Our Client is involved in the business of the repair, modification and overhaul of Naval Vessels.
The pricing and control of refitting work is complex with significant customer oversight and emergent work. Sollerta were contracted to study the ship refit process and suggest ways in which the oversight and shadowing activities experienced might be reduced as a contribution to reducing the Client’s overhead.
Sollerta Approach
Sollerta undertook a preliminary visit and interviewed representatives at senior and middle levels of both Client and the local Customer representative to map the refit process. A second phase involved more detailed site discussions with both organisations plus contact with the central customer authorities in Bath and Bristol.
Commercial Issues Addressed
The Pricing of refits.
The problem of programmes based on the work cited in the contract clashing with the onset of further customer defined improvements (Alterations and Additions).
Work arising during refit.
The nature of the contract appropriate to this task.
Project Management Issues Addressed
The Relationship between our Client and his Customer
The Definition and control of work package – the need for early involvement of our Client
The Control of work arising and use of Ships Staff by our Client
Emphasis on working to the contractual agreement
The Result
It is not consistent with Sollerta’s policy on client confidentiality to cover our recommendations in detail. But without breaching client confidentiality, we can summarise Sollerta recommendations as follows:
That the Ministry of Defence’s ‘Smart Acquisition’ principles should be applied to the refit process. (We introduced the concept of ’Smart Refits’)
For Alterations and Additions, we recommended an approach where the Customer would be able to carry out cost, programme and capability trade-offs of refit options using our Client’s own cost data, but without diverting our Client from the ongoing refit programme. Once the Customer had decided the most cost-effective option, he could engage our Client in final negotiation of the price and changes to the programme. This would of course require more openness between our Client and his Customer, but this is a tenet of 'Smart Refits'
We recommended that our Client take full control over the ship refit process. This would enable reduction of the level of his Customer’s oversight with benefits to both sides.
We recommended that the problem of emergent work should be tackled by incentivised contractual arrangements which, when implemented within the project management systems would offer the prospect of reduced overheads and increased profit. (Return to Skill Set)
