Commercial Assurance

16 Jul

Summary

Deecon were engaged by John Henry Group (JHG) to conduct a commercial review of the CityFibre Cambridge project. Through enhanced commercial review, contract management and supplier management, Deecon strengthened commercial controls, substantiated Compensation Event (CE) claims and identified cost-saving opportunities.

The Requirement

JHG is a telecommunications contractor who were contracted by CityFibre to support the delivery of fibre-optic infrastructure to homes across the Cambridge area between April 2019 and October 2020.  

JHG engaged Deecon to conduct a commercial review of the CityFibre Cambridge project, with the objective of strengthening commercial controls, enhancing revenue outcomes and identifying opportunities for cost optimisation. Deecon worked closely with JHG’s teams to review existing commercial processes and implement improvements across four key workstreams, supporting improved cost recovery and long-term commercial performance.  

The Solution

1. Commercial Review  

Deecon assessed JHG’s commercial delivery structure through a comprehensive review of documentation and interviews with key stakeholders. This review identified opportunities to enhance governance and consistency, which Deecon then implemented in collaboration with JHG’s in-house teams.  

JHG’s record-keeping processes relied on multiple data inputs, creating inefficiencies and potential for error. Deecon introduced a suite of robust commercial assurance templates, including formalised Early Warning Notice (EWN) and Compensation Event (CE) processes, standardised payment applications, and electronic documentation of works. We implemented an automated Cost Value Reconciliation (CVR) model, reducing reliance on manual intervention and improving data transparency and auditability.  

To support recovery of contractually entitled revenues, Deecon developed structured evidence packs to substantiate submitted CEs, with claims totalling ~£600,000. In addition, a robust methodology was introduced to support effective recovery of future CEs, including the implementation of a Contract Variation Instruction (CVI) process to ensure all costs associated with site changes were appropriately recorded and recovered. 

2. Contract Management 

A review of JHG’s subcontract arrangements identified an opportunity to improve consistency and alignment with the main contract. Deecon supported the introduction of standardised subcontracts, incorporating composite rates aligned to the CityFibre contract, ensuring greater clarity and commercial alignment for both existing and future subcontracts. 

In addition, Deecon developed a detailed programme for the Cambridge Fibre rollout to help enhance project accountability and mitigate operational risk. Deecon created a programme accounting for the start and finish of 180 Primary Nodes (PNs), introducing baselines at the PN level, to ensure protection of preliminary payments and associated claims. 

Regular touchpoints were also introduced to support collaboration between JHG and CityFibre. These included structured meetings between JHG’s Commercial and Operations teams and the client, enabling proactive discussion of programme updates, anticipated changes, and emerging risks. 

3. Supplier Management  

Deecon reviewed JHG’s subcontract arrangements and supported the development of clearer contractual scope, schedules, and rates. This improved transparency and consistency across the supply chain. A detailed valuation exercise was undertaken across subcontractor accounts, including a focused audit of one subcontractor’s expenditure over a 25-week period. This exercise supported commercial alignment and resulted in the issue of a payless notice to claim savings for unevidenced works to the value of ~£180,000.  

To facilitate effective governance of payments and delivery across the subcontractor portfolio, Deecon implemented a standardised invoicing process which included introducing measure sheets, payment application templates and payment calendars. 

4. Cost Reduction  

Following a supply chain assessment, Deecon identified opportunities to optimise the cost of key materials. Deecon benchmarked key site items through a comprehensive audit of JHG’s spend data, enabling informed and constructive negotiation with suppliers and supporting procurement of key spend items in line with prevailing market rates. 

In one instance, this resulted in a reduction of ~£107,000 in one subcontractor’s billed material costs. Going forward, the implementation of enhanced controls ensured consistent sign-off for works on site and full visibility of all materials ordered on JHG’s account.