2015 Report details for project: Magnox and RSRL PBO Competition

Project name: Magnox and RSRL PBO Competition - there are 7 reports for this project: 2013, 2014, 2015, 2016, 2017, 2018, 2019
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Organisation: DECC (D11) - see all reports for this organisation
Report year: 2015 (data is from Sept 2014)
Category: Infrastructure - see all reports for this category
Description: The objective of the Parent Body Organisation (PBO) competition was to secure a reduction in costs measured against the extant baselines of Magnox and RSRL. The performance obligations associated with delivery of this objective are embodied within a Client Specification which forms the basis of the Site Licence Company Agreement (SLCA) and Parent Body Agreement (PBA). Following the application of competitive tension via the competition process, it is intended that a target cost incentivised pricing arrangement will be put in place for delivery of the performance obligations of the contract at a lower target cost as compared against the extant baselines for Magnox and RSRL. A maximum contract period of 14 years is contemplated with an initial term of some 7 years. Current anticipated funding requirements for the initial period of the contract is circa £4 Billion but this will be adjusted to approximately £2.4 Billion (the Target Cost bid for phase 1) with the addition of some reconciliation items following Due Diligence and consolidation of the contractors delivery plan. Following award of contract, there will be provision for mid-term break points at the sole discretion of NDA at low cost on two years notice. Discussions with HMG concluded that the competition should be conducted against the current Magnox baseline and the optimised RSRL baseline with the expectation of securing at least a 5% reduction as a result of competition. Contract was awarded on 1st September 2014. The final savings opportunities offered by the winning bid are of the order of 35%.
DCA (RAG): Amber/Green
DCA text: Contract now in consolidation phase and, as planned, business case and benefits realisation will be re-visited after consolidation is complete. The contract allows a period of 12 months for consolidation.
Start date: 2012-04-03
End date: 2028-03-01
Schedule text: The Start Date represents when engagement with the market began with industry days and pre-qualification. The End Date marks the completion of the scope of the Client Specification.
Baseline: £428.00m
Forecast: £390.00m
Variance: -8.90%
Variance text: The Budget values reflect the plan assured funding for Magnox, the forecast values reported here reflect the new contract now that the competition has been concluded and share transfer completed.
Whole Life Cost: £3,860.00m
WLCost text: WLC cover the costs of decommissioning the 10 Magnox and 2 RSRL sites and taking them into their Care and Maintenance (C&M) states. They also cover the costs of processing and managing the resultant radioactive and non radioactive wastes arising from decommissioning activities. Finally the WLC address the establishment of a "hub" facility to carry out surveillance, and if required maintenance ops on the sites after they enter their C&M states. The WLC figure is calculated in nominal terms.
Notes1: Magnox & RSRL PBO Competition
Notes2:
Sourcefile: IPA_2015.csv

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