27 April 2009

After 30 years in the public sector, Steve Rowsell has turned to the private side. Paul Snell asks him about his experience as interim procurement director of Europe's largest construction project, Crossrail

Wherever you have travelled in the UK by road in the past three decades, it is likely Steve Rowsell played a part in helping you on your journey.

His career at the Department for Transport spanned more than 30 years, initially as a civil engineer, then he took charge of construction, and eventually he became the first procurement director of the Highways Agency (HA).

The prestigious (and often controversial) projects he has been involved with include the second Severn crossing, the Newbury bypass and the Birmingham Northern Relief Road (now the M6 toll road). He acted as one of Sir Peter Gershon's "change agents", and has appeared as an expert witness in two recent landmark public procurement legal cases.

His current role, as interim head of procurement for London's £16 billion Crossrail project, is perhaps the most high-profile so far.

SM spoke to him to find out how it all began, what lessons he learnt along the way and how he's applied them throughout his working life.

CAREER BUILDING As a teenager Rowsell decided to pursue his interest in "practical things" with a career in engineering. Following a degree in civil engineering at Plymouth Polytechnic, and a year out in industry, he joined the then-Department of Transport's graduate training scheme. There he quickly discovered the impact that high-profile projects had.

"On one of my first days I attended the public enquiry for the M3 where it bypassed Winchester. "There were extensive objections, and on the day I visited, the headmaster at Winchester College rode into the enquiry hall dressed as King Alfred on a white horse. So the need to pay very close regard to the environment and requirements of local communities struck me quite early on.

"Those initial experiences made me realise project management was much more than simple engineering. It's about stakeholder management, good procurement and making sure you get suppliers you can work with in a way that mitigated these types of impact."

In the early 1990s a promotion saw Rowsell move into the construction of projects, giving him his "first taste of real procurement and contract management". Work on major schemes in the Midlands led to him taking charge of all construction in the southern England area in 1994.

"It engaged me with the different forms of contract the department was using at that time, which had become very adversarial with many claims disputes.

"I was responsible for settling claims on old final accounts and it made me recognise there must be better ways of establishing contracts that avoided disputes."

STRAIGHT ROAD Rowsell was later appointed head of the Highways Agency's Construction Operations Directorate, helping to develop new design and build contracts and partnering arrangements. And when the HA decided to establish its own procurement function, he jumped at the chance to lead the team and take a place on the management board.

The role included developing a procurement strategy from scratch to cover the Agency's £2 billion annual spend.

A legacy of this strategy was the development and implementation of Early Contractor Involvement (ECI). This did as the name suggests - involved suppliers early in the procurement process to harness innovation, and achieve better risk management and resource planning.

Rowsell also served on the OGC's Chief Executive's Advisory Group for five years and acted as one of Sir Peter Gershon's "change agents", helping to find efficiencies in local authority road projects. He also advised national working groups on issues such as resource planning and fair payment in construction.

But having served as procurement director for six years, and worked in the public sector for more than 30, Rowsell was keen to experience life in the private sector. And, he says, although the agency had taken ownership of the new purchasing strategy, it was necessary to "take a fresh look" at it.

"While I was there, there was always a risk people wouldn't challenge aspects of it as far as they might because they didn't want to upset the owner - which is nonsense, because we wanted to be challenged and to improve."

Rowsell linked up with his former HA colleague Gary Wright, who had been working in the private sector at engineering firm Birse, and together they launched procurement consultancy Rowsell Wright in early 2007.

"When I left the Agency there was no safety net at all. There was no work lined up. We were worried beforehand, and if we got one or two days' work we would be happy, but we have been inundated with opportunities."

CROSSRAIL One of those opportunities presented itself when Rowsell Wright was appointed as a supplier to a framework by the London Development Agency, which was open to Crossrail owner Transport for London to use.

Doug Oakervee, executive chairman at Crossrail, wanted someone who understood public sector procurement and could help the sector innovate.

So Rowsell was hired as interim procurement director for the project to construct a new railway line through the middle of London, from Maidenhead in Berkshire to Shenfield in Essex. This is due to open in 2017, at a cost of £16 billion.

Oakervee wanted a change from the traditional adversarial approach buyers in the railways sector had taken with contractors in the past. So Rowsell adapted the Early Contractor Involvement approach and it became "Optimised Contractor Involvement".

This involves Crossrail retaining the design of the project, but giving contractors the chance to review designs, examine their construction feasibility and value for money, and contribute ideas before it's built.

Rowsell's prime responsibility has been to purchase what could turn out to be the project's two most important contracts: a programme partner, to help manage the project, and the project delivery partner, to oversee the tunnelled section of the route through the capital.

Transcend, a joint venture between consultancy firms AECOM, CH2M Hill and Nichols Group, were appointed to the £100 million programme partner deal in March. And engineering and construction firm Bechtel has won the £400 million delivery partner contract. Transcend will support the procurement team at Crossrail in developing plans to implement the strategy, and bring specialist purchasing knowledge to areas such as rolling stock. Crossrail will award and oversee the contracts for the tunnel section but Bechtel will manage the purchasing processes.

When the short-list for the project delivery partner was announced Rowsell spoke of the necessity of "chemistry" between Crossrail and its partners - something he says goes beyond organisational structure.

He asked questions such as: "What approach do those companies have to developing a single culture where you've got joint ventures? What have those joint ventures done to establish values and behaviours, and to embed those within the individuals?"

If you're looking to work in partnership and collaborate, he says, you need to know your suppliers have developed staff to work in that type of culture. The selection of the right partners is crucial to the project's success.

"It's a high level of responsibility, but we are committed to ensuring Crossrail gets the best possible partners to deliver."

His role requires him to work very closely alongside the rest of the Crossrail project, where he says there's a strong governance structure, which means that while procurement is leading the process the executive committee of the board takes ownership of decisions.

As Europe's largest construction project, the Crossrail programme is expected to employ 14,000 people at the height of construction. And the economic impact of the project is anticipated to be worth an extra £1.24 billion annually to London and the South East by 2026.

He believes the recession could have a positive effect on the project in some areas. "The downturn in other parts of the construction sector means some of the inflationary pressures that were envisaged are reducing.

"In that respect there is an opportunity to get better value from the funds available. There's no doubt inflationary pressures, particularly on the materials side, is now seen as less of a risk - but it is not a risk you can afford to ignore."

He won't be involved in the project indefinitely, as new chief executive Rob Holden, who took up the role this month, will bring in his own team. Good succession plans are vital but will be drawn up when Rowsell's successor has been identified. "That will be a very important element," he says, "and a big challenge, because the next stage is moving to the construction contracts. That's high-profile stuff, and carries significant responsibilities in terms of compliance and best value."

MORE INFO:STEVE ROWSELL: EXPERT WITNESS

In addition to his work at Crossrail, Rowsell has had a cameo role in two recent landmark public procurement legal decisions.

He acted as an independent witness in the cases involving challenges by suppliers to the award of two framework agreements in Northern Ireland - McLaughlin & Harvey and Henry Bros (Magherafledt) (Law update, 8 January).

He believes public sector buyers can learn lessons from the decisions, where the judges ordered the scrapping of the agreements following mistakes in procurement.

"This is one of the difficulties with public sector procurement at the moment," he says. "You really have to keep on top of case law to know what the risks are.

"We do some work with the private sector and look at tender processes other authorities are putting out. I have very recently seen some where mistakes that have been ruled on in case law are still made, it's quite worrying."

He says it's difficult for buyers to keep abreast of developments and ensure they remain compliant. He adds that even more challenging is that no matter what steps you take, challenges will occur and the ultimate decision can come down to "what the judge thinks on the day".

"It is very frustrating for a public sector client when they put all that effort into getting it right, but to get it 100 per cent right - so it can't be challenged - is impossible."

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