1 Mar (NucNet): The Nuclear Decommissioning Authority (NDA) completely failed in both the procurement and management of a contract to clean up the UK’s Magnox nuclear reactor and research sites, a report by the Public Accounts Committee says.
The report, released on 28 February 2018, says this disrupted an important component of vital nuclear decommissioning work and cost the taxpayer upwards of £122m (€137m, $167m). The £6.2bn contract — one of the largest awarded by the UK government — was to dismantle 12 first-generation Magnox nuclear sites. It was awarded to Cavendish Fluor Partnership, a joint venture between UK-based Babcock International and Fluor of the US.
The committee, which oversees government expenditure, said: “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 £100m.” The committee also said the NDA, a public body established in 2004 to oversee the clean-up of the UK’s nuclear legacy, “drastically under-estimated” the scale of the work needed to decommission the sites at the time it let the contract – a failure which ultimately led to the termination of the Magnox contract nine years early.
The NDA did not have sufficient capability to manage the procurement or the complex process of resolving differences between what the contractor was told to expect on the sites and what it actually found, the committee concluded. 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, the committee said.
The NDA may have further wasted taxpayers’ money by paying its previous contractor for work that was not done. The NDA cannot fully account for £500m of the £2.2bn increase in the cost of the contract between September 2014 and March 2017. In particular, it does not know whether the £500m cost increase was due to its incorrect assumptions about the state of the sites when it let the contract or underperformance by the previous contractor.
The committee said if the NDA 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 taxpayers’ 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.”
According to the committee, central government must also share the blame. Having signed off the NDA’s “needlessly complicated” procurement plan, the government then “failed in its duty to taxpayers as issues emerged and costs grew”.
An independent inquiry examining the contract is under way and both the NDA and central government say they are acting on a number of interim recommendations.
