Successful Procurement Challenge Against The Nuclear Decommissioning Authority

On 29 July the High Court handed down its judgment in the high-profile Energy Solutions (ES) v Nuclear Decommissioning Authority (NDA) case. The case concerned the competition to become the "Parent Body Organisation" (PBO) for 12 sites operating "Magnox" nuclear power stations, together with two other sites. The PBO would become the regulated site licence company responsible for the decontamination and decommissioning of the various sites.

As one would expect, the procurement process involved the evaluation of highly technical submissions and involved very substantial amounts of public money: the total budget for decommissioning work during the initial even years of the contract was £4.211 billion.

ES bid with Bechtel in a consortium named Reactor Site Solutions (RSS) and was unsuccessful. The contract was awarded to Cavendish Fluor Partnership (CFP) following a bid evaluation which showed a narrow winning margin of 1.06 percentage points in favour of the CFP bid. ES challenged the outcome of the evaluation, seeking damages from the NDA (Bechtel did not challenge the award process).

ES spent approximately £10 million preparing the tender for the competition and expected to receive approximately £100 million in fees for its role in managing the delivery of the decommissioning work. Although damages are not addressed in the judgment, these figures give a rough idea of the potential value of ES's claim.

The judgment runs to over 300 pages. In this blog post we can only draw attention to a small number of the interesting points that the case raises.

Legal issues

The key issues the court had to decide can be summarised as being:

If properly evaluated, should the RSS bid have received a different or higher mark than that awarded by the NDA evaluation? Should CFP have been excluded from the procurement on the grounds of being non-compliant? If not, and if properly evaluated, should the CFP bid have received a different or lower mark than that awarded by the NDA evaluation? What was the impact of information that witnesses providing evidence in support of ES's claim were offered "win bonuses" to be paid if the claim was successful? Scoring of the RSS bid

In considering the first issue, the judge set out some very useful guidance on the standard expected of authorities carrying out evaluations, fleshing out the idea that the courts will intervene where there has been a "manifest error" in the assessment of the bid.

The judgment also gives useful...