SERVICE PROCUREMENT PROCESS

Procuring services follow the same general approach as has been documented for purchasing an entire NPP, with some differences in focus. Inviting and evaluating bids for an NPP project is covered in NG-T-3.9 [71], and is similar in many respects to inviting and evaluating bids for a service. The purchaser first needs to prepare a specification for the work (typically called a bid invitation specification or BIS) that is analogous to the purchasing requirements described in Section 3.2. Bidders then prepare formal bids, the operating organization evaluates bids against certain criteria, and a process of contract negotiation and signature takes place. Following signature of the contract the work covered under the contract is executed by the successful bidder under the oversight of an operating organization’s contract manager.

Services can be provided by a supplier with an accredited nuclear management system, or require a CGD process where they might potentially impact on a SR function. Section 4 of [83] contains information on CGD of services.

Additional information on technical support for nuclear operations is contained in IAEA TECDOC-1078 [84]. This section will provide an overview of issues unique to service contracts.

Services can be approached from either a single project approach or in a relationship approach. In the latter approach the parties contract for a period of time for a particular type of work (construction, engineering etc.) over a number of smaller scope projects.

Suppliers can be turnkey / full service / general-purpose suppliers (able to do a wide variety of tasks), or be contracted for specific projects or roles depending on their expertise. Turnkey suppliers tend to develop more plant specific knowledge, but can cost more if competition and oversight are not maintained. Companies need to develop a clear strategy for engagement of service suppliers to ensure company strategy remains consistent and expertise is maintained. Some possible strategies are listed below. These should be shared at a high level with potential suppliers to allow them to efficiently plan and use their resources to better meet operating organization needs in a timely manner.

• Some key work always kept within the owner’s company (i.e. in-house); • Supplier used for overflow work only;

• Supplier used only for balance of plant or non-SR work; • Supplier used only for specialty work;

• Multiple suppliers used dependent on work / specialty.

Newcomer countries typically rely on their NPP supplier for most engineering design and installation support, especially in early stages of the NPPs life. It is normally necessary however, due to the different business drivers and possible motivations of the operating organization and supplier, to develop a “utility engineer” oversight role in order to ensure:

• The supplier understands peculiarities of the specific NPP(s);

• Correct problem definition where problems and solutions may not be clear; • Value for money is obtained for a particular project;

• NPP is not adversely impacted by installed modifications;

• NPP personnel understand implications of installed modifications.

The utility engineer would provide oversight and management of engineering vendors, and in doing so perform such functions as owning and approving project design requirements, providing oversight and acceptance of engineered products (drawings, reports, calculations, modification packages etc.), and performing contract and project management on behalf of the operating organization. Several operating organizations have found this to be a unique skill set that needs development and aptitude that can be different that that needed by staff doing strictly in-house work. Individuals in this role need to be able to plan work effectively, be able to work through others, and be able to mentor, coach, and provide feedback to suppliers without providing specific direction to supplier staff.

Initial contracting for services typically starts with a bid invitation specification. Such a specification would contain the following information:

• Type of work the service provider will do (general support, specific project, specific scope of technical work, etc.);

• Expected volume / amount of work;

• Process for individual sub-projects (how scope is defined, financial arrangements such as need to rebid on sub-projects with fixed price, use of draw down contracts etc.); • Availability / response requirements for emergent work;

• Owner’s engineering and acceptance processes to be followed and committed turnaround times (it is useful for clarity and efficiency to formally identify processes, roles, and responsibilities for acceptance and approval of each document type (e.g. drawing, report, calculation, software, etc.);

• Owner support to be provided (training, licensing support, administrative support, etc.);

• Accountabilities with respect to reporting of defects and corrective action programmes (including interfaces between service provider and owner programmes);

• Commercial / financial expectations; • Need to provide references for past work.

The specification author needs to be sufficiently experienced in that area of work to define the technical requirements and incorporate appropriate monitoring points to allow effective contract monitoring after award of the contract. To prepare a clear and complete specification requires a number of preconditions. These include:

• Sufficient time to study project requirements and convert them to specification language;

• Sufficient knowledge and experience by the author with respect to contract law and contract administration;

• Sufficient knowledge and experience by the author with respect to laws, and industry codes and standards related to the work that is being contracted;

• Sufficient knowledge and experience by the author with respect to the specific system and equipment and area of expertise for the work that is being contracted (including documents, drawings, computer code and other items to be provided to the bidders); • Sufficient foresight to consider what can go wrong and what may change so that

appropriate language can be included in the specification to allow for these risks; • Sufficient knowledge of the plant design, installation, commissioning, maintenance

and operating practices to ensure that any constraint on the work is reflected in the specification;

• Sufficient knowledge of the proponents’ strengths and weaknesses so that appropriate levels of responsibility and owner support, respectively, are included in the specification.

Following specification development, bid evaluation, negotiation for services, and contract execution follows the processes described earlier in Sections 3.5 and 3.6.