The Nuclear Decommissioning Authority

The NDA is simplifying its sub-contract requirements after hearing that the terms and conditions are difficult to understand.

Under the Management & Operations (M&O) Contracts, the NDA requires its Site Licence Companies (SLCs) to incorporate fairly comprehensive contract terms into all of its sub-contracts, the so-called Flowdown provisions.

However, the Supply Chain has told us that the NDA Flowdowns are complex and difficult to understand.

Last autumn, the NDA and SLCs undertook a series of workshops with Supply Chain representatives to look at how the visibility of opportunities for suppliers could be improved – particularly Small and Medium Enterprises (SMEs), and simplify processes.

The attendees recommended that simplification of NDA flowdowns would make it much less onerous for suppliers to contract within the NDA Estate.

In the early M&O Contracts, the Flowdown provisions were particularly onerous. Although partially revised in 2009, they were still considered complex and difficult to understand. A working group was set up in November 2011 with members from NDA, SLCs, Tier 2 suppliers and SMEs with the aim of highlighting the issues with the flowdowns, clarifying and simplifying the requirements.

Our approach to the review is to limit the Flowdowns to contract terms which the NDA absolutely requires to be incorporated into sub-contracts for two reasons:

(i)       Flowdowns required to allow the NDA to manage the estate (i.e. change of control, novation and assignment provisions); and

(ii)      Flowdowns which are required in order to enable the NDA to comply with its own statutory obligations (i.e Anti-Bribery, Freedome of Information Act, Environmental Information Regulations and Data Protection).

Listening to suppliers, a key aspect was the level at which the Flowdowns were applied - currently this is for all sub-contracts and sub-sub-contracts over £50,000. Sean Balmer the NDA's Commercial Director has agreed to raise the level to £150,000.

Another new feature of the Flowdowns is a clear separation of those Flowdowns that are required at a Tier 2 level only (part A), and those that need to be a Flowdown through the lower tiers of the supply chain (part B). They are also worded so it is much clearer who the parties are, and can be picked up and used directly through the tiers.

Whilst the revised Flowdowns have been agreed with the SLCs and working group members, there will need to be a period of time while the SLC contracts are revised to meet these new requirements.