Wednesday saw HS2’s chairman and the secretary of state in front of the transport select committee.
Following the allegations of conflict of interest during the phase two development partner bidding process, chairman of the committee Louise Ellman hauled Sir David Higgins and Chris Grayling in front of the MPs.
The two fielded questions on the organisation’s procurement processes, the decisions behind recruitment and what HS2 does to root out conflicts of interest.
Construction News was down at Portcullis House on Wednesday and here is our breakdown of the five major takeaways from the meeting.
While the £55.7bn project’s commercial services management framework was mentioned only in passing on Wednesday, it offers an interesting comparison to the phase two development contract.
In the case of the CSM framework, procurement was scrapped last month after a change of scope meant HS2 was unable to move forward with the first-placed (Arcadis) and second-placed (Mott MacDonald) bidders for the packages of work due to potential conflicts.
This left Turner & Townsend, the third-placed firm, the only company not conflicted by the scope change. A conflict of interest leading to the first-choice candidate not being selected for the job: where have we heard that before?
In the case of the CSM deal, HS2 said it could not justify to the taxpayer choosing the third-place firm to carry out the work. So should they be doing the same for a second-placed firm in the case of the development partner role?
HS2 will say that Bechtel has the technical capabilities and after helping to deliver Crossrail it definiteely has pedigree.
With a bid that Sir David says was 15 per cent cheaper than Mace’s offer, it could argue they are doing the taxpayer a favour.
Who is the real Chris Reynolds?
After Construction News broke the story about former HS2 chief of staff Chris Reynolds being put forward as CH2M’s programme director for the development partner contract, there has been much speculation over the role he played.
On Wednesday, many of these questions were answered. Mr Reynolds worked as chief of staff to the then chief executive Alison Munro between December 2011 and April 2013.
He then worked for a mixture of CH2M and HS2, having been on secondment to HS2 from CH2M from June 2012 to March 2016 helping with the phase one hybrid bill. This came before working directly for HS2 between April and June last year.
Quite the CV.
It is now clear that Mr Reynolds did have a prominent role in phase one development team, to the extent he wrote a “lessons learned” paper after the work was complete.
However, as Sir David repeatedly stressed, Mr Reynolds “categorically” had no part to play in preparing the tender documents for phase two.
Instead, it seems the potential conflict of interest came down to a four-day window last year where Mr Reynolds worked for CH2M on their bid and could have used material obtained while at HS2 to influence its tender.
There remains no suggestion of any wrongdoing on Mr Reynolds’ part.
Could this be the end of the saga?
There definitely seemed a sense of things coming to a close following the committee.
That was the sense I got speaking to the outgoing chairman of the select committee Ms Ellman, who told me HS2 had given clarity over the issue.
She added that this was a one-off meeting and that the upcoming election would mean HS2 would not be invited to parliament for any further scrutiny until after the election at least. Nevertheless, she didn’t rule out other committees taking another look.
The ball seems now to be in Mace’s court. If the company continues to challenge HS2, there could be some more life in this yet.
If its evidence to the committee seen by Construction News is anything to go by, it feels it has a good case. And if there is a legal challenge, expect the timeframes of the second phase of HS2 to move significantly.
Mr Grayling said that if the delay – currently at two months – stretched to six months, this could have an impact on delivery timeframes.
A legal case followed by a potential retender could see the delivery of phase two pushed back by years rather than months.
Procurement will never be the same again
Whatever happens in the future with the development partner contract, one thing for sure: HS2 has learned a very embarrassing lesson.
Now with its procurement processes firmly under the spotlight, it needs to ensure something like this does not happen again. And it is already taking steps to this end.
Construction News reported this morning that plans are already being drawn up to ensure HS2 has more oversight of bidding teams so it can root out conflicts of interest at the earliest stage possible.
The changes could be game-changing for government clients and will mark a breakaway from putting responsibility for identifying conflict of interest on the bidders.
HS2 is the first to make the change, but with government procurement so squarely under the spotlight at the moment, don’t be surprised if others follow.
Sir David Higgins reads CN
“I think I read it on the Construction News website,” said Sir David when talking about Mr Reynolds involvement in writing up the tender documents for the phase two role.
While it is good to see that Sir David is an avid reader of this publication and has been keeping tabs on our exhaustive coverage, he got his wires crossed.
To be clear, Construction News has never reported that Mr Reynolds wrote or was involved in preparing tender documents for the phase two contract.
In fact, we went as far as to say when we broke the story about Mr Reynolds that, at the time, we did not know whether he was involved.