The Nuclear Decommissioning Authority’s Magnox contract Contents


The Nuclear Decommissioning Authority (NDA) completely failed in both the procurement and management of the contract to clean up the Magnox nuclear reactor sites—one of the highest value and most important contracts let by Government. Not only did this disrupt an important component of vital nuclear decommissioning work, but it also cost the taxpayer upwards of £122 million.

The NDA ran an overly complex procurement process, resulting in it awarding the contract to the wrong bidder, and subsequently settling legal claims from a losing consortium to the tune of nearly £100 million. The NDA also drastically under-estimated the scale of the work needed to decommission the sites at the time it let the contract—another failure which ultimately led to the termination of the Magnox contract 9 years early. The NDA will now have to spend even more effort and money to find a suitable way of managing these sites after the contract comes to an official end in September 2019. If it is to be trusted with letting future contracts to clean up nuclear sites, it must have a proper understanding of the state of the sites before committing taxpayer’s money to a contract, and then it must also monitor progress closely.

These failures have caused untold reputational damage to the NDA and raise serious questions about its credibility as a strategic contracting authority. But central government must also share the blame. Not only did HM Treasury and the Department approve the NDA’s approaches to procurement and contract management, but there are clear failings in the Department’s subsequent challenge and oversight of the NDA, through UK Government Investments.

27 February 2018