The same news was given to QSs Franklin + Andrews, Gleeds, Faithful & Gould and Currie & Brown, which were all told they would get no more new work in the framework period.
The man responsible for telling the firms, which had each spent more than £100 000 on their tenders, was not one of BAA’s feared trio of construction director David Williams, head of projects Simon Murray and supply-chain director Martin Sykes. All three had left the firm before Christmas. It was new construction director Andrew Wolstenholme.
Early next year, Wolstenholme will start renewing BAA’s framework agreements, but the industry is wary. Murray and co have been replaced by a man who is in no doubt that BAA had too many suppliers and that, framework or no framework, some had to go. Some disgruntled suppliers are now saying it is not worth responding to BAA advertisements in the European Union’s Official Journal. After all, BAA has been in bed with its favourite partners for five years – why should it take on anyone new? And with Terminal 5 tying up resources, BAA will not be increasing its construction spend in the near future, so there is little chance that it will need extra suppliers.
So, why should the industry not turn its back on BAA? Wolstenholme is upbeat. “There’s a great opportunity to join the list and win new work,” he says. But what about the firm’s cosy relationship with its existing suppliers? “There is nothing automatic about the renewal of framework agreements,” he asserts.
Wolstenholme’s big gambit is value. A disciple of Sir John Egan’s Rethinking Construction report (it was written by his boss, after all), he talks of paying suppliers in terms of value and not just on the number of hours invested. It all sounds good and very Egan but, like a lot of the jargon spawned by Rethinking Construction, it means little to most of the industry. Asked what he means by value, Wolstenholme mutters something about discussing it at the next principaIs meeting (where suppliers’ directors meet BAA bosses) in September, but fails to present any firm ideas.
At the suggestion that life-cycle costing might be one of the criteria, his eyes light up. “Life-cycle costing is at the heart of Rethinking Construction,” he says. He then launches into a discussion of the much-publicised BAA pavement team, which works on airport runways, and its attempts at life-cycle costing.
With six months to go before the first of the second-generation framework agreements, Wolstenholme has no firm plans of how he will measure value rather than cost. But that doesn’t mean it won’t happen.
Wolstenholme, who is 40, is a capable man. Like Murray, he is a civil engineer by training and worked for Ove Arup & Partners. But the similarities end there. After his degree, he joined the army and served in the Royal Engineers and Royal Armoured Corps, reaching the rank of captain before leaving in 1984. He joined BAA in 1996 as deputy construction director looking after the Heathrow Express.
He was promoted to construction director last October and has stamped his authority on BAA. It was Wolstenholme who first said it had taken on too many suppliers. He is also the man who realised that Murray’s frameworks had reached the limit of their potential.
There is nothing automatic about the renewal of framework agreements
He introduced “clusters”, four groups of suppliers – “we don’t call them subcontractors anymore” – that do all BAA’s construction work. They cover shell and core, fit-out, infrastructure and baggage-handling. These teams sit below the frameworks of consultants that work with BAA on concept designs.
The key difference is that each cluster works as a virtual company. “Each cluster group has its own target,” Wolstenholme explains, adding that this means suppliers are more likely to help each other out than simply look after number one. His dedication to the cluster idea stems from his time in the army, where each soldier depends on his mates for survival. Wolstenholme is proud of his achievements. “Continuous workflow is the key,” he says. “Before, we had people sitting around if there was no work at their airport. Now, with group-wide working, everyone is always busy. We are now delivering international departure lounge facilities for 20% less than we were two-and-a-half years ago.”
BAA’s remaining suppliers also seem happier with the new regime. One leading supplier says he was petrified of BAA’s previous managers but feels he can answer back to Wolstenholme. “Because I can speak up, I’m sure we make more progress,” the supplier says.
Wolstenholme is conscious that his management style is light years from his redecessors’. “It’s now about leadership, not telling people what to do,” he says. “We had to create an environment where we could all work together. If we hadn’t, it would have been difficult to ask people to make changes.”
Despite his military bluster, Wolstenholme seems genuinely concerned when told about suppliers being disgruntled by BAA’s lack of transparency in judging them. With untypical candour, he says: “As a client, we can always get better. I don’t think we’re good enough at post-project appraisals and picking up learning from one project and putting it into the next.”
Wolstenholme’s next big idea is self-certification. Instead of BAA checking and snagging, he wants to give contractors the right to certify their own work – but only with the right audit and compliance scheme.
Another issue on his agenda is payment. BAA is one of the best payers in the industry, averaging 47 days, but Wolstenholme sees room for improvement: “We don’t expect suppliers to be banks – it causes too much anxiety in the supply chain. We will trust people to put in invoices that are accurate and prompt and we will audit them, and if people make mistakes, we will take action.”
Wolstenholme is also on the board of the Movement for Innovation. In this role, he sees a lot of demonstration projects and although he says there are many ideas out there, you get the feeling he is disappointed. For instance, when asked who he sees as the new management talent, Wolstenholme comes up with just one name: Ian Macpherson, who retired from Mace earlier this year.