NDA attacked over Magnox contract

29 April 2014

UPDATE 1: 10.16am, 30 April: Information from NDA
The Nuclear Decommissioning Authority is facing legal action from Energy Solutions, which alleges it did not follow regulations when it awarded a huge decommissioning contract to a rival bidder earlier this year.

Trawsfynydd (Magnox) 460x284
Trawsfynydd nuclear power plant, a twin Magnox plant

At the end of March the Nuclear Decommissioning Authority (NDA) announced that a joint venture by Cavendish Nuclear and Fluor Corp had won the contract to decommission the UK's ten Magnox nuclear power plants, as well as the Harwell and Winfrith research centres. The contract, worth up to £7 billion ($11.7 billion) over 14 years, attracted bids from several firms in various consortia, including Energy Solutions which teamed with Bechtel for the opportunity.

Today a spokesman for Energy Solutions confirmed to World Nuclear News that the company believes the NDA did not follow the UK's Public Procurement Regulations and, as a result, "reached the wrong outcome when awarding the contract." The company has submitted a legal challenge.

The NDA acknowledged the legal action in a statement emailed to Magnox staff and seen by WNN. It said, "The NDA remains confident that the competition process was carried out in a robust manner in compliance with EU guidelines, and the new contract looks set to deliver savings in excess of £1 billion against the previous plan." 

The consortia
Four consortia entered bids to the NDA competition:
• Energy Solutions and Bechtel
• CH2M Hill, Serco and Areva 
• Rolls-Royce, Atkins and Amec
• Cavendish Nuclear and Fluor
Apart from Energy Solutions, none of these companies confirmed today that they intend to contest the competition. NDA said it believed the competition had been robust and in compliance with guidelines.

The NDA began its dialogue with four bidding consortia in January 2013 in a process to select a parent body organisation (PBO) to take control of and decommission ten Magnox sites as well as Harwell and Winfrith. The sites are all owned by the NDA, which uses the PBO system to grant private companies the authority necessary to take charge of nuclear decomissioning. Successful contractors earn a fee that is a portion of the overall contract value, depending on performance.

When Cavendish and Fluor were chosen in March the NDA said the contract had not been finalised and its formal award and transfer of the shares were scheduled to take place on 1 September, after a five-month transition period. The NDA's statement said this schedule "remains on course."

Researched and written
by World Nuclear News