The United Kingdom on Monday announced the early termination of the 2014 contract for management and decommissioning of its 12 Magnox nuclear sites, and an over $120 million settlement with two companies that partnered on an unsuccessful bid for the work.
The planned £6.1 billion ($7.7 billion) contract to the Cavendish Fluor Partnership will expire in September 2019 rather than the previously scheduled 2028, according to a statement to Parliament from Greg Clark, secretary of state for business, energy, and industrial strategy.
The problem was not the contractor, a partnership of U.K.-based Cavendish Nuclear and U.S.-based Fluor, but rather that much more work must be done to decommission the plants than is covered in the contract, Clark said. For example, the amount of asbestos to be removed from the facilities is much greater than previously thought, NDA spokesman Bill Hamilton said Monday.
The updated workload represents a “material change” to the scope of the project on which companies bid, Clark said. Simply paying more money to Cavendish Fluor under its current contract would invite additional lawsuits from other bidders, according to Hamilton.
The NDA has also agreed to pay settlements of £85 million ($106.8 million) to EnergySolutions and £12.5 million ($15.7 million) to Bechtel, which had partnered on the Magnox bid as Reactor Site Solutions. EnergySolutions sued after the contract award, claiming unfair scoring by NDA in the evaluation of the bids. The British High Court agreed in July 2016, and Bechtel subsequently filed its own lawsuit.
Clark said the settlement involves no admission of wrongdoing, but that NDA’s legal fees might have grown significantly if it had continued to appeal the High Court ruling. “This was a defective procurement, with significant financial consequences, and I am determined that the reasons for it should be exposed and understood; that those responsible should properly be held to account; and that it should never happen again,” he said.
