main civils packages for the route north of Birmingham to Leeds and Manchester, worth around £350m.

The successful bidder who becomes the development partner will join HS2’s in-house team to manage the progress of phase two’s hybrid bill application through parliament, with royal assent expected for 2022. Applicants are expected to be shortlisted in the summer, with the successful bidders appointed once the route has been announced. Additional work covering stations and railway systems will follow next year.

We asked Beth West what exactly will land consultants a berth on the scheme.

Talk us through the different scopes of the consultancy contracts?

The engineering delivery partner is supporting mainly our design and construction activities, so working with us as we go through the tendering process for the main works, and for the other contracts as well. And looking at design assurance, and really supporting us and being an integrated part of our team whilst we go through the construction process. 

We’ve got this two stage design and build process for the civil engineering works, and the first stage of that is very design driven. So we really need support on what we’re getting out of that design process. And then our job is also very much to be the systems integrator for the railway, so they’ll help us with the assurance for that as well. 

The development partner and the professional services contracts for 2B are very much working with us to prepare the bill material. So it’s a much earlier stage of design first of all, because what goes into parliament is not a detailed as we need for construction, but it’s detailed enough that we understand the environmental impacts.

Just to go back to the engineering delivery team, why did the Atkins/CH2M/SENER consortium win?

Right across the board, they were able to come back and provide us with higher quality responses to all of our questions. 

Are fees charged part of the decision-making process?

Yes, of course. But I think the approach that we’ve taken has been to really focus more on technical ability. Cost follows quality in our experience, and so what we really look at is people who can actually deliver. Because often, it might be a slightly more expensive unit rate, but you need fewer units to get the job done, which ends up being more cost effective.

And because we’re able to do a lot of benchmarking across the entire project, we can always challenge costs if we see things are looking odd compared to other prices. 

For the delivery partner and the PSEs, it’s day rate based. We look to see where we might be able to do things on a work package, on an output basis, but especially for some of this early design work it is difficult to scope that out 

You say you were impressed with the quality of the bids, yet you’ve written about the need to be more innovative, the need to do more R&D, which seems to imply that people are not quite hitting the mark in terms of what they’re proposing?.

We are trying hard to foster an innovative culture but we don’t expect bidders to show up with all the innovative ideas in the bid process. What we want is for them to demonstrate how they innovate, then we can look for them to bring that through into the contracting process. 

What you’ve read is my experiences on other programs. I’m trying to be subtly controversial and a bit provocative to see what their response is because the construction industry is incredibly conservative.

There are good reasons for that, and there are things we can do as clients, but there are things that we can’t do. And so we’ve tried to set the right tone as client, and my provocation is about trying to make sure that people can grasp where we’re trying to get to as a client organisation.

Are there things that people aren’t grasping yet?

I always plug HackTrain [an initiative to revolution the rail industry] because I think they’re doing some really good stuff at the front edge of the thinking on this. They’re a team of people who have gone out to see what modern technology can do for the railway industry. And I’m not seeing anything similar in construction yet. There’s all this amazing new technology and different kinds of thinking, but we’re still stuck in a world of middle aged white guys doing the same thing as they’ve always done – and I say that to middle aged white guys as well!

But there are people who want to grasp that technology, who see the benefits of diverse apps and other software solutions. That’s why we’re so big on BIM. For me, we’d be crazy not to use it. 

And it’s also a way of attracting new people into the industry - something haven’t done a brilliant job of.

If we don’t capture all the new technology, I think we’d really be missing a trick. We’d be losing a whole generation of intelligent people who are going to do something totally different because we’re not seen as modern.

Going back to the design partners, how do you expect them to look at increasing productivity or reducing costs?

There are numerous elements to that. One is that we do need to be looking at cost-led design, rather than what has traditionally been done which is to design it and then knock cost out of it later, so that it’s more ‘this is our budget, how do we deliver the product for what’s in that project’. 

And that does go to productivity, but it also goes in to materials, into how innovation can actually lower costs. Which is why we’re so keen for offsite manufacturing. But we also want to work very collaboratively in that regard, because we don’t think we know everything. We think that our suppliers have a much broader breadth of information and knowledge, but I think also that they don’t know everything. So there’s a whole world out there that we need to explore, and make sure that we understand that and ensure that we’re open to different ideas.

We do have this opportunity, because there is so much infrastructure spend now, to develop a generation, but if we do it the same old way, it won’t be attractive to new people coming in. We won’t get the productivity benefit, and government will take its toys and go home. They’ll say ‘this wasn’t really a good use of our money,’ if there are cost overruns or if things are late, because we haven’t progressed as an industry. 

From my experience there is always a massive tension between doing things to save money and what designers want. How’s that going to work?

I think that there’s creative tension, and I think the question is can we find an answer that’s not mutually exclusive? And in talking to people at Heathrow and Terminal 2, some of the things they did in terms of the design and using different material were cost effective, and also looked really cool. So I think it’s about how can we actually harness that kind of innovation within the cost envelope. And I think for me, iconic does not need to be expensive. But it’s getting past that inherent conservatism, and saying ‘what can we do differently.’

What is it, then, that will be the clincher when it comes to securing a berth onboard?

Skills skills skills! Having so much spend on infrastructure is absolutely amazing, a once in a lifetime opportunity. But because we’ve had shortages and lots of people imminently retiring, one of the big things for me is making sure that through our procurement process we’re building up people capability so we have a solid platform. 

I worry that we don’t have enough people coming into the industry, and that people aren’t getting promoted in the right ways. I think there are some things worth looking at in terms of how consultancies in particular require people to ‘go abroad for this period of time, that’s how you get promotions,’ because it’s not attractive to everybody. And how do you retain people with children, or people who need more flexibility? We need to make sure that we keep attracting and keeping the best people in the business, and promoting them.

So we need to be confident that the companies that are bidding have enough capability to deliver, and understand what their plans are for growing that capability as we go through. What we don’t want is people just nabbing other people’s designers and engineers and pushing up costs.

So for me the big, big thing we’ll be looking for on the design side is how are you building your capability and can you show us that it is going to be a solid platform?

What kind of evidence will you be looking for?

We’ll have the usual things, like show us your CVs and such, but it’s also going to be really looking at how are you going to develop your teams, how is that going to be sustainable through the whole thing. What we want to see is a sustainable pipeline of people coming through. 

Were you looking for that in the design partner as well, or has that moved on?

It has moved on, but it’s certainly in our thinking. Our thinking is always evolving, but obviously we’re looking at the risks as well, and we’re looking at the risks of the timing of all this. Putting out several hundred million pounds worth of design contracts does focus the mind somewhat on what the risks are around that. And really trying to see where we might have some issues. 

And especially because the main works contracts need design resource, we need design resource for phase 2. We have a huge demand for designers and engineers, and are really trying to see that pipeline coming through. 

The industry has obviously consolidated so we don’t have as many companies, and it’s an interesting time in the market, and it looks like we don’t have enough graduates coming through. So how are we going to get that confidence that the biding companies have that pipeline of people, and a steady stream? Because it’s not really in line with our values to flog people for 16 hours a day to get the job done. 

And you’ll be looking for that with your contractors too?

Yes, certainly. We have the great benefit of the national college for HS rail, which is one pillar of our overarching strategy. We obviously want our contractors across the board to commit to using the college, but it’s also how they’re bringing through apprentices and so on. [HS2 will be looking for one apprentice per £3m spent]

On the design side, would you be expecting a consortium to come together in the same way that they did for the design partner?

Well I never expect anything! In phase 1 we had engineering and environment separate, but for phase 2 we’ve actually recognised that there’s such interaction between the two that it makes sense to group them together. 

Whether or not companies have the capability to deliver the whole thing, that’s a company issue, and I know that there are some consortia forming, but I think it’s different from the construction side. Companies form during ventures for two reasons: one, because they have got complementary skills, the other one is for capacity and risk. And on this, it’s not like we’re asking them to take a huge amount of risk. If there’s complementary skills, that’s logical to me. If it’s a capacity issue, I think I would be slightly more concerned about what does that mean for your own resources? And what other contracts are you paying for?

So you need to have some specialisms, there’s a huge logic to that. And that’s why I’m so concerned about this whole strength in depth question, but it doesn’t serve anybody if we have a not very competitive process, because everybody’s formed up into joint ventures. 

On the procurement considerations, and the type of contract, you have already confirmed you’re using NEC and you’re not using project bank accounts. Are there any other details at this stage?

Fair payment is obviously extremely important to us, but we’ve done a lot of research into project bank accounts and we’re not really convinced. I think we can get the same information without them, and the same levels of transparency. 

It’s a cost that has to get built into the project in order to run those, so we made the decision that we think we can live without them. If we don’t get the behaviours we want, we might change our mind. But we’re obviously very committed to making sure we’ve got predictable cashflow coming through the market, and also looking at how we might be able to improve that over the course of time. 

I really think we’re taking collaboration to the next level. And I think we are looking very carefully at what we are as a client, and we’re not in a space where we can micromanage anybody. 

I think it’s a behavioural issue really. If you read our contracts, they might not be wildly different from what you’ve seen in the past, but it’s really the behavioural issues that go along with running an NEC contract, because it is by its nature intended to be collaborative. Whether or not it’s executed in a collaborative way historically is a different issue. 

The great thing about building a brand new asset is you can do things in a brand new way. Some of it will be evolution from the other major projects, some of it will be a bit of a step change with evolution and BIM, and encouraging offsite manufacturing and similar approaches.