Energysolutions EU Ltd v Nuclear Decommissioning Authority

In a public procurement challenge, the court’s role is supervisory. It must not re-mark tenders, but may intervene where a contracting authority has made a clear and material error, applied the wrong legal test, misstated material facts, or breached equality and transparency obligations. Evaluative judgment attracts a margin of appreciation; compliance with the published rules does not.

A contracting authority must apply its published criteria consistently and must not inflate a score to avoid the stated consequences of failing a threshold requirement. Clarification must preserve equal treatment and must not solicit new information. Applying these principles, numerous RSS scores were increased, CFP should have been disqualified, and the contract ought to have been awarded to RSS.

Energy Solutions, in a consortium with Bechtel known as Reactor Site Solutions, challenged the Nuclear Decommissioning Authority’s procurement of a long-term contract for decommissioning 12 nuclear sites. The successful bidder was Cavendish Fluor Partnership. Three damages claims concerning the same procurement were tried together.

Earlier preliminary issues were decided by Edwards-Stuart J in [2015] EWHC 73 (TCC) and on appeal by the Court of Appeal in [2015] EWCA Civ 1262. This judgment determined liability issues concerning manifest error, equal treatment, transparency, clarification, threshold requirements and tender scoring. The central question was whether the NDA had lawfully evaluated the RSS and CFP tenders under the Public Contracts Regulations 2006.

1. Supervisory review. The court’s function was not to re-mark the tenders. Under the Public Contracts Regulations 2006, the NDA had to apply the published criteria consistently, treat bidders equally and act transparently. A margin of appreciation applied to evaluative judgment, but not to equality or transparency. An evaluative judgment could itself contain a manifest error.
2. Reasons and clarification. The lawfulness of the award decision was assessed by reference to the reasons communicated before proceedings. Further reasons could be considered on causation. Clarification under regulation 18(26) had to preserve equal treatment and could not be used to obtain new information or favour one bidder.
3. Critical assets and assumptions. Asset criticality had to be assessed using a risk-based approach consistent with good industry practice. The NDA wrongly disregarded probability of failure and mitigation. It also wrongly treated fixed project boundaries, authority assumptions and matters outside a project’s scope as bidder assumptions requiring further explanation.
4. Scoring. The NDA made material errors in numerous RSS evaluations, including critical assets, scope assumptions, competencies, risk tolerance, nominated staff, programme management and fencing at Winfrith. RSS’s corrected score was 91.48%. The NDA also wrongly avoided the mandatory consequences of CFP’s failures under Requirements 306.5.1(j) and 401.5.1(b)(ix); CFP should have been disqualified.
5. Outcome. The Transition Agreement ought to have been awarded to RSS. The NDA’s application to dismiss or strike out the claims, or for a mistrial, was dismissed. The question whether any breach was sufficiently serious to found damages was reserved for a later judgment, and quantum remained to be determined.

The judgment is a first-instance liability decision, but records the following earlier procedural stages:

1. High Court (TCC): Edwards-Stuart J determined preliminary issues in [2015] EWHC 73 (TCC).
2. Court of Appeal: In [2015] EWCA Civ 1262, the court unanimously held that Energy Solutions’ failure to issue proceedings before contract award did not break causation and that damages were not discretionary once loss caused by breach was established.
3. High Court (TCC): The present judgment determined liability, corrected tender scores, held that CFP should have been disqualified and concluded that the contract ought to have been awarded to RSS.