AMP8 (Asset Management Period 8) is the regulatory cycle running from April 2025 to March 2030 that sets investment and performance targets for water companies in England and Wales. Ofwat, the industry regulator, uses each AMP cycle to define what water companies must deliver on infrastructure, the environment, customer service, and operational performance. With planned sector investment estimated at more than £100 billion, AMP8 is the largest AMP cycle to date and a considerable step up from AMP7’s £51 billion programme.
For procurement teams, the scale of AMP8 creates pressure on contracting models, supplier relationships, risk management, and process efficiency. Previous AMP cycles offer clear lessons on where those pressures have caused problems, and what water companies can do differently this time.
Below are five procurement lessons drawn from earlier AMP periods that remain directly relevant as AMP8 delivery ramps up.
Plan for longer-term agreements
Each AMP cycle involves large capital infrastructure projects that run across years, and sometimes across AMP periods. Short-term frameworks create a recurring cycle of re-tendering, re-mobilisation, and lost momentum. In previous AMP periods, water companies that moved to longer-term agreements (within the framework durations permitted and justifiable under UCR2016 ) were able to reduce procurement overhead and give suppliers greater certainty.
When suppliers know a contract extends from AMP8 into AMP9, they are more likely to invest in people, training, plant, and systems. The result is a supply chain that builds capability over time rather than one that staffs up and down between procurement rounds.
Water companies planning their AMP8 frameworks should consider whether their current agreement lengths make best use of the regulatory timelines available.
Standardise contracts around NEC4
During AMP7, the water industry began shifting from NEC3 to NEC4 contracting documents. That shift was not universal. Some water companies adopted the NEC4 contract standard fully; others continued with NEC3 or operated a mix.
The lesson from AMP7 is that a standardised approach to contracting makes water companies more attractive to their supply base. In AMP8, water companies are competing for the same contractors and delivery partners as other major UK infrastructure programmes. A fragmented or inconsistent approach to contract documentation adds cost and complexity for bidders. There’s also the risk of losing to projects that are simpler to engage with.
Recent AMP8 procurements have reinforced this. Anglian Water’s new Tier 1 Major Projects Framework, for instance, uses NEC4 Option C with open-book pricing and gainshare mechanisms. That commercial model gives bidders a clear picture of how risk and reward will be shared before they commit resource to a bid.
For water companies still operating mixed contracting standards, moving to NEC4 as the default for AMP8 reduces friction in procurement and signals commercial maturity to the market.
Allocate risk clearly and proportionately
AMP8 programmes involve projects worth billions of pounds. When risk is allocated poorly, the consequences compound. Suppliers add contingency to their pricing, disputes slow delivery, and relationships with the supply base deteriorate over time.
Previous AMP cycles saw criticism from parts of the supply chain about disproportionate risk transfer. Risk should sit with the party best placed to manage it, and the allocation should be proportionate to what the market can bear.
Shared ownership of risk, combined with incentivised commercial arrangements, has produced better outcomes in earlier AMP periods. Gainshare and pain/gain mechanisms are now well understood across the water sector, and contractors expect them. The AMP8 environment makes clear that consistent risk allocation is more important than in any previous AMP cycle.
Water companies that set out their risk position early and stick to it will find it easier to attract and retain delivery partners across the full five-year period.
Build genuine collaboration across the supply chain
A successful AMP cycle depends on coordination across departments within the water company, and between the company, its Tier 1 suppliers, and the wider supply chain. Previous AMP periods showed that when communication broke down between internal teams or between client and contractor, projects drifted off programme and costs escalated.
Collaboration is not a vague aspiration here. It means practical things: open-book working, shared programme visibility, early contractor involvement, and regular performance reviews that surface problems before they become disputes.
Some early commentary around AMP8 mobilisation has pointed to stop-start engagement between water companies and their supply chains during the early stages of capital programmes. Giving contractors early sight of forward work programmes gives the supply chain time to resource, plan, and commit with confidence.
Simplify the procurement process
In earlier AMP periods, some water companies ran procurement processes that were slow, repetitive, and disproportionately burdensome on bidders. Long pre-qualification questionnaires with excessive questions, combined with large numbers of down-selected bidders moving from PQQ to Invitation to Negotiate (ITN), stretched the process and discouraged participation.
Extended procurement timelines delay the start of capital projects. Suppliers who go through lengthy bid processes without success are less likely to bid again in the next round. And the reputational damage from an over-complicated process makes a water company less attractive to the best contractors.
Practical steps that have worked in earlier AMP cycles include reducing the number of PQQ questions while improving their quality, narrowing the shortlist from PQQ to ITN, and running clearer evaluation criteria that bidders can prepare for efficiently.
Water companies that simplify their AMP8 procurement process will move faster from tender to contract award and get capital projects started sooner.
Applying these lessons to AMP8 water industry programmes
The AMP8 water industry programme is unprecedented in scale. At over £100 billion of intended investment, the pressure on procurement teams, contract managers, and supply chain partners will be sustained across the full five-year period. Lessons from AMP7, AMP6, and earlier AMP cycles reflect delivery challenges, delays, and cost pressures that water companies and their suppliers experienced first-hand.
The five areas covered above (longer agreements, NEC4 standardisation, proportionate risk allocation, practical collaboration, and simplified procurement) are connected. A water company that standardises its contracting model but runs an over-complicated procurement process will still lose bidders. One that allocates risk well but lacks open communication with its supply chain will still see projects slip.
Applied together, these lessons give water companies a stronger foundation for AMP8 delivery: a supply chain that is engaged, a procurement process that moves at the pace the programme demands, and commercial arrangements that support long-term performance rather than short-term cost control.