Enterprise And Supplier Development AECOM

Enterprise and Supplier Development(ESD) Mario Venter Executive, Resources and Industry AECOM South Africa

. Gas to Power definitely has a place in in Africa’s power generationand energy sector and will clearly provide invaluable contribution to theeconomic growth of the continent.But let us not forget .Enterprise and Supplier DevelopmentESD

For the seventh consecutive year, Engineering News-Record (ENR) has rankedAECOM as the top design firm in the United States. The annual rankings wereannounced in ENR’s 2016 Top 500 Design Firms listing last week. In additionto a number one ranking, our company excelled in several individualcategories, including:# 1 in Transportation# 1 in General Building# 1 in Hazardous Waste# 2 in the Top 50 Designers in International Markets# 3 in Water# 3 in Sewer and Waste# 4 in PowerIn an interview with ENR, Fred Werner, President, Design and ConsultingServices Americas, said, “We no longer just draw up a set of plans to handover to the contractors to tweak and build. Now, we are at the forefront ofassessing the client’s needs, deal-making to finance a program and planningits execution.”

Presentation OutlineESD unpackedCase Studies: The AECOM ExperienceESD: Risk Management Approach

ESD unpacked

The ESD universeLEGISLATIVEFRAMEWORK Policy Strategy Institutional Framework Report , Monitor and Evaluate1. Local suppliers Skills & Capability levels Implementation opportunities Industrialisation Direct contract opportunitiesGaps & needs analysis2. Foreign suppliersValue Chain Analysis3. Client needsMinistry, Parastatals,Private clients Implementation requirements Skills/technology transfer Procurement strategies Value chain opportunities Resource needs - skillsdevelopment, training, research,educational requirements System needs- technology transfer Process needs- Reporting, Auditing

Local Participation Local economic development and sustainability Job creation and skills retention Experienced team leadership Compliance monitoringDemand and Quality controlSupply StatusQuo AnalysisDevelop entifyOpportunitiesand Gaps

ESD ComponentsTechnologytransfer using ourbest-in-industrypractice systemsand processesSkilled andunskilled jobcreationESDLocal spend toimprove logisticsand support localbusiness sectorsSkills transferthrough oversight,mentoring, onthe-job trainingand quality control

ESD Focus AreasFOCUS AREASDESCRIPTION1.Job Creation & Job - Increase or preserve number of jobs by thePreservationcontractor- Award of business from the project- Favouring a more labour intensive method of jobcreation- Emphasis on skilled, semi-skilled, unskilled, locallabourers/employees2. SkillsDevelopment- Refers to skills transfer with emphasis onaccumulation of knowledge & experience- Generally targeted at sector specific skills, withfocus on artisans & technical skills

ESD Focus Areas3. Local/NationalSpend- Refers to suppliers/sub-contractors functioningwithin the project community, region, district orcountry.- What is manufactured locally and what isconsidered an import4. Small BusinessPromotion- Encourages the growth & expansion of SMME’s &start-ups through procurement & supportmechanisms- Emphasis on black owned & black woman ownedbusinesses- Enterprise Development

ESD Focus Areas5. TechnologyTransfer- Refers to the process, know-how and IPassociated with developing a comprehensive localsupply base6. RegionalDevelopment &Rural Integration- Refers to suppliers/sub-contractors functioningwithin local communities and regional areas fromwhich goods & services will be procured- Enterprise Development & Socio-EconomicDevelopment

Case Studies:The AECOM Experience

Project Life Cycle NeedsPRE-BID PROCESSESDURING BIDCONTRACT NEGOTIATIONSPOST CONTRACTAWARD

Pre-Bid Process Local content Strategy developed for Packagesbefore the bid is released to the market

Tender Requirements Tenderers must submit an ESD Plan with targeted figures equatingto no less than 25% of the total of the prices of the Contract (exVAT) The ESD Plan must indicate how the Tenderer plans to achieve theset 25% of the total of the prices of the Contract by allocating spendto the ESD Focus Areas Tenderers not submitting a signed the ESD related ReturnableSchedule and not committing to the minimum ESD target of 25%,will be eliminated from further evaluation ESD is a pre-qualification criteria and Tenderers not conforming tothe ESD requirements, will be deemed non-responsive ESD is a contractual obligation which carries penalties for ESDtargets not achieved (related contractual and commercial clausesare included)

Tender Evaluation MethodologyA South African state owned parastatal utilises the following methodology andcriteria in selecting a preferred Service Provider in certain Design tenders:

Post Bid : Tender example of SupplierDevelopment Strategy Prioritise and engage qualifying small businesses Include mentoring and skills development in resourcingplanStrategy Employ an independent company to report, manage,monitor and ensure our compliance Pre-plan and supervise teams’ skills development programs& courses through independent yet relevant organisationslike CESA/ SAICE

Post Bid : Tender example ofSupplier Development StrategyImplementation Pre-bid submission Identified and approached suitable partners for the technicalscope Identified suitable work scope for qualifying Partners Identify resources needs that will meet job creation early inthe manning plan Post-bid Submission- To mitigate risk against non-compliancewith SED if successful Workshop with local partners to explain Client & project Teamrequirements Packaged out scope of works through an RFQ process topartners so that technical teams to assess and identify suitablepartners

Spend CalculationPreserved/retained Jobs- manmonthsProject relatedpre-requisitetraining (programmes hours)Project relatedExpensessecurity,cleaning,travel, etc.Projectmentors Rates-Cost tocompany ofnew hires(BM,WF,BF)man-monthsSub-consultingscope –manhours , roles,potential SEDpartnersESDSpendMan hour rates( mentors, newjobs, retainedjobs, trainers)

ESD: Risk Management Approach

Typical ESD Risks Additional costs as ESD is a project on its own Interfaces for ESD implementation at project level include: HR, Finance, Technicalteams, Procurement, etc. Constant changes in Client’s goal posts for ESD - localisation, skilled /unskilled,women/youth, area specific consultants, etc. Lack of sound stakeholder relations Database of appropriate ESD companies Relatively low priority for the project (Delivery of project on time & budget) Stringent project deadlines Lack of project line functions’ support and contribution Multiple ESD audit companies with different reporting requirements fromgovernment side Portfolio of evidence unclear from Client’s side Anticipated/ Projected ESD targets versus actual ESD targets

Risk Management approachComponentsRisk MitigationSupplier developmentmanagement systemsOnline system that is easy to link into and provide reportinginformation.Independent audit processJob creation, preservation,retentionSmall Business Development& Local spendBuild a portfolio of evidence.Pre-planning job designations in the resourcing plan forsupplier development for all project phasesCompile a database that allows ESD complaint companies toregister and be audited.Technical teams need to pre-plan based on companiesavailableSkills transferIdentify train the trainer skilled individuals in the resourcingplanReduce subjectivity of the training and make it structured.Technology TransferIdentify technology and IP training and software transfer thatcan be utilised.

Key Success Factors

Local Participation: We Have Done itBeforeGautrainProjectPMR. ortedAward - stimulate economic growthand development inTshwane Municipal District

Local Participation: We Have Done it BeforeProactive facilitation and support: Transfer of skills & knowledge Process based on experience of Monitoring and compliance of EnterpriseDevelopment and Supplier Development Gautrain Rapid Rail Link Renewable Energy Feed-in Programme Gauteng Freeway Improvement Project (SANRAL) Cape Town EPCM Programme (Transnet) Ngqura Manganese Export terminal project (Transnet) Gibela Rolling Stock Manufacturing Facility (ALSTOM GIBELA)

Questions

Thank you

Typical ESD Risks Additional costs as ESD is a project on its own Interfaces for ESD implementation at project level include: HR, Finance, Technical teams, Procurement, etc. onstant changes in lient’s goal posts for ESD - localisation, skilled