HS2 procurement blunders have cost us £100m, Bechtel says

Bechtel has said that its chance of winning the £1bn contract to build HS2’s Old Oak Common station was scuppered because of blunders the client made in its procurement process.

It has now gone to court to get the decision reversed and wants HS2 to award it the job instead – or stump up damages as an alternative.

In papers lodged at the Technology and Construction Court earlier this month, the firm says the decision to overlook it has cost it £100m of lost profit and revenue on top of the £3.5m it shelled out making its bid.

The US giant, which was bidding the job on its own, was beaten to the scheme by a team featuring the UK’s biggest contractor Balfour Beatty and French giant Vinci, a joint venture known as BBV.

Bechtel is already working on another part of HS2 – having been brought in two years ago to replace CH2M as the development partner for phase 2b of the scheme after another beaten bidder, Mace, threatened legal action over the procurement process for that deal which was worth £170m.

Bechtel, which pulled out of bidding for the station scheme at Euston, eventually won by a Mace/Dragados team, in order to focus its efforts on Old Oak Common, claims HS2 "ought to have and would have awarded" it the job had the client "conducted the evaluation of tenders for the Lot 2 contract [Old Oak Common station] properly".

It said the BBV tender was “abnormally low” and would have “needed to increase the size of the management team proposed in its bid (and, therefore, its bid price) in order to deliver the Lot 2 contract ‘in a manner that will be safe and aligned to HS2’s wellbeing requirements’”.

Bechtel said HS2 should have rejected the tender from the BBV joint venture, which also includes French engineering firm Systra, on several grounds.

It said HS2 should have scored "major concerns" on a quality question regarding BBV's ability to structure itself to manage the delivery of the contract.

Bechtel said an explanation given by HS2 that it "had very low confidence in the tenderer's [BBV] proposal to manage, deliver and assure the works and in its proposed structure" was a red flag while the client’s reference to an "insufficient sized management team" suggested the JV should have been given a "major concern" score rather than the "concern" score it was eventually awarded.

In the final assessment, Bechtel's bid scored 73.76% overall but it was beaten by the BVV team with a score of 75.38%.

But HS2 said the Balfour team was “a highly experienced consortium which scored higher than Bechtel in a number of areas, including ensuring value for money for the UK taxpayer”.

A spokesperson added: "We are confident that the Construction Partner procurement process was robust.”

He also said in response to the specific charge that the BBV bid was under resourced, HS2 had the ability to adjust the resourcing of the construction partner team prior to contract award.

Other teams to miss out on the Old Oak Common job were a joint venture between Bam Nuttall and Ferrovial and the Mace/Dragados team.

Balfour Beatty and Vinci referred all questions to HS2. Bechtel declined to comment.