Bechtel Ltd v High Speed Two (HS2) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fraser |
| Judgment Date | 04 March 2021 |
| Neutral Citation | [2021] EWHC 458 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000061 |
| Date | 04 March 2021 |
[2021] EWHC 458 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QB)
Business and Property Courts
Rolls Building
London, EC4A 2NL
THE HONOURABLE Mr Justice Fraser
Case No: HT-2019-000061
Michael Bowsher QC and Ligia Osepciu (instructed by Hogan Lovells LLP) for the Claimant
Sarah Hannaford QC, Simon Taylor and Ben Graff (instructed by Addleshaw Goddard LLP) for the Defendant
Hearing dates: 8, 12, 13, 14, 15, 19, 20, 21, 27, 28 October and 10 and 11 November 2020
Draft distributed to parties 12 February 2021
This judgment is in the following parts.
A: Introduction
| Paragraph number | |
| A: Introduction | 2 |
| B: Confidentiality | 31 |
| C: The Issues | 40 |
| D: The Procurement | 43 |
| E: The Witnesses | 105 |
| F: The Duties upon HS2 and Records | 283 |
| G: Qualifications | 314 |
| H: Limitation | 337 |
| I: The Result of the Competition | 345 |
| J: Abnormally Low Tender | 456 |
| K: Different contract and abandonment | 482 |
| L: Conclusions | 509 |
| Appendix I: Questions challenged and scoring factors | |
| Appendix II: Fee Information — Confidential |
This is a procurement claim brought by Bechtel Ltd (“Bechtel”) against High Speed Two (HS2) Ltd (“HS2”) for breaches of the duties imposed upon HS2 by the Utilities Contracts Regulations 2016 (“UCR 2016”). It is not in dispute that UCR 2016 applied to the procurement competition in question, which was run using the negotiated procedure under Regulation 47 of UCR 2016. HS2 is a very well-known and high-profile infrastructure project to construct a new high-speed railway to connect London with destinations both in the Midlands and the North of England. Phase One is to construct four new stations, and approximately 140 miles of new high-speed rail track, between London and Birmingham. Two of the stations are in the south, and two further north, with the terminus in Birmingham. Journey times by rail between the two cities will fall from 1 hour 21 minutes, to about 50 minutes. Phase Two will then continue the high-speed rail link onwards, north of Birmingham, in the shape of a letter Y, connecting onwards to Manchester, and to Leeds. Some of that phase will use existing track. Once completed, London will be at the base of the letter Y, with Birmingham at the junction before the two limbs go on towards the North East (as far as Leeds) and to the North West (to Manchester).
The trains will run at speeds in excess of 250 mph. As a project, it is very high cost, and the current estimate is somewhat in excess of £100 billion. The duration of the works for Phase One is about 8 years, with Phase Two expected to open about ten more years after that. It has proved to be a controversial project, as major infrastructure projects often are. In 2019 there was a Government review into its future. There are those who strongly support it, those who strongly oppose it for a variety of reasons, and many more somewhere in between those two points of view. Although the project has been controversial for reasons associated with both the total cost, the increase in the originally predicted cost, delay and also its environmental impact, these proceedings are not concerned with any of those very wide issues.
This litigation is much more narrow in scope, and concerns the procurement competition conducted by HS2 to decide which entity should be the Construction Partner (or “CP”) with HS2 for Old Oak Common, one of the two Southern Stations (the other being at Euston in London). There is currently a disused train maintenance depot at Old Oak Common, which was utilised as a construction materials marshalling facility for Crossrail. Old Oak Common is located to the west of London, about 600 metres from Willesden Green. The two Northern Stations for Phase One are to be Curzon Street in Birmingham, and another one to the south of Birmingham, which is to be called simply Interchange. This litigation concerns only Old Oak Common, known as OOC in all the documents. The procurement competition was run separately from, but at the same time as, that for the other Southern Station, Euston. The Euston competition was Lot 1, and that for Old Oak Common was Lot 2. Originally Bechtel was pre-qualified to bid for Lot 1 too, but withdrew from that competition by way of a formal withdrawal on 7 March 2018. The reason for the withdrawal was that Bechtel, having conducted a detailed review of the Invitation to Tender (or “ITT”), decided to concentrate all its collective efforts on its bid for Lot 2. Another bidder, whom it is not necessary to identify, took the same decision in relation to withdrawing from Lot 2 to concentrate upon Lot 1.
Old Oak Common is to be what is called a super-hub station, and will be one of Europe's largest railway stations when it is opened. It is to have 14 platforms, six of which will be high-speed platforms and entirely underground by a depth of 20 metres. The other eight platforms will be on the surface and will interchange with the West Coast Main line, Heathrow Express and Crossrail (now called the Elizabeth line). The West Coast Main line currently goes from London Paddington to Bristol, Plymouth and beyond. All these lines will therefore interchange with HS2 at Old Oak Common.
The station at OOC will also cost a very large amount of money to construct; one of the aims of the HS2 procurement process was to ensure that it could be built for £1.054 billion. This undoubtedly will make it one of the most expensive railway stations ever to be built in Europe, although still somewhat less than the cost of the New York World Trade Centre Transportation Hub in the United States, said to be the most expensive railway station in the world (at a cost of US$4 billion). The budget for Euston is even higher than that for Old Oak Common, and is in excess of £1.5 billion. Both station projects are, evidently, highly complicated and consequently expensive.
Four different bidders tendered to be the Construction Partner to HS2 for Old Oak Common. Although the procurement competition result was separate to that for Euston, some of the post-bid documents featured discussion of both, and some HS2 personnel were involved in both. The competitions were run simultaneously. No bidder could win both competitions, under a feature of the two competitions called the Win One Only Rule (or “WOOR”). As it happened, that rule did not need to be invoked as the winning bidder for each competition was different.
Although at one stage Bechtel had contemplated bidding jointly for Lot 2 with another well-known company, Morgan Sindall, as matters turned out Bechtel bid alone, with Morgan Sindall as its intended sub-contractor.
The evaluation of the different tenders resulted in another bidder being scored higher on the tender for OOC than Bechtel. This winning bidder was a joint venture between Balfour Beatty Group Ltd, Vinci Construction (UK) Ltd, Vinci Construction Grands Projets SAS and Systra Ltd. I shall refer to this consortium as BBVS. More detail on the scoring is provided below, but in overall terms in the procurement evaluation, BBVS scored 75.38% and Bechtel scored 73.76%. Although Bechtel scored higher than BBVS on some areas of the evaluation – these being Technical, Behavioural Assessment, Commercial and Staff Rates – it was substantially outscored by BBVS on the fifth area, Lump Sum Fee. On that one area of the evaluation, which was worth a maximum of 10%, Bechtel scored only 5.76% and BBVS scored 10%, the maximum score for that Question. That score is therefore 4.24% higher than the score Bechtel achieved on this area of the evaluation. Due to the way the ITT was designed, this means that BBVS tendered the lowest Lump Sum Fee of the four bidders, as the maximum score was to be given to the bidder tendering the lowest Lump Sum Fee. Given the overall difference in the total final scores of these two bidders was only 1.62%, it can be seen that the single difference in score on Lump Sum Fee alone, accounts for a considerable difference in the overall scores between Bechtel and BBVS. Bechtel was the bidder that achieved the second highest score overall. In these proceedings Bechtel challenges the outcome of the procurement competition. BBVS is an Interested Party in the litigation but took no part in the trial, given the issues to be tried at this stage of the litigation are essentially those of liability.
Projects of this nature are highly complex. Procurements involving these type of projects are, similarly, highly complex. There are a vast number of different documents and personnel involved in considering, submitting and evaluating a bid for a project such as this one, and putting together a bid of this nature involves a large team of specialist people working in very great detail. Similarly, evaluating such tenders is an arduous task, involving Independent Assessors, Moderators and other personnel. This judgment will not address all the different documents, nor all of the evidence adduced by the many witnesses called by both parties, but only those sufficient to address the issues necessary to resolve the litigation. The most important document (although to refer to it as a single document is potentially misleading, as it has many different volumes and appendices), which governs the procurement competition is the Invitation to Tender or the ITT. This is the document that (amongst other things) sets out the rules of the competition, explains how the tender should be prepared, and gives the scoring methodology....
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