Page 15 - Shell 2022 Negotiations 20.05.2022

6/ PRIORITY 3: VALUE IMPROVEMENT - BENCHMARK SAVINGS

As part of the Capex reduction strategy, we propose to put in place a Specifications Cost Manager to drive commercial change to:
• Keep the team accountable savings commitment

• We propose that this will be part funded by AUK with Shell (value approximately £60,000)
• The savings will support the overall Value Improvement target

The Specifications Cost Manager will have key deliverables and will be supported by the design management team. The objectives include:
• Drive the benchmark savings (see the table below)
• Setup and monitor contract scorecard – Quarterly (see the next slide)

• Support the design manager in reviewing specifications and ensuring the passing is saved back to Shell via reduced rates
• Challenging the current design practice

2023/2024
2022/2023 Average 2024/2025 Contractors Balance Scorecard VI/ KPI Bonus
Benchmarks Average
Percentage
Average
Item to be set Percentage Saving in the Percentage
from 2021 Saving in the Savings - reported back Increased work
Saving in the aggregate Main through specifications
aggregate 5% 5.4% aggregate 5.7% Contractors lead allocations

Savings - reported back
1. PKDR Data Required    through specifications Increased work
Electricians lead allocations
2. KDRB Data Required   

EV Destination Savings - reported back
3. Data Required    Increased work
Recharge Design through specifications
IDNO/ICP allocations
Electrical Design & lead
4. Data Required   
Execution
NOTE: Scorecard to be developed as part of the new PMC Team setup
5. EV Canopy Data Required   

Note 1 - The benchmark items are to be agreed annually between AUK and Shell as part of the annual fee proposal
Note 2 - An allowance is to be accommodated for by including an inflation calculation to determine the actual benchmark. This index is to be confirmed by Shell to Artelia
and will take effect when inflation is measured to be greater than 2%. Eg. PKDR – cost 2021 = £1,000,000, inflation in 2022 is 5% the new benchmark will be 1.03*£1,000,000
= £1,030,000.