20 April 2023 2

Context - The Socioeconomic issues for Sellafield Ltd • Sellafield Ltd spends c £1bn p.a. in the supply chain from a total of £1.8bn

and is required to maximise community benefit returns from both SL and suppliers, based on proximity principle

• Other major public procurements build socio economics in from the start – Sellafield is strengthening its processes to encourage suppliers to make stronger socio economic commitments

• Through strategy development socio economic priorities/expectations can be prioritised – focussed on both business needs and community impact

• Sellafield Ltd can impact social outcomes - collaboration with suppliers and local community can significantly improve delivery v agreed business and social outcomes

• Traditional concept of socio economics is changing – increased emphasis on local skills, jobs, businesses and the creation of growth

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Alignment of Socio Economic Strategies

Employment, Education & Training

SME & Local Business Growth

Community Well-Being

Socio Economic Objectives & Outcomes

Procurement & Contract Management (Suppliers)

Delivered Community Benefits (Managed)

SO

CIA

L VA

LUE

NMP Enrich Strategy

Key To Britain’s Energy Future

West Cumbria Economic BlueprintCommunity Plans

NDA ObjectivesLocal Enterprise

Partnership

Strategic Themes

CoNE

Priority Business Areas – Socio Economics

• Closing the long term skills gap (Sellafield and suppliers)

• Vibrant local supply chain supporting Sellafield and suppliers

• Managing impact of Sellafield growth on supporting infrastructure

Sellafield Socio Economic Objectives1. Support a Reduction in local youth and long-term unemployment

2. Improve local pathways to employment through long-term development of education, skills and training matched to SL long-term business needs

3. Increase the proportion of SME work to stimulate growth in long-term skills and services

4. Encourage the local supply chain to support resolution of technological challenges through innovation

5. Support improvements to transport infrastructure and reduce reliance on road transport

6. Reduce the number of people working directly on the Sellafield Site through the development of suitable alternatives

7. Provide skilled resources and direct funding to support community investment

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Embedding Strategy into Supply Chain (Responsible Procurement)

M&O Obligations

SL Strategy & Priorities

Acquisition Strategy

Market Engagement (Messaging)

Tender Evaluation Criteria

PQQ (Restricted)

ITT

Contract Terms & Conditions (Enforced Performance Deliverables)

Golden Thread

PCR Compliance

Statutory Obligations & Policy

Alignment of Procurement and Contract Management

• Acquisition Strategy (include socio economic approach/opportunities)

• Tender Notification (highlight socioeconomics as an important element)

• Industry Day/Communications (reinforce importance in presentations)

• Selection (evaluate credentials, policies and approach)

• Award (encourage specific socio economic commitments)

• Works Information (highlight metrics, measures and targets, incorporate commitments as KPIs linked to fee)

• Contract Management (manage supplier performance, collect data and communicate)

Key Principles

• Socio economics – relevant and proportionate to the contract (typically 5-12%)

• Consider local/regional/national opportunities (linked to SE objectives)

• Structure PQQ and ITT questions to meet business and socio economic requirements of the contract – Golden Thread

• PQQ/ITT/Works Information aligned to Sellafield socio economic strategy

• Specific bidder commitments encouraged and evaluated

• Socio Economic KPIs linked to Fee where appropriate

PQQ & ITT Questions To Incorporate

• Sustainable local employment• Skill shortages and deployment of local skills• Education intervention to promote employment awareness• SME and local business development (client and external)• Technology development and work with suppliers, academia etc• Optimisation of logistics routes, goods, people and stock• Carbon footprint reduction referencing staff location and travel• Socio economic planning and support to community initiatives

Questions adapted to the requirements of the specific contract

Draft Business Socio Economic MetricsObjective Business Metrics

1. Youth & long-term unemployment • Recruitment rates (youth and unemployed)• % recruits living locally

2. Education, Skills and Training • % or hours committed to education awareness• Work experience placements• No. apprentices, trainees, graduates• Conversion to full-time employment

3. SME and local business growth • % SME uptake by value• % Cumbrian (SMEs and non SMEs)

4. Technology Development • No. and £ opportunities generated at Sellafield

5. Transport • % reduction in road deliveries to Sellafield• % reduction in passenger traffic accessing Sellafield

6. Employees on Site • % employees re-located away from Sellafield

7. Community Investment • £ and hours committed to community projects (incl. 3rd party leverage)

Socio Economic Metrics - Descriptions

Socio Economic Performance Metrics – Measured Monthly Description

Current workforce employed (YTD) Current total no. of FTEs equivalents deployed on contract % in 16-24 age group % Disadvantaged groups % recruited directly from unemployment register % workforce living permanently in Cumbria

Actual count at period end of direct FTE equivalents Including those who turn 25 within the month of measure Disadvantaged groups – officially registered disabled and/or ethnic groups Includes temporary employees, but only after period of JSA claims Permanently resident in CA and specified LA postcodes within Cumbria

Annual education performance Aggregate YTD no. of voluntary hours supporting education Total no. of work experience placements delivered (7 days or more)

Current skills and training performance Current no. and % of Apprentices deployed on contract, Current no. and % of Trainees deployed on contract, Current no. and % of Graduates deployed on contract Average YTD conversion % of direct trainees to FTEs

Work in schools, FE and HE including careers fairs, presentations etc Work experience placements in relation to contract and business location

Approved apprenticeship schemes only Formal company training schemes, leading to accredited qualifications Post higher education with degree or higher on a specific company scheme Inclusive measure covering apprentices, trainees and graduates

Annual sub contracted business Aggregate YTD £ value of Sellafield business % of subcontracted business (by value) % SME Uptake based on value of business % of total business by value sub contracted to Cumbrian businesses % SMEs by value based in Cumbria Aggregate YTD hrs spent coaching SMEs in Cumbria

£ value of orders i.e committed work under the contract All work not self performed under the contract (all tier accumulated value) <250 employees and £41M turnover as % of total value of orders Businesses with registered head office in CA and specified LA postcodes As SME and Cumbrian business definition Includes own supply chain development and as part of wider initiative

Road Utilisation Monthly number of vehicles accessing Sellafield (goods and people)

Number of goods vehicle deliveries and estimate of passenger vehicles

Current Space Utilisation on Sellafield Site Total number and % of people routinely accessing Sellafield site Warehouse and laydown m2 capacity and % utilisation at Sellafield

Average on site based workforce >50% time and as % of total direct FTEs Total compound plus warehouse space m2 and ave. utilisation over month

Community Investment Aggregate YTD £ funding committed to community projects Aggregate YTD Hours committed to community projects

£ value projects based in the community, not directly related to SL contract Voluntary hours spent supporting community projects

Sellafield Ltd Socio Economic Update June 2014• Sellafield Ltd Draft Socio Economic Strategy external engagement has

commenced

• Monthly Sellafield Ltd socio economic progress reports established (new procurements and in flight contracts DSA, ISA, MDSW, OneFM)

• Responsible Procurement Plan (flow down of Socio economic expectations) starting to yield positive results from suppliers – Major Projects

• NDA has updated Public Accounts Committee (PAC) on Sellafield progress

• Draft PQQ/ITT/Works Information guidance produced to support procurement and contract management processes

• Plan to flow socio economic metrics into existing contracts – Baseline then set challenging targets on SL and suppliers

Skills/Employment - Improving Pathways – SL and Suppliers

DemandEducation Skills Employment

Education

Engagement

Programme

Apprenticeship

Graduates

NVQ

Short Courses

Outreach

Sustainable Employment

Re-Training

Wo

rk Re

ad

y

Job

Re

ad

y

Supply

Sellafield Programmes

New Opportunities

Long-Term Recruitment Planning

Sellafield supported by supply chain

Summary

• Always think Socio Economics – good business = good socio economics and vice versa

• Encouraging Tier 2 bidders to make socio economic commitments

• NOT selecting Tier 2 on geography but encouraging flow down of socio economic agenda to other supply chain levels

• Most/all contracts will have a socio economic angle – questions are NOT standard but will be aligned to the requirements of the contract

• Very important to flow supplier commitments through as contract deliverables linked to KPIs and fee