Reference no: EM131076996

Project partnering at British Airports Authority (BAA)

The construction sector in recent times has not been noted for its high levels of performance. Firms like BAA, who own and operate airports including Heathrow and Gatwick - London's two major airports - rely heavily on their suppliers, including their construction suppliers, for their own

performance. Where construction projects are delayed, the financial consequences can be disastrous. Furthermore, the disciplines of working on airport premises, including the security issues, play a significant part in the daily working lives of project staff. New firms bringing new staff onto the airport sites invariably require time to bring them up to speed with the appropriate ways of working. Particular problems include:

• Security - all personnel with access to airside parts of the airport (i.e. past passport control) must be security vetted and trained. The vetting process takes six weeks, so firms must prepare project staff in advance;
• Deliveries - getting materials into the airport is problematic, due to significant congestion and lack of availability of areas for storage;
• Constant use of terminal buildings by passengers - the closing of areas causes problems with passenger capacity. The firms are required to work with the constraints of passengers using the areas around where the work is being carried out and physical and noise intrusion must be kept to a minimum;
• The commercial activities (shops and restaurants) are the economic lifeblood of the business, with large ground-rents. The objective of projects involving these areas is not simply to complete works on time but as early as possible, so that the areas can start to generate rental incomes. 

The traditional approach to managing fit-out projects (changing internal layouts to accommodate different facilities and in particular new retail facilities) was that every contract was different, and would be negotiated with different contractors. These would then employ their own sub-contractors to carry out parts of the work. The approach that has worked far better for all concerned has been through the appointment of lead contractors, with long-term contracts - in most cases 10 years - to be the prime supplier of fit-out services to B.A.A. This particular contract was awarded to MACE. As part of the agreement, BAA has paid for MACE staff to attend training programmes. This has extended further, with help being offered to their suppliers - of both materials and labour - for development.

Where particular problems are identified, the supplier can be asked to take part in an improvement programme. Satisfactory completion can result in similar long-term deals (tied to continual improvement) being offered to those suppliers. In some cases the problems - particularly with designs for areas - have been the responsibility of BAA. The mechanisms are now in place to identify these problems and to introduce new practices to avoid them in future.

1) Summarise the arguments for such a policy of partnering with a major supplier such as BAA and MACE have done here.

2) Carry out further research to identify further examples of partnering in projects. How well do they appear to be working?