While planning for two shutdown events at their refinery, our client faced serious budget challenges. Contractor tenders for non-destructive testing (NDT) came in at £2.27 million above budget.
GCM was engaged to revise the procurement strategy. By assessing the real programme requirements and restructuring the contract model, we secured an immediate £687,000 cost saving, with more to come during the second shutdown phase.
Our client is a refining and energy trading company responsible for operating a prominent UK refinery.
Our client was preparing for two major maintenance shutdowns. After a tendering process for NDT works, the costs were significantly higher than expected. Contractor quotes came in £2.27 million over budget.
Works for both events had been priced as singular lump sum fixed contracts. Uncertainty about the scope, resource requirements and delivery schedule — particularly for the second phase shutdown — meant that prices were inflated by built-in risk contingencies.
GCM was engaged to improve the procurement strategy and reduce our client’s financial outlay.
GCM carried out a full review of the project requirements to understand the pricing implications. We recommended splitting the two shutdown events into separate contracts so each could be managed with clearer scopes and expectations.
By moving away from a rigid fixed-price model and instead using more flexible agreements, we could ensure that costs reflected the actual work being delivered. After agreeing fair rates between our client’s team and the main contractors, we tracked progress throughout the project to secure savings as work progressed.
Through restructuring the procurement process and tracking work progress, we delivered immediate savings for our client. Results for the first shutdown event included:
In addition, our client now has improved visibility and control over contractor costs. A similar approach is being used for the second shutdown event, where further savings are anticipated
To learn how we can support your construction business, speak to a member of our team.
