HS2 derailed after CH2M pulls out of £170m contract

The future of the £170m phase two delivery partner contract for HS2 is up in the air after the shock news that CH2M has pulled out of the bidding.

Jacqueline Hinman, CH2M’s chairman and CEO informed HS2 Ltd chair David Higgins today that it was ending its interest in the contract, the Phase 2b Development Partner Contract.

This follows protests over the award of the contract to CH2M from the losing bidder Mace and only last week a spokesman for HS2 Ltd said that the organisation was in talks with one of the bidders and that a statement would be made "in due course".

CH2M was announced as the principal winner of the development partner commission in February, with Mott MacDonald/WSP Joint Venture, AECOM/Capita/INECO JV and Arup winning civils design and environmental support contracts. These were due to be signed after 20 February, but the signing was delayed while HS2 Ltd investigated claims of conflict of interest.

A CH2M spokesperson said: “CH2M today provided formal notice to HS2 Ltd that we are withdrawing our interest in the HS2 Phase 2b contract. CH2M has demonstrated all appropriate measures taken throughout to ensure the integrity of the procurement process. Notwithstanding these efforts, we have taken the decision to alleviate any further delays to this critical national infrastructure project which could ultimately lead to increasing costs to UK taxpayers, as well as to our firm.”

Confirming the news, a HS2 spokesperson said: “CH2M have decided to withdraw from the Phase Two Development Partner bid process, a decision which we welcome.”

According to Building magazine, it is believed that HS2 will now open discussions with Bechtel, the second-placed bidder. Mace, which originally bid in a joint venture with Turner & Townsend, is due to meet with HS2 this Friday to discuss CH2M’s original award. A spokesperson for Mace, who are believed to have hired a top QC to fight their corner, said that their concerns were about HS2’s procurement process and not CH2M but that the ongoing investigation regarding their concerns about conflict of interest had “clearly raised some serious questions about the process”.

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