1 The Nuclear Decommissioning Authority (NDA) ran a competitive procurement exercise for decommissioning services at 12 nuclear sites, resulting in the award of a 14-year contract for up to £6.2 billion. Through the 'Magnox contract', the NDA aimed to 'do the same for less' and give the contractor a stronger incentive to deliver savings for the taxpayer by replacing the existing cost-plus incentive fee contracts with a target cost incentive fee contract (TCIF). Under TCIF, the contractor's fee goes up if they are able to bring down the total costs of decommissioning, or down if the costs of decommissioning increase. HM Treasury approved the competition and contract award on the basis that the new contract would provide savings of at least 10% (paragraphs 1.3 to 1.6 and Figures 2, 3 and 4).
2 In July 2016, the High Court found that the NDA had wrongly decided the outcome of the procurement process; the NDA agreed to settle claims in March 2017. Energy Solutions, one of the incumbent contractors for the Magnox sites until 2014, unsuccessfully bid for the contract, and subsequently issued legal claims against the NDA for damages. The High Court found that, had the NDA applied its evaluation criteria correctly, the winning bidder, Cavendish Fluor Partnership (CFP), would have been excluded from the competition. It also found that, with respect to record-keeping, the NDA had breached its obligation under public contracting regulations to act in a transparent way. The NDA agreed settlements totalling £97.3 million (paragraphs 1.7 to 1.15, and Figures 6, 7 and 18).