Commercial Assurance Metering & Demand Reduction

Phoenix Consulting provided commercial support to Thames Water Utilities Ltd on the Metering and Demand Reduction programme, covering bulk and revenue metering works delivered under a bespoke IChemE contract with amendments.

The contract, originally entered into in 2015, was delivered by a joint venture contractor under a Target Cost, Gain/Pain share arrangement, with works instructed via an agreed rate card. The programme has a total value of approximately £190m, with circa £70m delivered up to March 2021.

The contractor submitted a Final Account for the period to March 2021, including a claim for £2m in gainshare, requiring detailed commercial review, audit, and assurance to protect the client’s position.

Phoenix Consulting delivered:

• Detailed audit of the contractor’s Final Account to March 2021
• Review of target cost, allowable and disallowable costs
• Identification and removal of duplicate and erroneous charges
• Validation of subcontractor final account credits
• Commercial challenge and assurance of gainshare entitlement

Phoenix conducted a thorough review of the contractor’s Final Account, identifying numerous errors and duplicated jobs that had not been previously audited. As a result:

• £3.5m was deducted from the proposed Target Cost
• £750k of disallowable costs were removed
• £444k of subcontractor credits were applied

These adjustments resulted in no further gainshare payment being due for the period, fully protecting the client’s commercial position and ensuring the contract operated in line with its agreed principles.