Transport Committee

:00:09. > :00:16.Good afternoon and welcome to the transport Select Committee. This

:00:17. > :00:21.afternoon, we are going to be looking at recent procurement and

:00:22. > :00:27.other issues relating to a chest too. Given the scale of HS2 and the

:00:28. > :00:31.sums of money at stake, it is essential that the public is full

:00:32. > :00:39.confidence in the processes involved. Today's session will focus

:00:40. > :00:44.on the withdrawal of C H two M from a major contract and other recent

:00:45. > :00:56.developments. Please can I have your names and positions for our records?

:00:57. > :01:09.What with the offence that led to the withdrawal of C H two M? Shall I

:01:10. > :01:13.give you a quick run through? Pesach matters predominantly looked at by

:01:14. > :01:20.the responsibility of the board of HS2. David will talk about it from a

:01:21. > :01:26.company perspective. Let me give you my perspective. It is worth saying

:01:27. > :01:30.that, from a department point of view, we have been working hard to

:01:31. > :01:35.make sure that things are right because we have gone through a

:01:36. > :01:39.process that, when Simon left, we appointed an interim chief executive

:01:40. > :01:49.who had previous employment history in the project and you are well.

:01:50. > :01:55.When we recruited Simon's permanent successor and the leading candidate

:01:56. > :02:03.has also from the company, we were particularly careful to ensure that

:02:04. > :02:07.notwithstanding the need to manage proper process and pick the best

:02:08. > :02:12.person for the job, and this is a small world where project managers

:02:13. > :02:15.to work for a small number of organisations, we worked very hard

:02:16. > :02:20.to ensure that recruitment process was done very carefully. We took the

:02:21. > :02:28.right person for the job but also did so given the links for the

:02:29. > :02:34.company and we oversaw the process is carefully as we could. Then when

:02:35. > :02:40.this particular contract was let, and they ended up on the top of the

:02:41. > :02:46.list, as you would expect, alarm bells are not the phrase but the

:02:47. > :02:50.desire to make a droopy certain that we know were not getting ourselves

:02:51. > :02:59.into difficult territory rang in my head. I asked my permanent Secretary

:03:00. > :03:07.to do serious due diligence to make sure neither of the two individuals,

:03:08. > :03:11.interim or incoming chief executive, had any position that would have

:03:12. > :03:19.compromised the recruitment process. That work was done independently, I

:03:20. > :03:27.was given absolute complement comfort by my permanent secretary,

:03:28. > :03:32.so we signed off the contract. We then went into the proper process,

:03:33. > :03:36.which is a standstill period. During that period, we were alerted to the

:03:37. > :03:43.fact that there was a conflict-of-interest in the bid

:03:44. > :03:49.team. We made an appropriate enquiries about that and, to be

:03:50. > :03:54.frank, they took a decision to step back from the contract before we

:03:55. > :04:02.could take a decision that this compromised the position. You

:04:03. > :04:11.clearly saw that there was potentially difficult territory. It

:04:12. > :04:16.has raised major questions about what has happened. What did you do

:04:17. > :04:26.to address the issue of potential conflict-of-interest? I ask the

:04:27. > :04:33.committee indulgence to go through a timeline. We keep focusing on the

:04:34. > :04:45.one tender. The actual tender was ?500 million. The design were

:04:46. > :04:50.prepared the hybrid bill for Parliament. That starts with the

:04:51. > :04:55.prequalification questionnaire to the market, that happened on

:04:56. > :05:01.February 20 16. Before that signed off by the we have independent legal

:05:02. > :05:07.on the tender conditions and the scope. We also have an independent

:05:08. > :05:14.review by an insurance panel that is chaired by David Hall. With an

:05:15. > :05:18.imminent panel of experts, all independent on that panel. The sign

:05:19. > :05:23.off on all those prequalification tender documentations pride was

:05:24. > :05:27.going out. That tender went out. We got the feedback from the market,

:05:28. > :05:37.prepared a tender on the basis of how the market reacts to our

:05:38. > :05:40.information. Entirely independent review of the tender documentation

:05:41. > :05:45.starts with our independent legal advice is advising the board as to

:05:46. > :05:50.the satisfactory nature of the tender documents in the preparation

:05:51. > :05:55.of them as well as the independent assurance panel chaired by David who

:05:56. > :05:59.refuse at work. The tender is closed, the review comes in,

:06:00. > :06:05.evaluation of that process. At this stage, it is usually unusual because

:06:06. > :06:09.the process is not subject to independent assurance because it is

:06:10. > :06:13.a more technical process, but the board insists on having an

:06:14. > :06:20.independent review of the process of evaluation that it can apply with

:06:21. > :06:24.the method, criteria, of assessment that the company setup. That was

:06:25. > :06:29.passed and signed off. I know you will seen commentary in the press

:06:30. > :06:36.that the assessment may have been up for questioning. It is quite

:06:37. > :06:39.detailed and clear here. Let them me see the assessment tender on how

:06:40. > :06:44.tenders get assessed. This is signed off by the bidders at the stage of

:06:45. > :06:50.bidding, so if a bidder, one of the three bidders in this contract, were

:06:51. > :06:55.to satisfy, the time to complain about this assessment table was the

:06:56. > :07:00.time and they were submitting the bits. Once they have submitted their

:07:01. > :07:05.bids, they have to sign a declaration, all tenders have the

:07:06. > :07:12.sign it. Part of is this term here, a conflict-of-interest term. If I

:07:13. > :07:16.could just quickly read clause 615? Tenders are reminded from the date

:07:17. > :07:20.of expression of interest, when they start to tender, to the date of

:07:21. > :07:31.contract. It is their responsibility to ensure any personal companies

:07:32. > :07:34.does not have any conflict-of-interest in connection

:07:35. > :07:41.with ages to projects. Steps should be taken to identify all persons and

:07:42. > :07:55.companies who have knowledge of ages two projects and checks should be

:07:56. > :07:59.made so that such person contained confidential information. So if any

:08:00. > :08:04.tenderer advises all individual within our company advises of any

:08:05. > :08:09.such potential perceived or actual, it goes to an independent panel

:08:10. > :08:16.within HS2 to determine whether there is a conflict-of-interest. In

:08:17. > :08:19.this particular case, this one individual, and this comes down to

:08:20. > :08:26.15 contracts, because it is important to say that, out of ?500

:08:27. > :08:36.million, ?350 million have already been awarded contracts to companies,

:08:37. > :08:42.they are already working on engineering work on the design phase

:08:43. > :08:46.2. This came down to one whistle-blower that said there was

:08:47. > :08:53.one individual person that did work as a consultant, which is correct,

:08:54. > :09:00.at HS2 between 2011 and 2016, and this person worked on a bed. We were

:09:01. > :09:07.aware that this individual was put forward by CH2M to work once the

:09:08. > :09:11.project had been awarded, that was perfectly acceptable. Many of the

:09:12. > :09:16.people have worked for a just or other contractors, but what they

:09:17. > :09:21.have to do, and the clause is clear, it is in the preparation of the

:09:22. > :09:24.tender and between the time of contract. If someone has worked for

:09:25. > :09:29.us before that has confidential information about the tender, then

:09:30. > :09:35.that should be raised with us and it was not. So when it was raised with

:09:36. > :09:40.us, which we welcomed, we went back to CH2M and said we have had this

:09:41. > :09:44.issue raised, can you identified? The response was, this person had no

:09:45. > :09:50.confidential information and had a minimal role in the preparation of

:09:51. > :09:55.the tender. However, he was going to be used if they were successful. For

:09:56. > :10:03.us, that was not sufficient or satisfactory so, by this stage, we

:10:04. > :10:07.had independent legal advice is advising the board. We are in the

:10:08. > :10:11.process of exchanging up to 50 different questions to get into debt

:10:12. > :10:15.great detail the individual involved, to get to the bottom of

:10:16. > :10:19.this issue of judgment as to whether or not this person did possess

:10:20. > :10:24.material that could have been considered as confidential and

:10:25. > :10:28.Wetherby four days that this person potentially sat on meetings were

:10:29. > :10:44.material enough to influence the bid. That is what it came down to.

:10:45. > :10:53.They put in a compliant bid, with no such issue of conflict-of-interest.

:10:54. > :10:57.And as this clause says, failure to meet this obligation may result in

:10:58. > :11:01.the occasion of the tender. So, clearly set out in the tender

:11:02. > :11:07.documentation by HS2 is the ability for us to disqualify an individual

:11:08. > :11:10.tenderer and go to the next two order. And it's fair to say, that

:11:11. > :11:13.has happened before on government contracts, so this isn't the first

:11:14. > :11:23.time that this situation has occurred. It is our attention to

:11:24. > :11:28.have a ten day cooling off period and this tender is now open to

:11:29. > :11:32.anyone. That is I think the extensive work we carried out to

:11:33. > :11:37.make sure that the issue of conflict of interests was fairly dealt with.

:11:38. > :11:42.There are the number of very important issues that you've raised

:11:43. > :11:48.there. It rather sounds to me like an account, an justification of what

:11:49. > :11:55.happened, after other people pointed out what had gone wrong. Members

:11:56. > :11:59.will want to ask you a number of points, which will include the

:12:00. > :12:09.nature of the independent assessment that you refer to, and it being

:12:10. > :12:15.conducted by people you appointed, so? Is about how independent they

:12:16. > :12:21.are. And there's one or two points I would like to push before members

:12:22. > :12:26.have their own questions. It sounds like the owners for identifying

:12:27. > :12:32.conflicts of interest rest entirely with the bidder. Is that the case?

:12:33. > :12:36.The Secretary of State has already spoken about looking at potentially

:12:37. > :12:42.difficult territory, I think that was the phrase. It would appear that

:12:43. > :12:51.the onus is in fact on the bidder to identify the conflict-of-interest,

:12:52. > :12:56.and not you, in this major contract, with very large amounts of public

:12:57. > :13:03.money, is that right? Who is responsible for identifying

:13:04. > :13:10.conflict-of-interest? I would argue that the process has worked as you

:13:11. > :13:17.would expect it to... I am asking you a very specific question - who

:13:18. > :13:21.is responsible for identifying conflict-of-interest. I was going to

:13:22. > :13:25.answer that. In a situation like this, ultimately, first and foremost

:13:26. > :13:31.it is for the bidder to conform to the rules. We cannot, no government

:13:32. > :13:36.contracting body can crawl through every aspect of an organisation that

:13:37. > :13:44.is tendering for contracts. There is a duty on behalf of the tenderer to

:13:45. > :13:48.conform to the rules. And as a consequence, there will be

:13:49. > :13:51.consequences if they don't. So, the company involved here has lost a

:13:52. > :13:56.substantial amount of business as a result of the breach of the rules.

:13:57. > :13:59.That has come to our attention because somebody inside the

:14:00. > :14:02.organisation told one of the other bidders. That information could have

:14:03. > :14:07.come from a number of different channels. But I think it is really

:14:08. > :14:12.important to say that the process has worked in exactly the way that

:14:13. > :14:16.you would wish it to work, there is an exhaustive procedure, an issue

:14:17. > :14:19.has arisen, the issue has been investigated and the bidder has

:14:20. > :14:26.withdrawn before HS two and my department took steps on the future

:14:27. > :14:29.of that contract. Had they not done so, it is more than likely that we

:14:30. > :14:33.would have chosen to ask them to withdraw anyway. I don't really see

:14:34. > :14:41.how else you would have wished the procedure to work. I am asking you a

:14:42. > :14:43.question, are you saying that it is wholly up to the bidder to identify

:14:44. > :14:50.conflict-of-interest, and that neither the depart nor HS2 have any

:14:51. > :14:54.responsibility in identifying conflict-of-interest? What I'm

:14:55. > :14:57.saying is that it is not realistic for any government contracting body

:14:58. > :15:04.to monitor every piece of work done by an individual... But this is a

:15:05. > :15:08.major thing, is it not correct that I think it is Mr Reynolds we are

:15:09. > :15:17.talking about, that his involvement in the phase two redevelopment part

:15:18. > :15:23.of the contract was really very substantial? The concerns is, isn't

:15:24. > :15:28.it, that there was somebody from the winning company who in fact designed

:15:29. > :15:36.the contract and therefore one? That's entirely incorrect. The

:15:37. > :15:45.individual you're talking about is Chris Reynolds, and the allegation

:15:46. > :15:52.is incorrect. I can guarantee you, he did not prepare the procurement

:15:53. > :16:04.document. However, he did work for HS2 on or off for some 45 years, on

:16:05. > :16:09.51. -- on phase one. There is also a statement and I think I have seen it

:16:10. > :16:14.on the Construction News website, but there was a statement made that

:16:15. > :16:18.he wrote a lessons learned document which was crucial. I have not seen

:16:19. > :16:26.that document, it certainly has not come to the board in the last few

:16:27. > :16:29.hours. I have done a bit of investigation. Yes, there was a

:16:30. > :16:36.report of lessons learned from phase one, and that mainly related to how

:16:37. > :16:41.we would, how HS2 would resource ourselves, in particular dealing

:16:42. > :16:46.with the community, the community director. And we have done that, a

:16:47. > :16:50.lady called Julia King has been appointed. It was about HS2 working

:16:51. > :16:56.out how to upgrade resources on relations. It was not as a result of

:16:57. > :17:02.any of the tenderers' feedback on how we should write the procurement

:17:03. > :17:07.document, which is what has been implied in this media speculation.

:17:08. > :17:14.Did Mr Reynolds design the tender document or have any influence on

:17:15. > :17:18.it? No, he didn't design the tender document. Did he have any influence

:17:19. > :17:24.on the scoring of it? No, because he was not involved in it. Not involved

:17:25. > :17:28.at all? But what I would say, if we were aware that Chris Wenger was

:17:29. > :17:34.going to be a critical part of the team doing the work on phase two, if

:17:35. > :17:39.we had been aware that he had been in the four days in meetings in the

:17:40. > :17:44.lead-up to the preparation, he never met with HS2 in the bidding process,

:17:45. > :17:49.we would have said to them, don't do it, we are unhappy with it, because

:17:50. > :17:54.the perception is that he worked on and off for HS2 for four years and

:17:55. > :17:59.you should not have him anywhere near the tendering team. This isn't

:18:00. > :18:02.the first time someone has left our organisation and gone to work for a

:18:03. > :18:07.major engineering company which is tendering for work. We are very

:18:08. > :18:10.clear, and what we have said in other situations, keep that

:18:11. > :18:12.individual well away from our organisation in the tendering

:18:13. > :18:20.process. We should have been consulted. We agreed to disagree in

:18:21. > :18:25.the end. They said he had no confidential information, all the

:18:26. > :18:30.information was public. Even if it was public, he knew where to find

:18:31. > :18:34.it, so he was quicker than others in finding it. Secondly, he was only

:18:35. > :18:40.four days attending meetings. He should not have been there. That was

:18:41. > :18:44.our position. If we had been asked and they had gone to our panel, we

:18:45. > :18:50.would have said, keep him away from the tendering document. They would

:18:51. > :18:56.say, no confidential information, therefore, this doesn't apply. This

:18:57. > :19:03.is the same as every other major engineering tenderer, such as

:19:04. > :19:08.Crossrail. So if they had not raised any objections, nothing would have

:19:09. > :19:12.happened? If they hadn't, then the whistle Blair may well have raised

:19:13. > :19:16.it with us. If they had raised it with us after we had awarded the

:19:17. > :19:25.contract, we would have done exactly the same as we did during the tender

:19:26. > :19:29.process, we would have written to CH, answering them to answer

:19:30. > :19:32.questions, and if they had answered the questions in an unsatisfactory

:19:33. > :19:39.nature, then we would not have given them the contract. The key thing for

:19:40. > :19:48.me here, struggling to understand why a company like CH2M, a

:19:49. > :19:54.commercial organisation would have voluntarily withdrawn from such a

:19:55. > :19:57.big project without good reason. That is the bit which flummoxed

:19:58. > :20:05.me... We'll never know. I won't know. It happened before we

:20:06. > :20:10.expected, to be honest. They make a commercial decision, they have other

:20:11. > :20:13.work with us, they're one of three in the consortium which is advising

:20:14. > :20:17.us on phase one. They've got contracts on Crossrail, work on

:20:18. > :20:23.Thames Tideway, maybe they didn't look forward to a legal battle with

:20:24. > :20:27.us on this particular contract. OK. So they've got other contracts with

:20:28. > :20:32.you, they have a reputation to protect, so perhaps it could be

:20:33. > :20:40.suggested that they withdrew from a 107 ?2 million project, apparently

:20:41. > :20:44.without good reason, because what was it possible that he was a

:20:45. > :20:53.judicial review, with a deadline of the end of April, and the last thing

:20:54. > :20:57.they wanted was documents being published and allegations that could

:20:58. > :21:05.then stand up in court of their level of involvement between it and

:21:06. > :21:14.HS2. It would never have got to judicial review. The state that it

:21:15. > :21:18.was in before they were through, unless CH came back with further

:21:19. > :21:22.information, we were ready to disqualify. Our QT said, you have to

:21:23. > :21:29.give them one last chance to respond to these questions. And it's unfair

:21:30. > :21:31.to disqualify them otherwise. If they had been unable to

:21:32. > :21:35.satisfactorily answer our questions, we would not have waited for someone

:21:36. > :21:41.else to come in and challenge it with a judicial review. Following up

:21:42. > :21:47.on the Chair's point about Christopher Reynolds and the work he

:21:48. > :21:50.was doing... So, just to check my understanding, Christopher Reynolds

:21:51. > :21:59.was the chief of staff at HS2, is that right? You work for two years

:22:00. > :22:05.as the chief of staff, which is an assistant role to the, they look

:22:06. > :22:10.after the business diary and... It is not chief operating officer. But

:22:11. > :22:15.would have access to a lot of information? Of course. So, he was

:22:16. > :22:18.chief of staff at HS2, he had access to a lot of information, some of it

:22:19. > :22:29.highly commercial and confidential... Presumably, yes. And

:22:30. > :22:36.he had been working at CH for some time... No, he was working at CH so

:22:37. > :22:51.Condit from HS2, not for CH right, but he was still involved with CH,

:22:52. > :23:00.whether as Acer Conte... Troop. -- whether as a secondee. He wasn't

:23:01. > :23:05.working on HS2 B. He had left the organisation, he was not working on

:23:06. > :23:10.HS2. He worked on lessons learned from phase one. Was involved in

:23:11. > :23:16.phase one primarily. And then he was saying, these are the lessons, he

:23:17. > :23:21.wrote some report, saying, from phase one, this is what we would

:23:22. > :23:30.recommend you do. It is not a report that the board ever saw. So, Chris

:23:31. > :23:35.Wyles, who was the chief of staff at HS2, had access to such information,

:23:36. > :23:43.let's ask it another way, what was his involvement...? From 2013, three

:23:44. > :23:49.years before... What was his involvement? Can we say that he

:23:50. > :23:52.wasn't involved in the bid at all, would that be accurate, to say that

:23:53. > :23:58.Chris Wyles was not involved in the bid at any stage? I think I've got

:23:59. > :24:08.something here saying what he did in the organisation. -- Chris Reynolds.

:24:09. > :24:14.As I say, his primary role was working on phase one. Somewhere

:24:15. > :24:18.here, I think I've got a description of when he left the organisation.

:24:19. > :24:22.That's not what I asked you. I asked you, what was his involvement in the

:24:23. > :24:26.bid, was he involved in the bid at any stage? He was never preparing

:24:27. > :24:30.the procurement documentation, I know that because I asked him that

:24:31. > :24:34.exact question. Sir David, that's not what I'm asking you. I'm asking

:24:35. > :24:41.you, was he involved with the bid at any stage? Erm, was he involved in

:24:42. > :24:46.the bid...? He was not involved in the evaluation at all, or setting

:24:47. > :24:49.the procurement documentation. Was he involved in phase one, and did we

:24:50. > :24:55.take lessons from phase one? That could be construed to help phase

:24:56. > :24:59.two? The answer is yes. So he was involved in the bid? No, he wasn't

:25:00. > :25:02.involved in the bid, he was involved in phase one, and lessons from phase

:25:03. > :25:06.one could have helped anyone preparing face to. Again, just to

:25:07. > :25:14.clarify for the record, when it did Chris Reynolds leave HS2 and when

:25:15. > :25:19.did he start working at CH? He left HS2 in June 2016, left earlier in

:25:20. > :25:23.the year and then he came back again to do some further work. And then he

:25:24. > :25:36.started at CH in September. This contract is a matter of huge

:25:37. > :25:41.public interest and the committee should share the documents compared

:25:42. > :25:47.by Mr Reynolds. Could you ensure there forthcoming? We do not have

:25:48. > :25:51.any dispute the Chris Reynolds should not have been involved in the

:25:52. > :25:58.tender process. Our tender conditions are very clear. Anyone

:25:59. > :26:05.that either could reasonably seem to have had or could be perceived to

:26:06. > :26:10.have had any potential, seen or construed, to have any influence or

:26:11. > :26:14.confidential information, he will maintain he had no confidential

:26:15. > :26:19.information. We maintain it could be construed that he had unique

:26:20. > :26:25.information because of his history. So, if we had been asked, as is

:26:26. > :26:32.required under this clause, which the tenderer has to sign, we should

:26:33. > :26:35.have been informed. We were certainly informed he was going to

:26:36. > :26:44.work on the project. You should not have been involved in the tender

:26:45. > :26:51.preparation of CH's bid because it was too close to us. That was the

:26:52. > :26:55.wee reason why we were close to disqualify. Would you release all

:26:56. > :27:02.documents Mr Reynolds has prepared the HS2 has in its possession to the

:27:03. > :27:09.committee? I will ask our legal advice because some of that will be

:27:10. > :27:15.his and some will be CHs. It is his information, his e-mails and private

:27:16. > :27:20.information. I am not interested in his personal stuff but his

:27:21. > :27:30.involvement. That is what is concerning here. What the contracts

:27:31. > :27:38.that are still in existence between C H and HS2? Tell me a bit about

:27:39. > :27:44.them. The contract the work on is phase 1 and they work with two other

:27:45. > :27:50.organisations. They advise us as a delivery partner for the contracts

:27:51. > :27:55.which then carry out the physical work. The were two other

:27:56. > :28:02.organisations and they provide the programming expertise as they do not

:28:03. > :28:07.Crossrail and the Olympics. What is the ballpark cash figure? Around 300

:28:08. > :28:16.million, divided by three companies. The date, of the 2 billion we have

:28:17. > :28:20.spent on the contract, we have spent 120 million with C H. What is

:28:21. > :28:29.important to understand... It seems like a lot of money. Under the

:28:30. > :28:39.contracts which is up for tender tomorrow, there are ?12 billion

:28:40. > :28:46.worth of contracts for tender. ?12 billion worth of contracts under

:28:47. > :28:49.evaluation at the moment or under tender. CH, because of

:28:50. > :28:58.conflict-of-interest requirements we impose on them, are not allowed to

:28:59. > :29:02.any work. We are focusing on a particular problem area and it is

:29:03. > :29:07.true to say that Mr Reynolds had information because of his previous

:29:08. > :29:13.involvement, which was of benefit to the winning bidder. We do not know

:29:14. > :29:20.that. Well, you do know that because you did just say to us that his

:29:21. > :29:25.involvement in phase 1 worn the lessons learned would be of benefit

:29:26. > :29:36.in looking at phase 2. What I said was that this lessons learned paper

:29:37. > :29:39.which refers mainly to how we handle all the community relationships

:29:40. > :29:43.which we put on ourselves as an organisation. Whether that would

:29:44. > :29:47.ever benefited tenderer is questionable, but the point we make

:29:48. > :29:54.is, under our terms and conditions, we should have been informed as to

:29:55. > :29:58.his involvement in the tenderer or the potential to involve him, in

:29:59. > :30:10.which case we would advise strongly not to involve him. What is ballpark

:30:11. > :30:16.to the nearest 10 million, the ballpark some money in existence in

:30:17. > :30:24.contract between ages two and C H? There is a contract of 300 billion,

:30:25. > :30:29.and that contract is run by three different organisations, of which CH

:30:30. > :30:34.is one of the consortium members. How those members actually divide up

:30:35. > :30:39.at work between them... Is that not something you should know? I do not

:30:40. > :30:44.know what the internal arrangements of what three companies are. It is a

:30:45. > :30:54.consortium. I will give you a simple example. Laing O'Rourke and CH

:30:55. > :30:59.formed a consortium to deliver the Olympics. I do not know how they

:31:00. > :31:03.divided the money between them, which is paid one company. You do

:31:04. > :31:10.not say to them, how much did you split the profit? Absolutely

:31:11. > :31:16.extraordinary! We have got ?300 million though we are talking about

:31:17. > :31:19.here, we have got a company that has withdrawn from a process under

:31:20. > :31:24.severe questions as to why they withdrew from that process, and we

:31:25. > :31:29.have got the chairman of an organisation sat before us that does

:31:30. > :31:33.divvied up and what share it is divvied up and what share it is

:31:34. > :31:41.going to a company that has been withdrawn. I know that the three

:31:42. > :31:45.companies involved, they have formed their own consortium of how the

:31:46. > :31:50.service is and we contract them a figure that ranges between 250

:31:51. > :31:58.million and 300 million over a 10-year period. We are clear this is

:31:59. > :32:03.about a bit contract which is very important to which other company.

:32:04. > :32:06.What we are getting very confused with is one thing, there is another

:32:07. > :32:13.party in the room here which no one has ever talked about, OK? We are

:32:14. > :32:16.not getting confused. We are concerned about something with the

:32:17. > :32:24.big question around it, and that is what we will keep pursuing. Your

:32:25. > :32:33.company's approach on the due diligence is effectively to put the

:32:34. > :32:38.obligation under clause 6.12 back to the bidders and, if they effectively

:32:39. > :32:44.breach that, they could end up loosing the bid, which in this case

:32:45. > :32:49.has been an successful. Is it your understanding that that is the usual

:32:50. > :32:55.process? That is standard practice, you see that with Crossrail and all

:32:56. > :33:00.major government contracts. We do intend to tighten up following this

:33:01. > :33:04.exercise. What we will say in future... This seems fairly own

:33:05. > :33:12.arrests. There is also a document you need to sign. But in future, we

:33:13. > :33:17.will say, you need to disclose to us who you intent to use on your

:33:18. > :33:22.tendering. Give us more of a chance to scrutinise this ourselves. It is

:33:23. > :33:27.something we will tighten in our tendering process, but it is

:33:28. > :33:31.standard practice and is used every major engineering and civil

:33:32. > :33:34.contracts in this country today. The publicity that surrounds this, there

:33:35. > :33:38.would not be a contractor or engineering firm in the UK that

:33:39. > :33:45.would be very focused on the issue of declaring conflict-of-interest

:33:46. > :33:49.because our board has been prepared to be top with us. We could've

:33:50. > :33:55.simply waved it through and said, CH had said minimal involvement would

:33:56. > :33:59.be no confidential information. We have got a heavy legal team, went

:34:00. > :34:06.through extensive questioning of CH, we were not concerned they worked on

:34:07. > :34:12.another contract, and it was quite clear that, if in the end, they were

:34:13. > :34:16.unable to answer our questions, we had no compunction whatsoever about

:34:17. > :34:20.cancelling debt tender, and we were covered to allow for that. I get

:34:21. > :34:26.back to the point which I was time to make earlier on, everyone is

:34:27. > :34:30.saying that we are forgetting, one party has complied verily with this

:34:31. > :34:36.entire tender. They put in a compliant bid cheaper and better as

:34:37. > :34:40.per all the independent assessments, and now they have been awarded, and

:34:41. > :34:47.people are forgetting it would be utterly unfair to stop this process

:34:48. > :34:49.when they have complied completely with the rules including

:34:50. > :34:53.conflict-of-interest. You will not believe this but I was going to make

:34:54. > :34:59.a suggestion you could take the names and do the due diligence, but

:35:00. > :35:08.you ready are. It is a very sensible suggestion. Is that standard? It

:35:09. > :35:14.would be new. I am sure everyone else would've reflect on it now.

:35:15. > :35:16.What is clear here is it is about interpretation. Here is a tender of

:35:17. > :35:26.that who knows what the discussion was between Chris Reynolds and CH? I

:35:27. > :35:30.am not aware of it. And how much input he had a tour into the bid. He

:35:31. > :35:37.will maintain and his lawyers will maintain that the issue is, we have

:35:38. > :35:44.a different level of judgment and standard and we intend to apply that

:35:45. > :35:47.ruthlessly and intend to do our more intrusive investigations. The most

:35:48. > :35:51.important thing for us is an open and transparent tendering system to

:35:52. > :35:55.make sure we get the industry confident enough with our bidding so

:35:56. > :35:59.we get competitive prices. The last thing we all the government wants is

:36:00. > :36:07.the industry to think our process is not fair. The downside of HS2 doing

:36:08. > :36:14.due diligence is that it could perversely allow company to say, it

:36:15. > :36:19.was your fault. So we are still in the game. I can see you are dammed

:36:20. > :36:22.if you do, dammed if you don't. Have your legal advice is giving you the

:36:23. > :36:33.advice that you still have the same deterrent effect from six point 12,

:36:34. > :36:42.notwithstanding you do as well? We will not remove that close. A

:36:43. > :36:49.question for clarification, and I apologise if I've misheard what you

:36:50. > :36:55.said. I understood he said the bid was the best technically and was 15%

:36:56. > :37:01.cheaper of the three... Of the remaining two. I was going to then

:37:02. > :37:06.ask what gave CH the advantage. They were rated technically higher. That

:37:07. > :37:12.is not surprising in some ways because they carried out the phase 1

:37:13. > :37:18.word. And very successfully, because all the work put through Parliament

:37:19. > :37:22.was programme managed and supervised by CH in a very competent way.

:37:23. > :37:27.Naturally, they had a competent team. It is something we would have

:37:28. > :37:33.to consider. I would technically wait it the highest, but they have

:37:34. > :37:37.left the table, they are no longer there, they have withdrawn their

:37:38. > :37:46.bed, and we are not considering CH any more. So there are two compliant

:37:47. > :37:52.tender is left in the evaluation process now. The evaluation is

:37:53. > :37:58.marginally higher and cheaper from the public's point of view, and

:37:59. > :38:03.therefore the award is clear. It has gone through the department, is

:38:04. > :38:07.subject to a tender, and extends to a period which is standard practice.

:38:08. > :38:15.If Mace want to challenge it, it it is entirely in the right to

:38:16. > :38:19.challenge it. It is worth saying that, in terms of this process, this

:38:20. > :38:25.is how it is supposed to work. You go through the tender process, you

:38:26. > :38:29.evaluate the tenders, you announce a preferred contractor who then have a

:38:30. > :38:33.standstill period to challenge that decision, you move onto the final

:38:34. > :38:36.stage of confirming contracts. In this particular case, we went

:38:37. > :38:46.through all of that during the period. The appropriate steps were

:38:47. > :38:50.taken to monitor, investigate and before my department or ages to

:38:51. > :38:56.could take any decision, the company chose to withdraw. My argument would

:38:57. > :39:01.be that is how the process is supposed to work. This particular

:39:02. > :39:04.case, a whistle-blower chew our potential to the bid process, it

:39:05. > :39:10.could've been something different. You would want a process whereby if

:39:11. > :39:13.an issue arises during that standstill period, we would take

:39:14. > :39:18.appropriate action, that is what happened. Well you concerned that

:39:19. > :39:26.affect health might take legal action you if you did not give them

:39:27. > :39:29.the contract? It would've been contrary to our contract tender

:39:30. > :39:34.award. It's as if we disqualify a party because of this, we have the

:39:35. > :39:38.right to disqualify them. It does not say we have the right to abolish

:39:39. > :39:46.the bidding process. They may have challenged all we could get in the

:39:47. > :39:52.bizarre situation to retender it, and they win again, what happens

:39:53. > :39:57.then? Family times would we have the retender it? You think that was

:39:58. > :40:05.really likely? They have the right to do it. They withdrew under

:40:06. > :40:10.pressure, didn't they? They withdrew for their own reasons. I have not

:40:11. > :40:15.met with CH to understand why they did that, but I would be interested

:40:16. > :40:20.to understand what reason they give for withdrawing. Haven't you

:40:21. > :40:21.previously said to us there was conflict-of-interest that there had

:40:22. > :40:32.not been declared? I said that unless Bechtel came up

:40:33. > :40:38.with more information than a board... -- I said that let CH came

:40:39. > :40:42.up with more information. We were clear to the board that they had to

:40:43. > :40:45.give CH a chance to respond in a satisfactory way wise you were

:40:46. > :40:50.denying them the chance to respond to respond to your challenges, the

:40:51. > :40:53.disquiet by them for that youth is a waste of challenge. Doesn't that

:40:54. > :40:57.really contradict the statement you made to is that you really don't

:40:58. > :41:02.know why they withdrew, sure you do know why, because it got too hot for

:41:03. > :41:06.them. I do not know why they've finally, you asked, one of the

:41:07. > :41:10.members say, was it because of commercial... I will never know,

:41:11. > :41:17.they made a judgment, they are a private company they did not want to

:41:18. > :41:20.go on in this long legal challenge between the two organisations to

:41:21. > :41:25.continue, they may have decided they couldn't respond to the questions

:41:26. > :41:30.adequately. Who knows? I do not know where they decided. All I'm saying,

:41:31. > :41:34.at the state when they withdrew we were certainly under the decision

:41:35. > :41:38.that unless something came back satisfactory is we would have

:41:39. > :41:43.disqualified them, but we didn't. And you spread to others about

:41:44. > :41:49.having an independent oversight of what happened. You appointed the

:41:50. > :41:56.institution of civil engineering? An individual who was past president,

:41:57. > :42:02.he did the same role on Crossrail and he was a past president of the

:42:03. > :42:06.Institute of civil engineers and he still chairs are independent

:42:07. > :42:10.insurance panel and on his panel he has a series of experts on the road

:42:11. > :42:14.from a legal and other backgrounds which review all of our tenders,

:42:15. > :42:19.they would be the tender document for the go out of as well. So it was

:42:20. > :42:24.the individual rather than the institution? Correct. His previous

:42:25. > :42:28.role, he is an eminent engineer that is the only reason we have mentioned

:42:29. > :42:32.him. What do you look at, the evaluation of the bid specifically?

:42:33. > :42:36.He looked at what process did we set out to a valley with attenders and

:42:37. > :42:46.did we comply with our own processes that will we publicly said in the

:42:47. > :42:48.tender documents by weight them. On the Sedgemoor, this assessment is a

:42:49. > :42:51.jewel here, it is quite detailed, did we carry out the evaluation in

:42:52. > :42:56.accordance with our assistant panel. So he looked at the evaluation

:42:57. > :43:02.himself? He looked at the processes. Do you look at the actual

:43:03. > :43:07.evaluation, not the process, but the content? He did not go back on be

:43:08. > :43:12.evaluate all the tenders, he did not go back because the evaluation is a

:43:13. > :43:16.pro that interviews, there is actual work shops where the interview

:43:17. > :43:22.staff, there is an interview of the CV, he did not go back and review

:43:23. > :43:25.the ten to evaluation and he asked what tempers we put in place and how

:43:26. > :43:29.we carried out evaluations. He looked at the process and did not

:43:30. > :43:36.review or re-evaluate the tenders himself. No. Was there any outside

:43:37. > :43:41.evaluation of the process, not the process of the actual evaluation?

:43:42. > :43:45.With any outside assessment? Was there an outside assessment, no,

:43:46. > :43:49.there was an outside assessment of the process of evaluation, there was

:43:50. > :44:05.that external review of the tender? Not quite saved by the bow, we will

:44:06. > :44:13.be returning. You were giving us information about the evaluation.

:44:14. > :44:17.The question was asked about what was the relationship between CH and

:44:18. > :44:20.the other two companies, it was actually Andrew Jones in Parliament

:44:21. > :44:28.on the 13th of April who confirmed that the ratio was 10%... 50%

:44:29. > :44:31.Bechtel so hopefully that answers the question now on the ratio

:44:32. > :44:37.between the three parties and the other thing I was trying to save the

:44:38. > :44:47.history of Chris Reynolds, December 11 to April 13. -- 50% CH. Then he

:44:48. > :44:52.worked at HS2 on secondment from CH2M, he worked on the phase one

:44:53. > :44:58.hydro Bill then from April 14 to March 16 he worked against a conduct

:44:59. > :45:05.from CH2M on the additional provision, so you can effectively

:45:06. > :45:11.say on and off until March 2016 he worked on the hydro Bill and the

:45:12. > :45:17.amendments that came with it. -- dehydrate Bill and the amendments

:45:18. > :45:19.that came with it. He spent several months undertaking work on

:45:20. > :45:24.organisational design to the phase two team which is what I think is

:45:25. > :45:28.referred to as I have not seen the question, the letter which is the

:45:29. > :45:31.organisational design belated particularly to the community

:45:32. > :45:35.engagement level. That was a short term contract. That is the history

:45:36. > :45:44.of Chris Reynolds as I have it. Thank you. I want to ask you about

:45:45. > :45:46.your conflicts panel... Surrey, on the back of that none of that

:45:47. > :45:50.negates the issue that Chris Reynolds should not have been

:45:51. > :45:54.involved on the bid as we have consistently said and as has been

:45:55. > :45:58.said in the evidence today. He should not have been involved in the

:45:59. > :46:04.bid? He should not have been involved in the bid by CH. And you

:46:05. > :46:08.still say that was entirely Bechtel's responsibility. None of it

:46:09. > :46:16.was just to identify? It will be future. -- that was the

:46:17. > :46:20.responsibility of temp to TDs. Of that Makabu responsibility of CH.

:46:21. > :46:24.You are now changed that in the light of the situation? We will

:46:25. > :46:28.leave that clause exactly as it is because that is how every other

:46:29. > :46:30.major transport contractors operated on but we will be more intrusive to

:46:31. > :46:34.catch this issue to tighten the catch this issue to tighten the

:46:35. > :46:38.rules in this particular case in the future. There are some close

:46:39. > :46:45.connections between the two companies between CH and yourselves.

:46:46. > :46:49.Including the appointment of a cheap executive. In relation to the chief

:46:50. > :46:54.executive appointment, you did say at one point that you were looking

:46:55. > :46:58.for Derry worldwide and you would get the best worldwide, it had out

:46:59. > :47:05.to be the man already in the building. -- at one point that you

:47:06. > :47:07.looking for Derry worldwide. Not in the building, the Acting Chief

:47:08. > :47:15.Executive was not the person appointed as the chief executive, he

:47:16. > :47:18.was running CH2M's European operation. We had a list of

:47:19. > :47:24.candidates are number of different organisations around the world, he

:47:25. > :47:30.came with the strongest CV and did the most effective job in presenting

:47:31. > :47:34.his case to the current Chief Executive. At once point did you

:47:35. > :47:40.decide he was the best candidate? Whose decision was it was it HS2,

:47:41. > :47:47.was Secretary of State? The two of together. The Secretary of State's

:47:48. > :47:53.decision ultimately. Basically, there was an interview process I saw

:47:54. > :47:58.the CVs of the applicants, there were clearly a small number of

:47:59. > :48:02.strong candidates of which the successful candidate was one. They

:48:03. > :48:09.were all interviewed, the panel made a recommendation to said David and

:48:10. > :48:17.to myself. Before that was accepted because of the fact that CH2M was a

:48:18. > :48:22.strongly linked to HS2 as they wear, because we had one of his colleagues

:48:23. > :48:27.the interim Chief Executive I instructed my permanent Secretary to

:48:28. > :48:30.carry out a further level of due diligence. That made sure that he

:48:31. > :48:39.was absolutely happy that the process was robust, isolated from

:48:40. > :48:43.commercial interests, between CH2M and HS2, when I received the usual

:48:44. > :48:47.and I approved the appointment. I make no apology but doing so we won

:48:48. > :48:53.the best people and if the best person is running the European

:48:54. > :48:58.operation of the contractor if he's the best person for the job he is

:48:59. > :49:03.the best present the job. At what point was that happening? Before.

:49:04. > :49:08.The tender was submitted in mid September 2016, the first discussion

:49:09. > :49:12.I had all anyone from the Department had with Mark as a potential to be

:49:13. > :49:18.longer listing was in mid-December, two months later. He was awarded his

:49:19. > :49:22.contract negotiated under 9th of February. You can see there is a

:49:23. > :49:24.clear distant is between the submitting of the bid some two

:49:25. > :49:27.months before we had our first months before we had our first

:49:28. > :49:31.discussion with Mark about whether he potentially wants to apply on

:49:32. > :49:35.whether we thought he should be in a long listing process. Write him

:49:36. > :49:41.coming to HS2 we had clarification that he had no shares, no options,

:49:42. > :49:45.no payments outstanding CH and since he has been here and certainly with

:49:46. > :49:52.time when Bowyer was in interim, they had no involvement with any CH

:49:53. > :49:56.conference. All with termination of the contract. Mr chew it. On the

:49:57. > :50:00.recruitment process for the new Chief Executive, did the company use

:50:01. > :50:08.a professional executive search firm. I used to be an executive

:50:09. > :50:11.search consultants, they went through the usual process of

:50:12. > :50:17.presenting you with a long list, and then a short list... Correct. They

:50:18. > :50:20.went around the world for a few months, there were 30 people

:50:21. > :50:25.interviewed, I did many of the phone conversations and videos as well as

:50:26. > :50:29.the global operators Bob Singapore, to Sydney, to America only look that

:50:30. > :50:33.a lot of people from mining companies, it is not surprisingly

:50:34. > :50:38.the final short list was made up by people who came from global

:50:39. > :50:42.programme companies. Remember Mark's history, he started as an

:50:43. > :50:47.apprenticeship on London underground, he worked his way up,

:50:48. > :50:50.then he is in the private sector and is on the Olympics, he worked on the

:50:51. > :50:55.structure of the Olympics Comey goes into Crossrail and on that project

:50:56. > :51:00.only took over European operation edges it with something else, 3000

:51:01. > :51:07.staff, 500 million annual turnover, complex issue of much of... So, he

:51:08. > :51:11.is an obvious candidate and there were one or two other ones that came

:51:12. > :51:16.from the usual suspects who you would recognise in the industry. The

:51:17. > :51:19.fact that we hide from... The brief was clear, someone it knew the

:51:20. > :51:26.English market and the UK market who had worked here who do major

:51:27. > :51:29.projects come up ideally with a railway background and had a proven

:51:30. > :51:37.track record in solid management. That is a relatively small Paul,

:51:38. > :51:44.hopefully HS2 and investment will widen the pool but we did fish in a

:51:45. > :51:48.small pond. -- that is a relatively small pool. There was a relatively

:51:49. > :51:52.small group of very counted people that everyone is having and they

:51:53. > :51:57.will move between client and contractors the whole way through.

:51:58. > :52:00.Our challenge is to have an open and transparent process that the

:52:01. > :52:05.industry has confidence in that will fairly execute and carry out so they

:52:06. > :52:10.feel they have a fair chance to bid. We are in a limited pool, hopefully

:52:11. > :52:14.you will get bigger as time goes on. I have a few questions about the

:52:15. > :52:20.small pool, to make this process works transparently, fishing in a

:52:21. > :52:24.small pool, all the Fish know each other, you have to do have a strong

:52:25. > :52:32.believer in Chinese walls, don't you? What is the evidence that the

:52:33. > :52:39.Chinese walls work? I know from going through all, the work on the

:52:40. > :52:43.Olympics we had a ruthless process, I did not know, the board does not

:52:44. > :52:50.get to see on the evaluation process, they are anonymous to in

:52:51. > :52:52.terms of the selection process, so they are quarantined from the rest

:52:53. > :52:58.of the organisation of the Birmingham and isolated. Being

:52:59. > :53:01.familiar with this process and legally being challenged before and

:53:02. > :53:06.having it stand the test of scrutiny to make sure we have a clear

:53:07. > :53:14.process, we had the protection we had an of HS2 buy in independent

:53:15. > :53:19.director and they do the full review of the evaluation process, so to

:53:20. > :53:23.your earlier question, chair, what is a check and balance to make sure

:53:24. > :53:26.the evaluation is done correctly it is that independent committee that

:53:27. > :53:32.puts in an anomalous amount of time and effort into it. I did not sit in

:53:33. > :53:37.this committee, because I thought, I'm sitting here evaluating people

:53:38. > :53:39.who are coming from these sorts of organisations to be CEO,

:53:40. > :53:47.potentially, I do not want to sit and neither do the other people on

:53:48. > :53:51.the seven person evaluation team to choose the Chief Executive, neither

:53:52. > :53:57.of them myself sat on the committee that signed off the final

:53:58. > :54:01.recommendation on the delivery partner role. Secretary of State,

:54:02. > :54:06.what interested me most as a Manchester MP is not the rather

:54:07. > :54:15.complicated commercial details it is whether what has happened, whether

:54:16. > :54:20.it will delay stage to be, will it? Aydin think it will. This is a

:54:21. > :54:29.matter of weeks rather than months. -- I do not think it will. Stage two

:54:30. > :54:33.B is a long project. I think we move quickly. If we discovered this in

:54:34. > :54:37.six months' time it might be a different question but it emerged

:54:38. > :54:42.during a standstill period. There will be a relatively small delay.

:54:43. > :54:50.You came from the tender to the second tender, do you think that is

:54:51. > :54:53.legally challenging double? It is difficult to understand how you

:54:54. > :54:58.would legally challenge someone who is cheaper and this capability

:54:59. > :55:02.better but there is nothing to stop them. I hope to meet with the CEO

:55:03. > :55:08.before the end of the standstill period to explain the process. I've

:55:09. > :55:11.written to not say how much we appreciate the fact that they, as

:55:12. > :55:16.the Secretary of State just dead, imagine if we had discovered this in

:55:17. > :55:20.three or six months' time. In fact they put forward this issue and I

:55:21. > :55:25.have complete assurances from Te'o board that no tenderer will ever be

:55:26. > :55:30.disadvantaged in this organisation. I am hoping that we can avoid legal

:55:31. > :55:32.challenge, that is not to say they do not have the right to do it as

:55:33. > :55:46.they do have the right to do it. I can imagine, if one tender has

:55:47. > :55:53.dropped out and there have been certain accusations, Mace C that the

:55:54. > :56:01.bidding process is flawed and therefore it should be be run, which

:56:02. > :56:04.means, if there was a legal challenge of the tendering is rerun

:56:05. > :56:12.under threat of legal challenge, which might be a sensible option,

:56:13. > :56:19.but that not delay phase 2? Life you want this would be that we would be

:56:20. > :56:23.equally legally vulnerable if we did not follow our process and simply

:56:24. > :56:31.restarted this when there is a clear second place to whom we can make the

:56:32. > :56:37.award. My hope and belief is that the professional organisations

:56:38. > :56:43.involved here would not seek to use the court's process. There is a huge

:56:44. > :56:47.amount of business to be one with a chest to an investment and

:56:48. > :56:51.infrastructure are taking place, there is a real commercial

:56:52. > :56:55.opportunity for any serious project management organisation involved in

:56:56. > :56:59.infrastructure. Sometimes they will win and sometimes they will not and

:57:00. > :57:05.each will learn lessons when they are not successful and apply those

:57:06. > :57:12.lessons to future tenders. We need to get on with the job. My message

:57:13. > :57:17.to any contractor working with government is, if you have a

:57:18. > :57:25.legitimate grievance, come to us and you will address it. But please do

:57:26. > :57:30.not use the court system because that does no favours to any of us.

:57:31. > :57:38.If I can take you back to the question I asked you in previous

:57:39. > :57:44.sessions, is hope sufficient to reassure my constituents that phase

:57:45. > :57:50.2 will not fall behind Crossrail 2 in terms of the schedule where, what

:57:51. > :57:59.I understand the critical parties, the timetable to get the next hybrid

:58:00. > :58:04.Bill? So if there is a delay, will not put it behind Crossrail 2?

:58:05. > :58:11.That's not pecking order list one or another. We have a number of major

:58:12. > :58:14.projects in the pipeline for more hybrid bills, but I do not think

:58:15. > :58:19.anything happening on this project at the moment will change the

:58:20. > :58:25.timeline for it, and I do not think it is a question of losing your

:58:26. > :58:36.place in the queue. We intend to proceed with hybrid Bill as soon as

:58:37. > :58:41.we possibly can. As understand it, we have rules that there is only one

:58:42. > :58:47.hybrid Bill at a time going through. We are currently doing a review of

:58:48. > :58:52.the procedure to simplify it, something I support the something I

:58:53. > :58:58.was involved in. It is certainly the case that the hybrid Bill process is

:58:59. > :59:02.too convoluted and extended. I hope and expect that, as a result of the

:59:03. > :59:09.work that is being done on this, that by the time we come to future

:59:10. > :59:13.hybrid bills, we will have a simplified process. I do not think

:59:14. > :59:20.it is a question of having the queue. At the moment, we do not have

:59:21. > :59:26.an expectation that HS2 will start and then several down the line,

:59:27. > :59:30.Crossrail 2 will start. We are working hard to develop these

:59:31. > :59:33.projects and all have a streamlined process that will enable us to get

:59:34. > :59:43.the infrastructure projects we need into the system. If the tender

:59:44. > :59:49.process has to be rerun, your optimism is unjustified. How much

:59:50. > :59:55.would it cost? It is not the cost. It would take 9-12 months to redo

:59:56. > :00:00.the tendering. So that is the real cost? That is the real cost, and at

:00:01. > :00:04.that stage we would go back to the department and say, it is better we

:00:05. > :00:10.hire these people directly rather than lose 9-12 months, and let's

:00:11. > :00:14.hope we do not go there because it will have the potential to cause

:00:15. > :00:21.consequences. But I hope reason prevails and we do not have a chance

:00:22. > :00:24.of delaying it. I take the point that I missed the real cost, but do

:00:25. > :00:29.you have a rough figure, ballpark you have a rough figure, ballpark

:00:30. > :00:36.figure, of the financial costs? I don't know. Why is the commercial

:00:37. > :00:44.management service contract being redone? There is a simple answer for

:00:45. > :00:50.that, we changed the scope. As we looked at it... This is a contract

:00:51. > :01:00.for third-party private sector companies. Major tenders for the

:01:01. > :01:02.contracting industry deliver this. This contract is ?9 million in

:01:03. > :01:10.total, so small. We looked at how it total, so small. We looked at how it

:01:11. > :01:15.would tie and for the work as we gained more aware of these contracts

:01:16. > :01:19.of opening, and we decided we needed to change the scope of that

:01:20. > :01:25.contract. We will draw down the highways England contract, so it

:01:26. > :01:29.would not delay anything at all. We will probably retender it in a

:01:30. > :01:34.couple of years' time as you work at how the woodwork and how we would

:01:35. > :01:41.administer the more effectively, we needed to change the scope. You have

:01:42. > :01:44.got to retender, so it is our better understanding the role of this

:01:45. > :01:51.contract. You have had a lot of change senior staff recently and you

:01:52. > :01:57.yourself have now become chairman of Gatwick Airport. Does this mean

:01:58. > :02:06.there is any less commitment to HS2? No, I am on seven days a week, so I

:02:07. > :02:12.can assure you the Gatwick role is chairing the board as well. I am

:02:13. > :02:16.contracted tip for three days a week, I certainly do that. I can

:02:17. > :02:24.assure you my commitment to the project. In terms of change, yes, I

:02:25. > :02:29.was sad that Simon Kirby left and went to Rolls-Royce, but having our

:02:30. > :02:32.Chief Executive being headhunted to the country's premier engineering

:02:33. > :02:38.company is not bad ticking the box for HS2 and the Simon, I was

:02:39. > :02:42.delighted. We have had a pretty smooth transition and I am

:02:43. > :02:47.enormously grateful to Roy Hill for stepping in because his previous

:02:48. > :02:52.experience to carry out the work. We have not missed that time. Of the

:02:53. > :02:57.senior team, four have left in the last year, and one is Simon who was

:02:58. > :03:01.headhunted, one was a lady who was under contract, she came in to do

:03:02. > :03:03.some contract change work on people, and we are recruiting a permanent

:03:04. > :03:08.person there, and the other two person there, and the other two

:03:09. > :03:12.people have left the organisation. It was our plan for them to leave

:03:13. > :03:18.because we are finishing a stage of the hybrid Bill work on a moving

:03:19. > :03:23.into delivery. That was something we planned for. I do not see that we

:03:24. > :03:28.have any great churn of the top of the organisation. The other

:03:29. > :03:38.question, there is a revolving door between ourselves and CH2M. We have

:03:39. > :03:49.1100 permanent staff in total, 25% of them are ex-CH2M, so I am not

:03:50. > :03:55.aware of anyone leaving our organisation and going into CH. If

:03:56. > :04:02.it is a revolving door, it is pretty squeaky. So our organisation is

:04:03. > :04:05.hiring people and it will inevitably hire from seat age but there is not

:04:06. > :04:16.something you would do where people are moving constantly in and out.

:04:17. > :04:23.But the highest proportion... 38%? They are our delivery partners. They

:04:24. > :04:29.do make up a fair chunk of Sir Condy 's. We want to reduce or the time.

:04:30. > :04:36.Two years ago, we had just under 800 staff, and we're now down to less

:04:37. > :04:41.than 30%. It is logical they are a big share of visa Condys because

:04:42. > :04:47.they are doing all the work on the delivery. Should the public feel

:04:48. > :04:52.confident that HS2 is in good hands? Yes, absolutely. We have a new chief

:04:53. > :04:55.executive, a very distinguished chairman, good team, the

:04:56. > :05:02.construction workers about to start, the first phase of the hybrid Bill

:05:03. > :05:10.is in case. In this particular case, we were notified of the procedural

:05:11. > :05:16.flaw in the contracting process, something that was not acceptable,

:05:17. > :05:19.and these supplier during the standstill period to do with

:05:20. > :05:22.decision to withdraw rather than have us take a decision on whether

:05:23. > :05:28.or not that should happen. The standstill period is for precisely

:05:29. > :05:32.that purpose. I would argue that the process has done what it is supposed

:05:33. > :05:35.to do, we can never legislate to stop people getting things wrong. We

:05:36. > :05:41.can take action when they do, in this case did not have too because

:05:42. > :05:46.they did it themselves, and we have added an extra layer to the process

:05:47. > :05:49.as a result which goes beyond what is normal public contracting. I do

:05:50. > :05:55.not see what else we could have done. Thank you very much. Order,

:05:56. > :06:38.order. When we say Bob's your uncle, we

:06:39. > :06:44.mean it is as simple as that. One convincing story about the phrase's

:06:45. > :06:48.origin is a well-known case of Parliamentary nepotism. Victorian

:06:49. > :06:53.Prime Minister Lord Salisbury successively promoted his unpopular

:06:54. > :06:57.nephew. Arthur was not without talent. He even became Prime

:06:58. > :07:03.Minister, but his career was kick-started by the jobs he received

:07:04. > :07:05.from his uncle. First uncle Bob appointed Arthur is as private

:07:06. > :07:06.secretary then president