Mace may still sue HS2 after crunch talks flounder

Mace is still considering legal action against HS2 over the controversial bidding process for a £170m role on the megaproject, after crunch talks between the firm and HS2 Ltd ended without agreement on Friday.

Pressure mounted further over the weekend as the chairs of two scrutiny committees of MPs - public accounts and transport - told the Telegraph they were monitoring the issue.

US consultant CH2M - which had been picked by HS2 Ltd as development partner for the second phase of the line branching north of Birmingham to Manchester and Leeds - dramatically walked away from the deal last Wednesday.

CH2M’s decision came after losing bidder Mace raised a series of questions about the process with HS2 Ltd after hiring £650 an hour QC Michael Bowsher, including over alleged conflicts of interest arising from an exchange of senior staff between the two organisations.

A source close to Mace claimed HS2 “seem dead set on defending a seriously flawed process”.

Mace wants HS2 Ltd to re-run the tender process. However, HS2 Ltd’s preference is to award the deal to second-placed bidder Bechtel, potentially as early as this month, to avoid further delays to the project.

A Mace spokesperson said: “We continue to look closely at our options, and remain hopeful that HS2 will come to their senses…

“In 26 years of working on some of the most iconic projects around the UK and the world, we have never yet taken a case to the High Court, and would not take any decision lightly.”

Building reported on Friday that QC Michael Bowsher told senior Mace figures that HS2 has a case to answer over its handling of the process for a £170m contract on the second phase of the rail link.

Mace has alleged there were conflicts of interest after HS2 Ltd, which is responsible for building the network, appointed CH2M European managing director Mark Thurston as its new chief executive earlier this month. He replaced interim Roy Hill, who was himself seconded to the client from CH2M, while another senior figure at HS2, its former interim chief of staff Christopher Reynolds, who spent five years at HS2, joined CH2M last year in a technical support role.

But Mace has said it has other concerns beyond this, with a spokesperson confirming last week: “It’s important to note that conflicts of interest was only ever one element of our concerns.”

A HS2 spokesperson said: “We have no plan to re-run the contest and have started discussion with the second-placed bidder - Bechtel… Our chairman, David Higgins, would be happy to answer questions in front of any relevant parliamentary committee.”

Meanwhile in its statement last week, CH2M, which has its London office in Hammersmith, said HS2 were “aware of the involvement of Mr Reynolds throughout the procurement process, as documented in CH2M’s bid, which expressly identified Christopher Reynolds and included quotes from him”.

It added: “CH2M is clear that it went above and beyond the conflict of interest protocols, as set out by HS2 Ltd.”

A source close to CH2M said the firm had not been put under pressure from Whitehall to back out of the deal. “There was zero contact between the Department for Transport and CH2M.”

CH2M, which is carrying out a similar role on the first phase of HS2, is believed to have withdrawn from the bid after deciding sticking with it no longer made commercial sense. “They took the commercial decision they didn’t want to be dragged along with this anymore.”