The Olympics “Delivery Partner” model – a precedent worth following? (Part 1)

The ODA – Olympic Delivery Authority  - have had a lot of praise for their work on the Olympics, much of it justified, particularly the venue construction work coming in ahead of schedule and to budget. However, the ticketing process hasn’t been plain sailing, (it's been pointed out that this is LOCOG responsibility - apologies to ODA) and we still have to see how some of their other areas of responsibility pan out – let’s hope transport and security work as well as the construction process.

But they haven’t always been as open and transparent as they might have been. Have a look here -  that is how they declare their senior management salaries and other information.  Not exactly clear, is it?

London Olympic Stadium, 2011

On the construction front, their innovative use of CLM as a “delivery partner” won them positive reviews, and indeed two CIPS SM awards last year.  CLM managed the major construction projects on behalf of ODA, and (I believe) also played a role in some of the procurement exercises. So while ODA have taken the credit for the delivery of the venues to time and budget – which was indeed an excellent achievement - arguably the team from CLM should have at least shared in that. CLM themselves are a consortium made up of Mace, CH2MHill and Laing O’Rourke, and they’re very low profile – their website is just a home page for instance.

What has been noticeable is a lack of discussion about the costs of the “delivery partner” model. When we’ve featured ODA here, we’ve had a few comments from readers saying “it’s easy to do well when you have unlimited cash”. A little unfair – construction projects can fail even when money isn’t an issue, as we've seen many times in the past!

The question of cost though is becoming more important in a wider context. Other parts of the public sector, principally MOD, are looking at the “business partner” model – in effect, outsourcing contract management through the construction / development phase, and probably including elements of procurement as well in the outsource. Certainly one of Bernard Gray’s ideas as Chief of Defence Materiel is thought to follow that ODA / CLM precedent.

We therefore decided to ask a few FOI questions about CLM costs. Now the total ODA spend with CLM is in the public domain – if you know where to look. But it is hard to get a sense of what that actually bought ODA. So we asked about the numbers of staff working on the programme for CLM.  Given that CLM were basically providing people, in a professional services type manner, that at least gives us an idea of how expensive this sort of model might be if replicated elsewhere.

So, looking at it simplistically, how many people did CLM have working on the management of the construction programme (this data wasn't in the public domain), and how much did that cost?

Stay tuned tomorrow and we’ll have the numbers.

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Voices (8)

  1. Final Furlong:

    The original ‘budget’ for building the Aquatics Centre was circa £90m – the actual spend was nearly £300m, and yet it was delivered on-time and ‘under-budget’?

    Take a look at the Olympic stadium, its ‘total’ costs (not just build costs), and its quality, and then look at the Emirates, its cost, and overall quality. Where did the money go? Most of the quality was ‘value-engineered out’ by the ODA/CLM approach.

    This wasn’t about money, or quality, or, importantly, the next thirty years, it was all ‘building it on time’ (and as fast as possible), so we looked good to the IOC…

  2. Huhh?:

    At 9 billion quid to taxpayers expense to benefit mostly London, run by men of dubious ethics and attended mainly by corporate sponsors and the super rich, and competed in by drug enhanced competitors, I think the legacy will be wonderfuly permanent and positive fir future generations.

    Should have handed the whole thing back when the recession hit.

  3. David Atkinson:

    Anyone got any spare tickets for the 100m Final? I have some old business cards from my corporate career. Will that help?

  4. John:

    Keep digging.. The legacy from the Athens and Beijing Games was a number of stadia that are rarely used and maintained at public expense. The changes at the Olympic Park Legacy Company, recently announced with Baroness Ford announcing her retirement after the games may be worth looking at.

  5. Dr Gordy:

    Interesting parallel discussion tonight on Dispatches.

  6. Dr Gordy:

    Great stuff Pete, thanks.

  7. Final Furlong:

    The ODA doesn’t do ticketing – that would be LOCOG.

    LOCOG was set up by central government, is governed by central government, and is completely under-written by government (think of security for Games-time), but is somehow exempt from all EU Procurement Regs?

  8. Ian Heptinstall:

    Looking forward to seeing your numbers Peter. It will be very interesting to see whether they have “just” managed projects well (itself not a trivial task), or have brought some innovative improvement to the sector. Do the numbers give us some insight into whether the durations are shorter than traditional?

    PS the salaries info is only a couple of clicks away from being in a spreadsheet – good old Bill Gates. I cant see a Director of Procurement in there – Mike Cornelius as Director of Commercial is responsible for procurement matters…at £140Kpa..same as finance, higher than HR, but way below the various property/design/construction/communications folks.

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