2.1 In September 2014, while defending the legal claims against its award of the Magnox contract to Cavendish Fluor Partnership (CFP), the Nuclear Decommissioning Authority (NDA) began the process of contract consolidation. As with previous NDA competitions for parent body organisations (PBOs), this phase was included in the contract because the NDA recognised that the state of the 12 sites, and therefore the nature, scope and cost of the work, could be different from what was expected at the outset of the competition. The NDA expected differences to arise from:
• unavoidable uncertainty about the work required on the sites at the time the contract was tendered. For example, it can be unclear how much waste is contained within part of a site and how radioactive it is until work has begun to retrieve that waste; and
• changes to the sites as the incumbent PBO carried out decommissioning work while the competition was under way.
2.2 During the consolidation phase, the contractor raises requests to change the contract, known as 'change control requests'. The NDA considers these requests and approves or rejects them. The approved changes are then incorporated into the contract and the lifetime plans for the sites.4 This enables the NDA to calculate the fees to be paid to the contractor and to track benefits, including savings, against the agreed contract cost and lifetime plan as the work progresses. Without completing consolidation, the NDA would be unable to agree a final contract programme and target cost. After concluding the consolidation process, the NDA would have been required to submit a revised business case to HM Treasury and the Department for Business, Energy & Industrial Strategy (the Department) for endorsement (if the contract met HM Treasury's 10% savings target) or approval (which was only required if the target was not met). Contractually, CFP was required to complete consolidation by 1 September 2015, 12 months after it was awarded the contract.
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4 The NDA requires site licence companies (SLCs) to develop and maintain lifetime plans that set out the scope of work to be delivered, the schedule for delivery and the estimated costs.