EnergySolutions EU Ltd v Nuclear Decommissioning Authority
Jurisdiction | England & Wales |
Judge | Mr Justice Fraser,The Honourable Mr Justice Fraser |
Judgment Date | 29 July 2016 |
Neutral Citation | [2016] EWHC 1988 (TCC) |
Court | Queen's Bench Division (Technology and Construction Court) |
Docket Number | Case No: HT-2014-000053, HT-2014-000094, HT-2015-000163 |
Date | 29 July 2016 |
[2016] EWHC 1988 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Buildings, London, EC4A 1NL
The Honourable Mr Justice Fraser
Case No: HT-2014-000053, HT-2014-000094, HT-2015-000163
John Howell QC, Andrew Hunter QC and Ewan West (instructed by Freshfields Bruckhaus Deringer LLP) for the Claimant
Nigel Giffin QC, Joseph Barrett and Rupert Paines (instructed by Burges Salmon LLP) for the Defendant, together with Mark Hapgood QC for 25 and 26 July 2016
Hearing dates: 16–19, 23–26, and 30 November 2015, 1–3, 7–10, and 16 December 2015, 26–27 January 2016, 23 March 2016, 14, 25 and 26 July 2016
JUDGMENT No.2 (LIABILITY)
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
These proceedings concern the procurement of a very sizeable contract for the decommissioning of 12 different Magnox nuclear facilities in the United Kingdom. The proceedings consist of three claims, each commenced by the entity that was then called Energy Solutions EU Limited (now called Atk Energy EU Limited) as Claimant ("Energy Solutions") against the Nuclear Decommissioning Authority ("NDA"). All three claims concern the same procurement exercise, and have been case-managed and tried together. The NDA is an Executive Non-Departmental Public Body established under the Energy Act 2004, responsible to the Department of Energy and Climate Change. It is tasked with overseeing the clean-up and decommissioning of a number of the United Kingdom's civil public sector nuclear sites, installations and facilities. The NDA has responsibility for 17 different sites, and the associated civil nuclear assets and liabilities that were formerly owned by the United Kingdom Atomic Energy Authority and British Nuclear Fuels Ltd ("BNFL"). All three of the claims issued by Energy Solutions arise out of the same public procurement competition, namely one undertaken by the NDA for the award of a contract central to the decommissioning of 12 of these former nuclear sites. The contract the subject of the procurement was called a Transition Agreement. Assuming certain conditions precedent were complied with, a successful tenderer who was awarded the Transition Agreement would then be awarded another contract called the Parent Body Agreement (or "PBA") about six months after award of the Transition Agreement. The 12 sites in question are the ten nuclear power stations that are called "Magnox" power stations, namely Berkeley, Bradwell, Chapelcross, Dungeness A, Hinkley Point A, Hunterston A, Oldbury, Sizewell A, Trawsfynydd and Wylfa, together with two other sites. These latter two sites, namely those at Harwell and Winfrith, are (or were) nuclear research sites, and not power stations, although one of the reactors at Winfrith did produce some electricity which was supplied to the National Grid for a time. The two research sites both had nuclear reactors. Magnox is the name for a particular type of nuclear reactor which was designed in the UK; these nuclear power plants were built in the 1960s and 1970s. Some of the Magnox reactors were exported abroad but are not relevant for the purposes of these proceedings. Magnox reactors are older nuclear technology and are no longer used in the United Kingdom, although one of the nuclear reactors at Wylfa in Anglesey was operational at the time of the procurement. The other sites were no longer operational by then. The term "Magnox" is taken from the magnesium-aluminium alloy used to clad the fuel rods used by the reactor. Magnox is also the name used for various entities that were previously responsible for the Magnox sites, which is explained further below.
The Contents of this judgment, which is in a number of different parts, are as follows below. There are also five appendices, Appendix 1 being a glossary. Appendix 2 is a graphic. Confidential Appendix 3 contains judgment narrative and findings on the allegations that concern the successful bidder, CFP, and hence material already protected by an existing confidentiality order. This Appendix falls within the wider of the two Confidentiality Rings, namely that which currently includes not only the legal representatives acting for Energy Solutions, but also Mr Bowes and Mr Board, the two employees (now former employees) of Energy Solutions permitted to see certain parts of the CFP bid documents. Appendix 4 contains a summary of the scores that were awarded by the NDA in the evaluation, together with a summary of the adjusted scores for some of the Requirements as a result of findings within this judgment. Confidential Appendix 5 contains salary and bonus details for some of the Energy Solutions' witnesses. These details only became relevant during the NDA's application to dismiss the whole claim at the very end of the trial, in the circumstances explained in Part V of the judgment. The application itself is dealt with in Part XI of the judgment. I do not consider that this judgment needs to make available publicly these personal salary details, which is why they appear in an appendix. Neither Appendix 3 nor Appendix 5 will be made available on www.bailii.org.
Table of Contents
I Introduction
I | Introduction | 3 |
II | Agreed Issues | 25 |
III | Confidentiality | 28 |
IV | The Procurement Competition and the SORR | 31 |
V | The Revelations of July 2016 | 58 |
VI | The Factual Evidence and the Witnesses | 63 |
VII | The AWARD system | 162 |
VIII | The role of Burges Salmon | 190 |
IX | The Regulations and the Legal Principles | 235 |
X | Evaluation of the Tender Submissions | 331 |
A. | Introduction | 332 |
B. | RSS Evaluation Issues | 339 |
B1 | Critical Assets and Key Critical Assets – Nodes 411, 412, 414, 408, 405, 410 | 339 |
B2 | Assumptions to bound scope and cost – Nodes 405, 410, 408 | 484 |
B3 | Common Support Functions and Services – Node 409 | 553 |
B4 | Nominated Staff Appointment – Node 303 | 636 |
B5 | Cost Contingency – Nodes 110, 112, 113 | 725 |
B6 | Portfolio/Programme/Project Management – Node 307 | 753 |
B7 | Supply Chain Management – Node 306 | 802 |
B8 | Other Winfrith Issues – Node 408 | 816 |
C. | CFP Threshold Issues | 849 |
C1 | Principles | 849 |
C2 | Supply Chain Management – Node 306 | 903 |
C3 | Nominated Staff Appointment – Node 303 | 903 |
C4 | Overall Scope Summary – Node 401 | 903 |
C5 | Alternative Strategies Costs – Nodes 116, 117 and 118 | 903 |
C6 | Chapelcross (Sample Project 1) – Node 410 | 903 |
D. | CFP Non-Threshold Evaluation Issues | 903 |
D1 | Cost Underpinning – Node 106 | 903 |
D2 | Sample Project 3 Preparing the fuel storage ponds at the Sizewell A Site for the Sizewell A Interim State – Node 112 | 903 |
D3 | Portfolio/Programme/Project Management – Node 307 | 903 |
D4 | Spent Fuel and Nuclear Materials Management – Node 405 | 903 |
D5 | Asset Management – Node 406 | 903 |
D6 | Sample Project 2 Preparing the reactor building complex for both reactors at the Dungeness Site for the Dungeness Site Interim State – Node 411 | 903 |
XI | The NDA's Application to dismiss the claim | 904 |
XII | Summary of Findings | 941 |
XIII | Conclusion | 943 |
Appendix 1 | Glossary |
Appendix 2 | Graphic: Fences at Winfrith |
Appendix 3 | Confidential: CFP bid |
Appendix 4 | Corrected Scores Summary of Findings |
Appendix 5 | Confidential: Salaries and Bonus Arrangements |
This Introduction is intended as a high level summary. In broad outline terms, the Claimant was part of a consortium with another company, Bechtel Management Company Ltd ("Bechtel"), which submitted a tender to the NDA for the Transition Agreement. Initially there had been a third member involved with Bechtel and Energy Solutions, URS International Holdings (UK) Ltd, as well. URS withdrew from the procurement prior to the submission of the tender, and following this withdrawal Bechtel and Energy Solutions formed a consortium called Reactor Site Solutions ("RSS") for the purposes of the procurement.
That consortium was unsuccessful in the procurement process. The purpose of the procurement was for the NDA to award a contract to the successful tenderer, who would then become what was known as the parent body organisation ("PBO") for two separate Site Licence Companies ("SLCs"). The intention was for the PBO to acquire the two then-existing SLCs by way of transfer of shares in those companies to the PBO. The two SLCs in existence at the time of the procurement were called Magnox Ltd ("Magnox") and Research Sites Restoration Ltd ("RSRL"). Energy Solutions was the incumbent PBO at the time of the procurement for Magnox, which as the name suggests, was the SLC for, and managed and operated, the ten Magnox power stations (but not the two research sites). Energy Solutions had become the incumbent PBO for Magnox by means of the commercial acquisition of a subsidiary of BNFL in 2007. RSRL managed and operated the two research sites of Harwell and Winfrith. The two research sites were, at the time of the procurement, essentially under separate control, and contained within a separate SLC, from the ten Magnox sites.
The then-existing PBO for RSRL was UKAEA Ltd ("UKAEA"). Part of the outcome of the procurement process was to be that the 12 sites would all come together under a single PBO. Energy Solutions was unsuccessful in becoming that PBO. Due to the nature of the subject matter, there are a great number of abbreviations...
To continue reading
Request your trial-
Transcore, LP v The National Roads Authority, Operating Under The Name of Transport Infrastructure Ireland
...in a number of decisions by the High Court of England and Wales such as Energy Solutions EU Ltd. v. Nuclear Decommissioning Authority [2016] EWHC 1988 (Fraser J.) and Bristol Missing Link Ltd. v. Bristol City Council [2015] EWHC 876 (Coulson J.) and by Baker J. in the High Court in Somague ......
-
ENERGYSOLUTIONS EU Ltd v NucLear Decommissioning Authority
...known as Reactor Site Solutions ("RSS"), of which ATK and another company, Bechtel, were members, a score of 85.42%. Fraser J [2016] EWHC 1988 (TCC)found (i) that CFP should have been disqualified from the competition for failing two threshold requirements, and (ii) that, in any event, RSS......
-
Stagecoach East Midlands Trains Ltd and Others v The Secretary of State for Transport
...and, if possible, their relative importance, when they prepare their tenders … .” 34 Applying these principles, in Energysolutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at [255] Fraser J said: “The principles of equal treatment, non-discrimination and transparen......
-
Gosvenor London Ltd v Aygun Aluminium UK Ltd
...circumstances that warrant it. As a single example, in Energysolutions EU Ltd v Nuclear Development Authority (No. 2) (Liability) [2016] EWHC 1988 (TCC), very shortly before the formal handing down of a very lengthy judgment concerned with public procurement, the NDA discovered that every s......
-
What's More Difficult Than Decommissioning Nuclear Reactors? Ten Lessons From The Recent Judgment In Energysolutions EU Limited v Nuclear Decommissioning Authority
...themselves." It would, however, seem from the recent judgment in Energysolutions EU Limited v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC), that procuring the decommissioner might be just as, if not more, difficult. At 324 pages and 948 paragraphs (not including 5 appendices, so......
-
Table of cases
...EU Ltd v Nuclear Decommissioning Authority [2015] EWCA Civ 1262 I.4.67 Energy Solutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) I.3.73, I.4.43, I.4.61, I.4.62, I.4.65, I.4.80, III.26.114, III.26.115 Energy Solutions EU Ltd v Nuclear Decommissioning Authority [2016]......
-
Litigation
...an impact on the weight given to his evidence, but not its admissibility: Energy Solutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at [915]–[936], per Fraser J. See also De Sala v Compañia de Navegación Palomar SA [2018] SGCA 16 at [136]–[140]. LITIGATION state (wi......
-
Contract terms
...but without major repair being necessary”. As to maintenance, see also Energy Solutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at [398], per Fraser J. See, further, Owners – Strata Plan 74602 v Brookield Australia Investments Ltd [2015] NSWSC 1916 at [180]–[208], ......
-
Procurement
...is used in private contracts, as to which see paragraph 4.11. See also Energy Solutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at [240]–[241], per Fraser J. 137 Public Contracts Regulations 2015 (SI 2015/102) regulations 30(1) and (2). he procedure and time limits......