SAFESPUR – April 2008

AWE - SUPPLY CHAIN OPPORTUNITIES

Tony Morris - Head of Procurement

DD: 0118 9850130; m: 07810 191863

PRESENTATION OUTLINE

The Contract

Organisation

Expenditure Patterns

Project Examples

Future Developments

THE AWE SITES

AWE Aldermaston

AWE Burghfield

The CompanyMoD

AWE Management LimitedJoint Venture Company

Equal Shares BNFL Lockheed Martin and

Serco

AWE plc Executive Board

All AWE staff

Licence ofPremises,Plant andMachinery

Contract with MoD

100% Ownership

Other Stakeholdersincluding regulatorsand the LLC

AWEML Board delegates AWE plc to perform the contract.

AWEML does not employ any staff

Golden Share

10 YEARS; NOW 25 YEARS

“…. whilst giving the contractor scope to

manage the support areas in a way that

allows the full range of commercial decision

making to be applied.”

MOD - AWE ML CONTRACT

SUMMARY OF CONTRACT

Output Driven, M&O

Target Cost Incentivised Fee

Firm 5 years, Fixed 10 years

Restrictions: IPR, Parent Co, Liability

Legacy funding separate

Assets owned by MOD

SUMMARY OF CONTRACT

Incentivised on performance with annual review of measures (self assessment)

Regulatory requirements incorporated in contract

Basis of the contract is to “Run the Business”

MOD interface through the NW Integrated Project Team (IPT)

“Alongside the modernisation of our conventional

forces, as set out in last year’s White Paper, the

Government remain committed to maintaining the

effectiveness of the nuclear deterrent, including

making the necessary investment at the Atomic

Weapons Establishment, Aldermaston, and to

keep open the options for a successor to Trident

until a decision is required, probably in the next

Parliament.”

FUTURE INVESTMENT

Defence White Paper21 July 2004

AWE

Major ProjectsResearch &

Applied Science

StockpileManagement

SystemsEngineering

Infrastructure Assurance

BusinessManagement

&Finance

Procurement Organisation

Core Services/ Strategic Sourcing

Materials

Facilities

Engineering andConstruction

DISupport

DTES

DSM/DRAS/DSE

Delivery Teams

Performance Management Policy, Process Procedures, Performance Measurement, Analysis compliance, Audit

Contract Support Contract Engineering, Templates, Models,Dispute Resolution, Legal Support, Audit, Review

• Project Strategies within defined options

• Project Deliverables

• Contract Management

• Optimal Purchasing within architecture

• Order Management

• Expediting

• Receipting

• Variations

• Cross Business requirements

• Sourcing

• Purchasing Agreements

• Supplier Relationship

• Supplier Performance

• Corporate Strategy

• Supplier Relationship

• Supplier Resourcing

• Incentivisation Strategy

DMP

Roles

Ro

les

Organisation Chart

Procurement ManagerDerek Morrison

Tel: 50118

Procurement ManagerMark Allen/Peter Isaac

Tel: 54927

Head of ProcurementTony Morris

Procurement ManagerNigel LoweTel: 501120

Major Projects Support

Category ManagementEngineering & Construction

Category Management Materials & Services

Procurement Performance Management

Operational Directorate Delivery

Procurement Change Manager Mark AllenTel: 54915

Procurement ManagerFiona MacGowan

Tel: 54925

SUPPLIER SEGMENTATION

H

L

L H£250kFinancial Value

StrategicValue

AWE Suppliers

List

£8K £1k

LH

(151)

HH

(36)

LL

(847)

HL

(85)

Key Supplier Categories

80 strategic suppliers including the following categories:

- Engineering and Construction

- Design Houses

- Facilities

- IT/Telecoms

- Consumables

- Training /Universities

- Temporary Staff

Contract Modular Architecture

PRISM1

Instructions to Tenderers

PRISM2

The Project Specific

Requirements

PRISM3

AWE Standard

Requirements

PRISM5

Contract Terms

& Conditions

PRISM4

Information to be returned with Tender

Industry Forms

GC/Works1&2

Industry Forms

NEC

Industry Forms

IChemE

AWE Modular1.

Professional Services

AWE Modular2.

People

AWE Modular3.

Product

AWE Modular5.

Purchase Order T&Cs

AWE Modular4.

Product & Site Services

1Professional

Services

2Non AWE

Staff

3Products

4Products &

Site Services

Annex M

ProgrammeEarly WarningCompensation

Defects/ Inappropriate

Supply EVM

Annex M Annex M

ProgrammeEarly WarningCompensation

Defects/In-SupplyTests

Issued PropertyLong Term Support

S/W LicencesImports/Duty

Annex M

ProgrammeEarly WarningCompensation

Defects/In-Supply

Plus clauses for “Products”

Articles of Agreement & General Conditions 1 to 35

Annexes A to L

5PO Terms & Conditions

Default Conditions

DECOMMISSIONING LEGACIES

Programme to 2019

£20-25m pa

Planning / Characterisation design

Safety documentation

Modular containment / HVAC

Size reduction / Cutting operations

Waste / Environmental monitoring

Waste Disposal (RA / Haz / Non-Haz)

DECOMMISSIONING CURRENT PROGRAMME

D7 - Tritium

A1 - Pu Gloveboxes

A50 - Pu Gloveboxes

A37 - Demolition

A25 - Demolition / clearance

R61 - On hold, pending demolition

Questions?