Rolling Stock Maintenance Tender Success
Design and negotiation of innovative commercial model wins extension
- 3 minutes read
Our ASX-listed client, Australia’s largest manufacturer and maintainer of railway rolling stock, was faced with an expiring contract for the delivery of passenger train fleet maintenance services and an asset owner imposing commercial innovation in a prospective new agreement.
Recognising the need for specialist support, ORBIZ was engaged to facilitate the commercial negotiation and mobilisation of a new fleet maintenance contract.
The engagement included developing a new commercial model in collaboration with the customer and developing and then mobilising new operating practices to deliver the contract.
$90M
5
$4M
The approach
The commercial model proposed by the asset owner required the contractor to provide a fixed supply of maintenance capacity each month. This model was a fundamental shift from current practices for both parties.
Due to the complexity of the proposed contract, the ORBIZ consultant was embedded as the overall bid manager, becoming essential to negotiations and the development of the associated intellectual property.
ORBIZ provided a seamless link between commercial negotiation and operational practicalities by conducting and facilitating the parallel development of operational and financial models appropriate to the stages of contract negotiation and execution.
The solutions
The engagement started with collating accurate baseline labour efficiency data for each maintenance activity to develop capacity models and financial estimates for the negotiation. ORBIZ worked closely with the contractor’s financial and procurement teams to ensure the project costings were accurate and would produce a positive commercial outcome.
Accurate pricing options and forecast outcomes were negotiated with the asset owner, ensuring they remained comfortable and engaged throughout the process. Due to the depth of commercial support, ORBIZ provided the final Total Contract Value model, which was approved via the contractor’s internal gate process.
The complexity of the contract led to the development of a comprehensive contract execution document; this ensured the knowledge and intellectual property ORBIZ had built during the negotiation were successfully transferred into the contractor’s organisation.
The handover document is a comprehensive but easy-to-read playbook for those required to deliver the contract. The playbook describes the various components of the contract in terms that the contractor’s workforce can easily interpret and follow.
Finally, a Visual Performance Centre (VPC) was introduced to enable effective communication and contract management across the contractor’s delivery team.
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