黑洞社区

Interserve has slammed the Ministry of Defence鈥檚 award of more than 拢4bn-worth of construction contracts to a Carillion joint venture, claiming in court papers that the winning bid could be 鈥渁bnormally low鈥� and 鈥渦ndeliverable鈥� and that the competition for the work was
not 鈥渇air鈥�.

As 黑洞社区 first revealed last month, Interserve has launched a legal challenge to the award of three massive Ministry of Defence (MoD) construction contracts, together worth up to 拢4.35bn, to a joint venture between Carillion and Amey in a move that prompted
the MoD to suspend the procurement process.

This week it also emerged that more consultants are preparing legal challenges to the government鈥檚 procurement of a 拢750m public sector consultant鈥檚 framework.

The news of the legal challenges comes as the government this week outlined its progress on improving its procurement at the Government Construction Summit in London, where business secretary Vince Cable, infrastructure minister Lord Deighton and chief construction adviser Peter Hansford debated with industry the steps that need to be taken to deliver on the industry鈥檚 industrial strategy.

Interserve鈥檚 legal challenge, which it has now filed at the Technology and Construction Court, alleges that the winning bids from the Carillion-Amey joint venture for the three Next Generation Estates Contracts (NGEC) 鈥渃ould be abnormally low and/or undeliverable鈥�.

In court papers, seen by 黑洞社区, Interserve claims that the MoD was aware of this but 鈥渇ailed鈥� to investigate, which it says constituted 鈥渁 breach鈥� of the principles set out in the procurement.

Interserve also claims that the MoD 鈥渄id not provide any or any proper information on the characteristics and relative advantages of the winning bidder鈥�, and that despite repeated requests for more detail the MoD only provided 鈥渧ery limited information鈥�.

鈥淣onetheless, it is clear from the limited information provided that the [MoD] was aware that Carillion-Amey鈥檚 tender could be abnormally low and/or undeliverable,鈥� the court papers claim.

Interserve claims that as a result of the MoD鈥檚 鈥渇ailed鈥� procurement process it 鈥渓ost the opportunity to take part in a fair competition and/or win the contract鈥�.

It said it was therefore seeking the contract award decision to be 鈥渟et aside鈥� and that it be awarded compensation for 鈥渓oss and damage, namely the profits on the anticipated contract and/or its wasted bid costs鈥�.

The court papers state that the exact amount of compensation claimed will be set out at a later date, but that across the three contract awards that are being challenged it expects compensation in excess of 拢900,000.

The three NGEC contracts in dispute, which were due to be awarded last month, comprise: the 拢1.8bn Regional Prime Central contract; the 拢1.35bn Regional Prime South-west contract; and the 拢1.2bn Regional Prime South-east contract.

The contracts are for repairs and maintenance work across the defence estate, as well as facilities management and construction projects worth up to 拢3.9m.

Procurement on the contracts began in February 2012, with the shortlisted contractors announced in June 2012.

The legal challenge and delay is the latest in a long line of problems to hit the procurement of the MoD鈥檚 wider suite of NGEC contracts, some of which began procurement nearly four years ago. They were hit by a series of delays as the MoD sought to undertake a massive restructuring programme, as well as contracting a private sector partner to take over the operation of its estate arm the Defence Infrastructure Organisation (DIO).

Carillion, Interserve and the DIO all declined to comment.