UK Court Rules Against Bechtel in High-Speed Rail Contract Dispute
Bechtel says it should have won contract for planned $1.4B station. Rendering courtesy of HS2 Ltd.
The U.K. subsidiary of Bechtel Inc. has lost its legal challenge against the owner of the U.K. London-Birmingham high-speed railroad project, HS2, over its failed bid for a roughly $140-million Construction Partner (CP) contract in early 2019.
The program management contract to build London’s estimated $1.4-billion Old Oak Common railroad station, destined to be one of Europe’s largest, was won by a rival largely because of its lower lump-sum fee requirement.
A High Court ruling recently confirmed the CP contract award by HS2 Ltd. to the BBVS joint venture—comprised of U.K.-based Balfour Beatty Group Ltd., with French-owned companies VINCI Construction (U.K.) Ltd., Vinci Construction Grands Projets SAS and Systra Ltd.
Bechtel launched its legal challenge soon after learning of its failure to win the contact in February 2019, triggering an automatic suspension of the award. That August, the company agreed to have the suspension lifted, allowing HS2 to sign the contract with BBVS, according to court documents.
However, Bechtel went on to claim compensation and “a declaration of ineffectiveness in respect of that contract.” The level of compensation was to be agreed upon later.
Bechtel essentially claimed that HS2 had incorrectly evaluated the two bids and that the firm should have won the contract. It argued that its rival's offer lacked adequate resources to ensure “practical achievability” of the project aims.
Bechtel rated higher than BBVS in some categories, such as technical, but BBVS scored 75.38% on price vs. Bechtel’s 73.76% score, according to the court. On price, BBVS also achieved the highest possible evaluation score of 10% to Bechtel’s 5.76%.
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Considering all issues raised by the litigation, the judge ruled that “BBVS would still have been the winning bidder, and Bechtel’s claims in these proceedings all fail.”
On the question of the adequacy of BBVS resources, the judge considered Bechtel's approach to be “akin to having the entire scoring methodology changed, so that an inadequate answer on one question would have a disproportionate effect upon the scoring of all the other [technical evaluation] questions.”
Expressing disappointment at the ruling, a Bechtel spokeswoman commented: “We brought this case because we believed the ‘practical achievability’ of a bid was central to its evaluation.” She added: “We will continue to press for fundamental reform to how major projects are procured.”
At Old Oak Common, BBVS is teamed with the owner and designers to coordinate station delivery, including links with the London Underground metro system and other rail services. BBVS took possession of the 14-platform site last July. Six station platforms will be for high-speed trains.
On the larger $2.1-billion central London Euston terminal, 7.2 km to the south, the Anglo-Spanish joint venture of Mace Ltd. and Dragados S.A. won the CP contract in March 2019. Bechtel had pre-qualified also for that contract but pulled out to focus on Old Oak Common.-
