1. The project incurred extra costs of some £10 million, plus a delay of five years or more. The Department too readily assumed that the winning bidder would be able to meet the exceptionally demanding specification for this state-of-the-art scientific facility. Public sector clients should always satisfy themselves that contractors have the technical and financial capacity to handle the degree of project risk which they undertake to bear.
2. The long delay in completing the project obliged leading UK scientists to pursue their research in seriously outmoded facilities. Through improvisation and ingenuity, they were able to continue their work, but it must be regretted that they were placed in this position by shortcomings in the Department's procurement strategy for the new facilities.
3. The Department received only ten expressions of interest in response to its initial advertisement of the procurement, and two of the four bidders short-listed for the contract withdrew shortly thereafter. As a consequence, the Department had only limited scope to use competition to encourage Laser to improve its design. Before short-listing bidders, departments need to gauge the strength of the interest in their projects and reformulate projects if there is not sufficient interest to provide strong competition in the procurement.
4. The bid submitted by one of the two remaining bidders was weakened by the Department's concerns that the bidder's proposals for exploiting surplus land might not be acceptable to the planning authority. Departments should satisfy themselves that bidders can meet the principal requirements of the project before considering the potential benefits from secondary opportunities.
5. Although it had concerns about the bidders' design, the Department expected the financial consequences of failure to discipline the prospective contractor into taking corrective action. If departments have concerns about bidders' designs, they need to satisfy themselves that bidders have addressed these concerns before placing contracts. For particularly challenging projects, departments should require bidders to demonstrate that their designs will work before the award of contract, for example by constructing prototypes of their designs. The highly technical nature of this project means that the Department should have consulted the scientists affected more closely.
6. Following contract award, the Department became aware that John Laing Construction Ltd modified its design without first confirming that the result would meet the Department's objectives. The Department was reluctant to insist on changes for fear of taking on responsibility for the design. Departments should require bidders and contractors to notify them of significant changes of design, and demonstrate that amended designs will continue to meet the required specification.
7. The Department retained use of the existing facilities at the NPL while the new buildings were being constructed. As a result, the NPL was able to continue its scientific work despite the delays in construction, and the Department was not under pressure to compromise on quality requirements in order to gain use of the new buildings quickly. Departments should plan standby arrangements so that if there are delays to projects they can maintain business continuity without compromising their requirements.
8. The project lenders did not exercise their step-in rights to save the project because they did not want to take on the responsibility of solving the problems with the design. Treasury guidance recommends the provision of such rights to provide an opportunity for lenders to revive projects whilst avoiding the disruption of termination. Departments should be aware that project lenders are unlikely to exercise their step-in rights unless they consider it in their interests to do so.