The Nuclear Decommissioning Authority’s Magnox contract Contents

Introduction

Between 2012 and 2014, the Nuclear Decommissioning Authority (NDA) ran a procurement exercise for services to decommission 12 sites: two nuclear research sites and 10 Magnox sites. The NDA awarded the 14-year contract to Cavendish Fluor Partnership (CFP). It was then taken to court after Energy Solutions, part of a consortium that bid for the contract but lost, lodged legal claims. After nearly two years of litigation, the High Court ruled that the NDA had wrongly decided the outcome of the procurement process, and the NDA settled legal claims of nearly £100 million.

While defending the legal claims, the NDA was going through a process of consolidation with CFP—a truing up between what the contractor was told to expect at the 12 sites and what it actually found on taking over responsibility for the sites. Contractually, this process had to conclude in 12 months, but it continued unresolved for over two and a half years. During this time, the expected costs of decommissioning the sites increased from £3.8 billion in CFP’s winning bid in 2014 to £6.0 billion in 2017. In March 2017, the NDA decided to terminate the contract with CFP nine years early because there was a “significant mismatch” between the work it specified in the contract and the actual work that needed to be carried out on the sites. The government has commissioned an independent inquiry into these events which is expected to report its findings in early 2018.





27 February 2018