Britain’s Nuclear Decommissioning Authority “manipulated” and “fudged” a tender process for a £7bn contract to clean up the country’s nuclear power plants, the High Court has ruled.
The judgment, handed down on Friday, raises fresh questions over the way government entities hand out multibillion-pound contracts and casts further doubt on the UK’s nuclear industry a day after the government’s decision to launch a review of the £18bn Hinkley Point project. It could eventually cost the government hundreds of millions of pounds in damages.
The NDA said it was considering its legal options after the ruling, which found that it had wrongly awarded one of the government’s largest contracts to Babcock, the UK engineering company, and Texas-based Fluor. The claim was filed by Energy Solutions, the US-based company that lost the contract after managing the nuclear sites for 14 years.
Energy Solutions, which bid for the contract in a consortium with Bechtel but took legal action against the NDA alone, said it would press for “significant payment . . . for the damages caused by the NDA’s incorrect decision”. It has previously signalled it would seek up to £200m in damages.
Justice Peter Fraser found that, had the NDA’s own evaluation rules been correctly applied, Babcock and Fluor would have been disqualified from the tender process, adding that the authority made “many manifest errors” in reviewing the Energy Solutions’ bid.
The court found that the NDA had “manipulated” the valuation process in order to avoid disqualifying the Babcock-Fluor bid. “In my judgment the NDA sought to avoid the consequence of disqualification by fudging the evaluation,” Justice Fraser wrote in his ruling.
He found that the NDA “fell short” in meeting its obligations of “transparency and equal judgment”.
The NDA sought to avoid the consequence of disqualification [of Babcock-Fluor] by fudging the evaluation
– Justice Peter Fraser
The NDA argued that it had conducted the tender correctly and it would have been “disproportionate” to exclude a bid for failures it considered “trivial” or which had “no real impact”.
The NDA made a last-ditch bid to have the claim thrown out of court over the disclosure that witnesses for Energy Solutions were to receive substantial bonus payments in the event of a court win. However, the judge rejected the claim, saying the bonus payments did not affect the findings.
The contract involves the clean-up of 12 of the UK’s 25 nuclear sites, including the Sizewell, Hinkley and Dungeness “Magnox” nuclear power stations built in the 1960s which have reached the end of their lives.
The government is facing increasing scrutiny over its procurement process following the referral of G4S and Serco to the Serious Fraud Office for overcharging on electronic tagging contracts for offenders, and the West Coast main line rail franchising debacle two years ago.
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