Siemens Mobility Ltd v High Speed Two (HS2) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 06 November 2023 |
| Neutral Citation | [2023] EWHC 2768 (TCC) |
| Court | King's Bench Division (Technology and Construction Court) |
| Docket Number | Case No. HT-2021-000231 Case No. HT-2021-000391 Case No. HT-2021-000399 Case No. HT-2021-000424 Case No. HT-2021-000434 Case No. HT-2022-000168 Case No. HT-2022-000281 Case No. HT-2022-000350 Case No. HT-2022-000466 Claim No: CO/3119/2021 Claim No: CO/3523/2021 Claim No: CO/3897/2021 Claim No: CO/1729/2022 Claim No: CO/2971/2022 Claim No: CO/3470/2022 Claim No: CO/7/2023 |
and
[2023] EWHC 2768 (TCC)
Mrs Justice O'Farrell DBE
Case No. HT-2021-000231
Case No. HT-2021-000344
Case No. HT-2021-000391
Case No. HT-2021-000399
Case No. HT-2021-000424
Case No. HT-2021-000434
Case No. HT-2022-000168
Case No. HT-2022-000281
Case No. HT-2022-000350
Case No. HT-2022-000466
Claim No: CO/3119/2021
Claim No: CO/3523/2021
Claim No: CO/3897/2021
Claim No: CO/1729/2022
Claim No: CO/2971/2022
Claim No: CO/3470/2022
Claim No: CO/7/2023
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Fionnuala McCredie KC, Ewan West, Fiona Banks, Alex Littlewood & John Steel (instructed by Osborne Clarke LLP) for the Claimant
Sarah Hannaford KC, Simon Taylor, Ben Graff & Tom Walker (instructed by Herbert Smith Freehills LLP) for the Defendant
Azeem Suterwalla (instructed by Allen & Overy LLP) for the Interested Parties
Reading dates: 16 th & 17 th November 2022
Hearing dates: 21 st, 22 nd, 23 rd, 24 th, 25 th, 28 th, 29 th, 30 th November 2022
st, 5th, 6th, 7th, 8th, 19th December 2022
rd January 2023, 14th March 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Monday 6 th November 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives
Mrs Justice O'Farrell DBEINDEX
Mrs Justice O'FarrellIntroduction
| 1. | Introduction | Para 1–11 |
| 2. | The Procurement | Para 12 |
| PQP | 13–16 | |
| The ITT | 17–38 | |
| Tender Evaluation | 39–53 | |
| Review Panels | 54–60 | |
| Progress of the Procurement | 61–80 | |
| 3. | The Proceedings | Para 81–107 |
| The Issues | 108–109 | |
| Evidence | 110–111 | |
| 4. | The UCR | Para 112–132 |
| 5. | Issue 1- Scoring Challenge to stages 2–3 | Para 133–134 |
| Legal Principles | 135–146 | |
| ID 2.2.6 C2- Pantograph | 147–153 | |
| ID 2.2.7 C1- Energy Consumption | 154–160 | |
| ID 2.2.21 C1- Platform Train Interface (“PTI”) Dimensions | 161–169 | |
| ID 2.2.21 C2- PTI Dimensions | 170–177 | |
| ID 2.2.21 C3- PTI Dimensions | 178–189 | |
| ID 2.2.22 C1 & C2- Design Challenge 1 (PTI) | 190–201 | |
| ID 2.2.23 C3- Dwell Time | 202–226 | |
| ID 2.2.30 C2- Pass-by-noise | 227–234 | |
| ID 2.3.36 C3- Reliability | 235–244 | |
| ID 2.2.39 C4- Command, Control and Signalling (CCS) | 245–257 | |
| ID 2.2.41 C2- Coupling | 258–267 | |
| DP 1.1 C1- Project Management Sub-Plan | 268–274 | |
| DP 1.1 C4- Project Management Sub-Plan | 275–281 | |
| DP 1.2 C3- Project Programme | 282–289 | |
| DP 1.3.1 C7- Design Development | 290–297 | |
| DP 1.3.2 C6- Operation Functionality | 298–305 | |
| DP 1.3.5 C1- Approvals | 306–313 | |
| DP 1.3.5 C2- Approvals | 314–321 | |
| Stage 2.3 C6- Maintenance Technical Plan | 322–330 | |
| DP 1.3.5 C3- Approvals | 331–338 | |
| DP 1.3.7 C4- Noise | 339–346 | |
| DP 3.1 C2- Maintenance Deliverability | 347–355 | |
| DP 3.2 C1- Mobilisation Plan for TSA | 356–363 | |
| DP 3.4 C4- Refinement of Maintenance Plan | 364–372 | |
| DP 3.5 C5- Fit Out Works | 373–380 | |
| Conclusion on Scoring Challenges | 381–384 | |
| 6. | Issue 2- Shortfall Tender Decision | Para 385–386 |
| DP 1.5- Testing Sub-Plan | 387–399 | |
| Section 6.4 of the IfT | 400–401 | |
| Review Panel 1 (RP1) | 402–413 | |
| Siemens' Allegations | 414 | |
| Exercise of Discretion | 415–416 | |
| Ground (i)- Deliverability Risk | 417–427 | |
| Ground (ii) The JV's Overall Performance | 428–429 | |
| Ground (iii)- Other Tenders | 430–431 | |
| Ground (iv)- Other Projects | 432–433 | |
| Ground (v)- Improved Bid | 434–435 | |
| Ground (vi)- Risk of Single Tender | 436–437 | |
| Conclusion on Shortfall Tender | 438–443 | |
| 7. Issue 3- Change of Control Consent | Para 444–445 | |
| ITT Rules on Change of Circumstance | 446–452 | |
| Material Facts | 453–477 | |
| Siemens' Allegations | 478 | |
| Notification Under Section 15.7.2 | 479–489 | |
| Disclosure of Tender Status | 490–499 | |
| Informal Method of Communication | 500–506 | |
| Material Changes to Bombardier's Circumstances | 507–508 | |
| Conclusion on Change Consent | 509 | |
| 8. Issue 4- Stage 5 Evaluation | Para 510–512 | |
| Power to Seek Clarification | 513–516 | |
| Stage 5 assessment | 517–524 | |
| Allegation (i) Modifications | 525–526 | |
| Allegation (ii) JV's Past Performance | 527–528 | |
| Allegation (iii) Maintenance Costs | 529–530 | |
| Allegation (iv) Stages 2–4 Scores | 531–532 | |
| Allegation (v) Daily Unit Service Charge | 533–538 | |
| Allegation (vi) Option Units | 539–542 | |
| Allegation (vii) Appendices | 543–548 | |
| Allegation (viii) Reasons | 549–550 | |
| Allegation (ix) Alias Names | 551–552 | |
| Allegation (x) Heavy Maintenance/Overhaul Analysis | 553–554 | |
| Conclusion on Stage 5 Evaluation | 555 | |
| 9. Issue 5- Abnormally Low Tender Review | Para 556–557 | |
| Applicable Test | 558–559 | |
| Abnormally Low Tender Review | 560–564 | |
| Siemens 'Allegations | 565 | |
| Discussion and Conclusion | 566–571 | |
| 10. Issue 6- Verification Prior to Negotiation | Para 572–588 | |
| 11. Issue 7- Pre- Contract Checks | Para 589–590 | |
| Pre-Contract Checks | 591–610 | |
| Siemens' Allegations | 611 | |
| Improper Purpose | 612–617 | |
| Reconsideration of the PQP and ITT Requirements | 618–619 | |
| Economic and Financial Resilience | 620–627 | |
| Technical Checks | 628–642 | |
| Conclusion on Pre-Contract Checks | 643 | |
| 12. Issue 8- Modifications | Para 644–645 | |
| TTS 94 and TTS 161 | 646–651 | |
| Journey Time Issue | 652–663 | |
| PCN 1 and PCN 2 | 664–668 | |
| Modification Decision | 669–677 | |
| Inevitability of Modification Decision | 678–684 | |
| Prohibitory Order | 685–691 | |
| 13. | Issue 9- Conflict of Interest (Claims 7 and 8) | Para 692–693 |
| Material Circumstances | 694–722 | |
| Pleaded Case on Claim 7 & 8 | 723–725 | |
| Issues raised by Claims 7 & 8 | 726 | |
| Limitation | 727–746 | |
| Conflict of Interest | 747–760 | |
| Steps to identify, manage or remedy any conflict of interest | 761–765 | |
| Impact | 766–767 | |
| Conclusion on Claims 7 & 8 | 768 | |
| 14. Issue 10- Conflict of Interest (Claims 9) | Para 769–770 | |
| Material Circumstances | 771–774 | |
| Pleaded case in Claim 9 | 775–776 | |
| The Applications | 777–780 | |
| The Applicable Test | 781–784 | |
| Limitation | 785–792 | |
| Abuse of Process | 793–804 | |
| Conflict of Interest | 805–814 | |
| 15. | Issue 11- Other Breaches- Adequacy of Reasons | Para 815–821 |
| 16. | Issue 12- Judicial Review Claims | Para 822–829 |
| 17. | Conclusions | Para 830–831 |
These proceedings concern a challenge by the claimant (“Siemens”) in respect of a procurement exercise (“the Procurement”) carried out by the defendant (“HS2”) under the Utilities Contracts Regulations 2016 (“the UCR”), relating to: (i) a manufacture and supply agreement for a minimum fleet of 54 rolling stock units for the HS2 rail project (“the MSA”); and (ii) a train maintenance and services agreement (“the TSA”) for a minimum period of 12 years with optional extensions over the life of the rolling stock (together referred to as “the Contract”).
The Procurement was commenced on 21 April 2017 by a notice published in the Official Journal of the European Union, stating that the value of the proposed Contract was estimated at £2.75 billion and would be conducted using the negotiated procedure in regulation 47 of the UCR.
Following pre-qualification, there were five stages of evaluation to identify the lead tenderer:
i) Stage 1 comprised the submission of the tender, including a declaration that the bid complied with the mandatory Train Technical Specifications (“the TTS”).
ii) Stage 2 comprised three scored elements: Stage 2.1 – levels of compliance with the TTS; Stage 2.2 – deliverability of the trains to the stated TTS; and Stage 2.3 – the maintenance technical plan response.
iii) Stage 3 concerned assessment of three delivery plans: DP1 – train design, manufacture and acceptance; DP2 – responsible procurement; and DP3 – train service and whole life performance.
iv) Stage 4 concerned assessment of the deliverability of DP4 – benefits realisation (skills, employment and education, and supply chain strategy).
v) Stage 5 comprised evaluation of the whole life value (“WLV”) of the bids and determination of the ‘Assessed Price’.
At the end of Stage 4, the scored elements of the components in Stages 2 to 4 were used to calculate an overall classification and evaluation rating for each tenderer. In order to proceed to Stage 5, it was necessary for the tenderers to meet the defined evaluation threshold for each component; alternatively, if any tenderer failed to meet the threshold (a ‘Shortfall Tender’), to be deemed to meet the threshold by HS2's exercise of discretion.
Siemens met the evaluation threshold for each component. A joint venture (“the JV”), comprising Bombardier Transportation UK Limited (“Bombardier”) and Hitachi Rail Limited (“Hitachi”), failed to meet the evaluation threshold in respect of one component, DP1.5, but was deemed to meet the evaluation threshold as a Shortfall Tender. Accordingly, Siemens and the JV proceeded to Stage 5 of the competition.
On 31 March 2021 HS2 approved the JV as lead tenderer, on the basis that the JV's Assessed Price was substantially lower than Siemens' Assessed Price. On 21 May 2021 HS2 informed the tenderers of that the JV was the lead tenderer.
On 29 October 2021 HS2 notified Siemens that it had decided to award the contract to the JV (“the Contract Award...
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