Nuclear De-Commissioning Authority Loses Supplier Challenge – So Much To Say!

We mentioned the recent court case featuring the Nuclear De-Commissioning Authority, who lost a challenge to a procurement decision. The judgement is available here - all 336 pages! The challenger was Energy Solutions Ltd, the incumbent supplier for the huge contract to clean up old power stations. They lost out to a Babcock / Fluor consortium, who took over the work after "winning" the contract.

Actually, the first interesting point was that Bechtel, who were part of the incumbent consortium, did not challenge. Will they now regret that, given that Energy Solutions stand to be awarded a very large sum of money, potentially £100 million?

Anyway, as we hinted when we first mentioned it, there is a whole range of issues that will keep the procurement lawyers interested for years. This is going to be one for those cases that is quoted in virtually every public procurement challenge in the future, as it contains so many points of interest. They include:

  • Issues around timing of challenges, and use of damages as recompense rather than cancellation of the contract award.
  • Whether it is legitimate to offer "success payments" to witnesses, as in this case. The usual answer is "no" but in this case the judge found it acceptable for particular reasons.
  • The use of "thresholds" in tender evaluation i.e. disqualifying a bidder if they do not reach a particular level on one or more of their responses.
  • The increasing proclivity for courts and judges to go into the detail of marking tenders.
  • Issues around use of audit trail, whether evaluators should keep their own notes, and how decisions are recorded - and related issues around the use eSourcing systems.
  • Whether it is legitimate to go back and change the markings after the evaluation team has met and apparently reached a consensus decision - whether that is done by individuals within the contracting authority or after a review by external lawyers (yes, NDA really did do that!)
  • The need to allow adequate resource and time for the evaluation team to do their job properly.

Phew! We're going to be looking into this in a lot more detail, and will feature detailed analysis on our Public Spend Forum (PSFE) site, but we'll highlight those articles here too. The first is published here on PSFE, when we look particularly at that issue of thresholds - saying that a supplier "will be dis-qualified if they fail to score at least two out of five on this question", for instance.

There is a very important learning point here for all public procurement people, applicable for the smallest contracts as well as the largest, so we suggest you take a look if you are in that sector.

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