In a three-hour pitch, introduced by chief executive Peter Mason, the contractor suggested margins could grow from 1% under traditional competitive tendering to more than 3%.
Three client case studies were cited with BP Amoco, BAA and BNFL. Under a risk/reward formula used on a BP Amoco project, Amec had fixed margins of 3%. A target was set for costs, and Amec collected 25% of any savings below this, as well as 5% of savings made by finishing within a series of scheduled dates.
Tony Williams, Amec’s new director of corporate affairs, said: “In the past, you had undulations, but we are hoping to have a much steadier pattern of cash flow. And when we are ahead on time and cost, we will share savings.” A City source said: “Amec showed that it can improve the cash flow of contracts and increase visibility and reliability of profit. That will differentiate it from the ‘me too’ contractors.”
- Williams joins Amec from ING Barings, where he was managing director of corporate finance. He also joins the Amec group executive.