HS2 Ltd accused of accepting ‘abnormally low’ bid for station contract

High Court papers obtained by New Civil Engineer reveal that Bechtel believes that HS2 Ltd had “clearly reached a conclusion” that the tender submitted by a joint venture (JV) between Balfour Beatty Group, Vinci Construction and Systra (BBVS) “was severely under-resourced and posed a real risk to the safe and timely completion and handover of Old Oak Common Station”.

In addition, it claims that HS2 Ltd should have identified the BBVS tender as appearing to be “abnormally low” and should have excluded it from the bid race on that basis.

But HS2 Ltd has hit back, denying the allegations made by Bechtel, saying it has the power to adjust the resourcing of the winning tenderer prior to contract award. In particular it says that there is no basis for identifying BBVS’ tender as abnormally low.

Bechtel lodged a High Court claim against HS2 Ltd after losing out on the £1bn contract to build Old Oak Common station in west London.

Winning bidders for the stations at Old Oak Common and Euston were announced by HS2 Ltd in early February. A Mace/ Dragados JV has since signed the contract for the Euston job, but the Old Oak Common contract remains in a stand-still period while Bechtel’s challenge is open.

HS2 Ltd took the unusual step of sharing its evaluation of individual and competing bids with all tenderers when announcing the winning bids.

In particular, Bechtel’s claim centres around a question about how BBVS will structure its organisation to manage and deliver the Old Oak Common contract. Bidders were required to provide organisation charts to demonstrate management capability; and to give assurance on delivery, as well as provide a completed management resource plan.

In bid evaluation feedback forms – quoted in Bechtel’s claim – HS2 Ltd expressed “low confidence in the tenderer’s [BBVS’s] proposal to manage, deliver and assure the works”.

HS2 Ltd’s feedback forms also raise “concerns in relation to level of resource proposed” and conclude that “the [BBVS] consortium will be unable to effectively manage the works as a united team”.

This, Bechtel claims, proves that BBVS “would not be able to perform the [Old Oak Common] contract ‘according to the conditions offered’”.

Bechtel believes that “were it not for the breaches identified” then it “would have had a real chance of being awarded” the contract.

“Had [HS2 Ltd] conducted the evaluation of tenders […] properly […] it ought to have and would have awarded the [Old Oak Common] contract to [Bechtel],” the claim states.

HS2 Ltd’s official defence document submitted to the court denies “each and every allegation” in Bechtel’s claim. 

It adds that while Bechtel’s bid scored higher than BBVS in terms of quality, it “scored significantly lower on price”.

Consequently, it added that “had [Bechtel’s] bid been ranked first after the scoring […] it is highly likely that either [Bechtel’s] bid would have been declared unacceptable and disqualified […] or a further round of bidding would have been required.”

HS2 Ltd’s defence adds that its initial concern about resources “was based on a misunderstanding of BBVS’ month one resource proposal”.

An HS2 spokesperson added: “The arrival of HS2 will transform Old Oak Common, unlocking the opportunity for thousands of new jobs and homes around, what will be, one of the best connected railway stations in the UK. Our early works contractors are currently hard at work, clearing the huge site and preparing for the start of station construction.

“The first-placed tenderer in the procurement for the construction partner contract at Old Oak Common is a highly experienced consortium of Balfour Beatty, Vinci and Systra, which scored higher than Bechtel in a number of areas, including ensuring value for money for the UK taxpayer. We are confident that the construction partner procurement process was robust, and we hope to resolve this issue as soon as possible.”

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