Tenders Direct Blog

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Bidder launches legal action after missing out on £1.2bn waste contract

Posted by sandra hatfield on July 25, 2013

Covanta, an aggrieved bidder is taking legal action over a 30year contract award by Merseyside Recycling and Waste Authority (MRWA), to SITA UK. The legal team for rival bidder Covanta said that it was flawed procurement process, that failed to take into account the economic savings in their clients bid.

The MRWA said it “regrets this action by Covanta”. It recognised Covanta’s disappointment but said it “a conducted an extensive and fair procurement process over several years and is confident that the most economically advantageous solution has been selected for Merseyside”. MWRA has promised to “vigorously defend the claim brought against it”.

Covanta, which served High Court papers on the authority earlier this month, is asking the court to order MRWA to set aside the decision not to award the contract to Covanta UK, while requiring it not to enter into a contract with its preferred bidder SITA without further opportunity for tenders to be submitted.

The 109 page submission to the Court covers lengthy discussions between the two parties over financial structure, with Covanta claiming cost of its tender over the term of the contract would be £200 million cheaper than SITA’s. However, the papers also note MRWA “evaluated certain aspects of the claimant’s tender as being “fundamentally unacceptable”.

Had Covanta’s bid been accepted, the company would have constructed an energy from waste facility at Peel Holding’s Inca Park development nine miles east of Chester. It would have consisted of three streams totalling 850,000 tonnes capacity per annum, with a third line that could be used on a commercial basis.

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