Monday 27 February 2017 1:08 pm

HS2 delays controversial contract award to CH2M as it meets Mace for talks

HS2 will meet Mace for talks after the construction company lost out on a £170m contract for work on the £55.7bn rail project and has been mulling a legal challenge as a result.

The government-owned developer HS2 Ltd has now delayed the formal award of the contract, while it meets Mace for talks. These are expected to take place this week though HS2 said a date hasn't yet been set.

Earlier this month it was announced that the British firm, which pitched alongside Turner & Townsend in a joint venture, was beaten to a contract to work on the second phase of the HS2 route, by American company CH2M.

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The contract award has stirred up controversy after HS2 appointed CH2M managing director for Europe Mark Thurston as its new boss last month, causing questions over a potential conflict of interest and a "revolving door" between the operations.

Thurston replaced Roy Hill, who was seconded from CH2M too. The appointment was followed by new figures that showed CH2M has been receiving escalating payments from HS2 over the past four years

For 2011/2012, it was paid £1.4m; this had jumped to £32.5m for 2015/16. The firm has worked on the line as development partner and then the delivery partner on Phase One of the project.

Phase Two B is the section of the route from Crewe to Manchester and Birmingham to Leeds.

On the award of the contract, Mace wrote to HS2 saying it intended to challenge the decision to award CH2M the contract to design the second phase of the London to Manchester line. It said it was "naturally disappointed" with the news and was looking closely at its options.

A Mace spokesperson said: "We can confirm that HS2 has invited us to a private meeting to discuss the Phase Two B delivery partner procurement process. We welcome that HS2 have acknowledged the need for this meeting. We continue to review our options closely."

An HS2 spokesperson said: "We received a request for information from one of the bidders about the proposed award of the role of development partner for Phase Two B. It is important that all the bidders have confidence in the process and, as such, we have agreed to delay contract award while we meet with them to discuss the questions they have raised."

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When the contract was initially awarded to CH2M, Beth West, HS2 commercial director, said conflict of interest was "something we have tried very hard to avoid".

She noted the process has anonymised bidders in all award approval documentation and had excluded the interim chief executive from attending and receiving minutes from any meetings or discussions during which the procurement might be discussed.

"We are determined to be fair to everyone, and that includes CH2M,” West added.

HS2 received Royal Assent for its first phase last week, with construction due to get underway this spring. That branch of the route, spanning London to Birmingham, will open in 2026.