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HS2: Transport secretary dismisses calls for inquiry

The transport secretary has ruled out an inquiry into the procurement of the HS2 phase 2b development partner contract – despite calls from MPs for an independent review.

Speaking in parliament today, Chris Grayling dismissed the calls, saying it was “not a massive misdemeanour” that caused US engineering giant CH2M to pull out of the deal less than two months after being selected for it.

The minister added that it would now be up to the HS2 board to do the right thing in taking the contract forward.

Shadow transport secretary Andy McDonald and Conservative MP for Chesham and Amersham Cheryl Gillan said there was a need for an urgent review of the procurement process for the £170m phase 2b delivery partner role.

CH2M was confirmed as the preferred bidder for the deal last month but the official contract signing, initially expected to take place on 24 February, was delayed so HS2 could address concerns raised by failed bidder Mace over a potential conflict of interest.

The concerns were understood to revolve around the appointment of CH2M highways director Roy Hill as interim chief executive of HS2 – on secondment from the US engineering firm – and the appointment of CH2M European managing director Mark Thurston as its permanent chief executive.

Both appointments came before CH2M was pubicly announced as the preferred supplier for the £170m role.

In the most recent revelations, Construction News revealed that HS2 was understood to be looking into the part played by former HS2 chief of staff Christopher Reynolds in the US engineering giant’s tender for the deal. 

Mr McDonald said the process “stunk to high heaven”.

Ms Gillan said that no further contracts should be issued on the project until a full inquiry had been carried out.

In response, Mr Grayling said he was confident the recruitment process had been carried out fairly and that CH2M had taken the right step in withdrawing.

“I’m clear on this,” Mr Grayling said. “CH2M has done the right thing in taking a step back having identified a problem that would have called into question whether they could or should have carried out this contract.

“This was not a massive misdemeanour, it was an error in the process that has caused them to take a step back, it will now be for the HS2 board and independent directors to make sure that in taking this contract forward they do the right thing.”

It is understood that CH2M would welcome an inquiry into the procurement process for the phase 2b contract.

The US firm told Construction News that it went above and beyond the conflict of interest protocols as set out by HS2.

It added that HS2 was aware of the involvement of Mr Reynolds throughout the bidding process.

A CH2M spokesman said: “As is a matter of public record, HS2 sought clarification from CH2M on a number of areas. CH2M responded to each of these queries in a timely manner.

“HS2 was aware of the involvement of Mr Reynolds throughout the procurement process, as documented in CH2M’s bid, which expressly identified Christopher Reynolds and included quotes from him.

“Mr Reynolds’ appointment to CH2M took place five months after him leaving HS2. Mr Reynolds is a valued member of CH2M staff and brings with him a wealth of technical experience.”

Today Construction News revealed that Mace would be calling for a rerun of the tender process following CH2M’s withdrawal.

Showdown talks are expected between HS2 and Mace tomorrow.

HS2 has previously said that the procurement for the phase 2b deal was the most robust it had carried out and included CH2M enforcing a “Chinese Wall” between its bid team and those already working for HS2.

In a statement yesterday, HS2 said it welcomed CH2M’s decision to pull out of the deal.

HS2 declined to comment on Mr Reynolds.

Readers' comments (1)

  • If there's no inquiry, how can Mr Grayling know that there was "not a massive misdemeanour" (surely an oxymoron), or serious corruption. Perhaps it's not important to him as it's only a white collar crime like tax evasion.

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