Procurement processes at the Nuclear Decommissioning Authority (NDA) have been heavily criticised by MPs.
In a report, the Public Accounts Committee (PAC) said an “overly complex and opaque” process had resulted in a contract to clean up nuclear sites being awarded to the “wrong bidder” – Cavendish Fluor Partnership (CFP) – and the payment of £100m to settle legal claims from a losing consortium.
MPs said the evaluation process had more than 700 criteria and the NDA could not confirm whether it had complied with legal advice on the process, saying evaluators believed they had the “leeway to change bidders’ scores against evaluation criteria”.
The report said the High Court found evaluators were aware CFP would have been excluded from the competition but they had “manipulated the evaluation to avoid that outcome”.
“These failures occurred despite six internal and external assurance and audit reviews of the process,” said the report. “These reviews only scrutinised parts of the process because the NDA had deliberately limited access to the evaluation proceedings to help ensure that bidders remained anonymous.”
The PAC said in 2014 the NDA “decided to rid itself of the vital post of commercial director despite a cross-government review of the management of major contracts that supported the expansion of the scope of the commercial director role”.
The report said the NDA “dramatically underestimated the scale and cost of decommissioning the Magnox sites” with CFP submitting nearly 100 requests to change the contract, resulting in costs increasing from £3.8bn in 2014 to £6bn in 2017. This led to the contract being terminated nine years early. MPs said the NDA may have overpaid its previous contractor by £500m for work that was not done.
The PAC also criticised oversight of the NDA’s work, with the Treasury and the Department of Business, Energy and Industrial Strategy approving the NDA’s approach to procurement and contract management.
Geoffrey Clifton-Brown, Conservative MP and committee deputy chair, said: “The NDA is entrusted with some of the most important work affecting health and safety matters in the nuclear industry but this sorry affair casts serious doubt on its ability to perform its role effectively.
“From the design and execution of the procurement process onwards, the handling of the Magnox contract has been an appalling piece of mismanagement and financial waste.
“It is wholly unacceptable that some details of what took place should remain so murky – not least the NDA’s inability to fully account for some £500 million of taxpayers’ money paid to its previous contractor.
“An independent inquiry examining the Magnox contract is under way and both the NDA and central government say they are acting on its interim recommendations.
“Given the scale and implications of the failings set out in our report, we are not prepared simply to take their word for it. In the coming months we expect to be shown concrete evidence of the progress being made.”
In a statement the NDA said: “We will study the committee’s recommendations and those to come from the Holliday Inquiry, and have already taken significant steps to address the issues arising from the Magnox competition and contract.
“We are committed to learning from the mistakes made, implement any necessary improvements and continue to focus on the important work of cleaning up the UK’s nuclear legacy.”
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