黑洞社区

Carillion鈥檚 joint venture with Amey was confirmed as the winner of three massive Ministry of Defence construction contracts after a legal challenge lodged by losing bidder Interserve to the contract award was dropped before it was heard in the High Court.

a joint venture between Carillion and Amey was awarded three Next Generation Estates Contracts (NGEC), which together are worth up to 拢2.8bn.

But that contract award was challenged in the High Court by losing bidder Interserve, which that Carillion-Amey鈥檚 bid was 鈥渁bnormally low鈥�, 鈥渦ndeliverable鈥� and that the competition for the work was not 鈥渇air鈥�.

However, it is understood the case was dropped earlier this month, before it was heard in the High Court.

An Interserve spokesman said: 鈥淭he legal challenge was resolved amicably between both parties.鈥�

The legal challenge had prompted the Ministry of Defence鈥檚 estate arm, the Defence Infrastructure Organisation (DIO), to suspend the contract award process.

But last week, : the 拢435m Regional Prime Central contract; the 拢265m Regional Prime South-west contract; and the 拢258m Regional Prime South-east contract.

The contracts are for five years, with the possibility of a five year extension and can rise up to 50% above the tender value depending on how much work is added to the programme - bringing the total value close to 拢1.4bn over five years and up to 拢2.8bn over 10 years.

However, this is significantly lower than the price stated in the original contract notice, which valued the three construction contracts up to 拢4.35bn (see box below).

In its defence, filed at the High Court and seen by 黑洞社区, the DIO denied Interserve鈥檚 claims, saying that during the contract award process it was 鈥渁ssured as to the deliverability of Carillion-Amey鈥檚 tenders at the prices indicated鈥�.

鈥淭here was no basis upon which the defendant could have rejected Carillion-Amey鈥檚 tender as being abnormally low,鈥� the defence added.

The DIO鈥檚 defence added that Interserve鈥檚 bid was placed third in each of the contract races, and even had the Carillion-Amey bid been excluded, then Interserve 鈥渨ould still only have ranked second鈥�.

The DIO this week declined to comment on the detail of the contract values or on Interserve鈥檚 legal challenge, other than to confirmed that the legal proceedings had 鈥渃oncluded鈥�.

The latest three contract wins brings to five the number of NGEC contracts won by the Carillion-Amey JV after the firms won the Regional Prime Scotland and Northern Ireland and the National Prime Housing contracts earlier this year. The total value of the five contracts could be as much as 拢4.5bn.

Carillion chief executive Richard Howson, said: 鈥淸The] DIO set industry the challenge of providing added value to the military estate and by awarding us these five contracts providing UK wide coverage the offers we submitted have been recognised as generating demonstrable benefits.鈥�

Mel Ewell, Amey chief executive, said: 鈥淭his recent win allows us to add value by expanding the service, as well as sharing best practice and driving efficient ways of working across the defence estate.鈥�