A few months back, we published several articles about the very interesting – and somewhat shocking – court case around the UK’s Nuclear Decommissioning Authority’s contract to clean up old nuclear power stations.
The NDA case (click link to get the full judgement) involved a challenge by Energy Solutions Ltd. who were the incumbent supplier for a huge contract to clean up de-commissioned nuclear power stations. They lost the tender, run by contracting authority the NDA, to a Babcock Fluor consortium (known as CFP in the court documents). The procurement process was challenged by the unsuccessful bidder, who won their case as Justice Fraser found that the procurement process was flawed and fundamentally unfair.
We indicated at the time that although the NDA said they might appeal the decision, it was unlikely to succeed. As we said at the time – “Some of the NDA’s claims (excuses) in court would be laughable if it weren’t for the £100 million bill for the taxpayer that their incompetence is likely to cost us”.
How right we were! The NDA has not appealed, and the cost to the taxpayer is very close to our guesstimate. As the BBC reported:
Two US firms which lost out on a decommissioning contract to clean up 12 nuclear sites in the UK will receive £97.5m compensation. The government has also ordered an inquiry into the “deeply flawed” tender. The £6.1bn contract, awarded in 2014, is being terminated nine years early.
The independent inquiry, which will be led by the former chief executive of National Grid, Steve Holliday, will look at how the tender process was run and why the contract awarded proved unsustainable. It will report in October.
Let’s be clear; this is direct money out of every UK taxpayer’s pocket, £2 from every one of us basically. Or look at it another way – that would pay for 3000 nurses for a year. And all because of gross incompetence by the NDA, their senior management, those leading the procurement process, and of course their external advisers.
I hope the lawyers involved, Burges Salmon, have their professional indemnity insurance in order, because I would be going after them for a big contribution towards that payment. How they could imagine that the NDA would survive a challenge is beyond me. (And how exactly did they make it onto the new CCS UK government legal services framework?)
We’re being a bit outspoken here because this is a huge sum of money to be lost because of a crappy procurement process. As we said before in previous articles, the errors were blindingly obvious to anyone with any real experience of public procurement.
Changing the “rules of the game” during a procurement – setting binary “in / out” evaluation factors then ignoring them, for instance. Or how about agreeing consensus scoring in the evaluation process, then having an individual go back into the system and unilaterally alter the scores, with no audit trail explaining why. Oh yes, he asked the evaluation panel who supposedly said “yes, we’re OK with that” – but didn’t explain why. They should all hang their heads with shame over this, although we suspect that more junior staff must have been pressurised into making these crass decisions.
Holliday is not a procurement man, so we hope he might listen to some people who are – and who knows whether he is a political stooge appointed to just smooth things over, or someone who will really try and get to the bottom of this? We suspect someone very senior forced through the dreadful decision – was that even perhaps at political level? Or very senior executives at the least?
We’ll see what Holliday comes up with. Perhaps he might even like to come and talk to us.