Amec’s legal battle to reduce the amount it must pay of a £93.6m cost overrun on a nuclear submarine jetty contract at Faslane has failed.
Now Amec and partners Morgan Sindall face a huge bill as they hammer out with the Ministry of Defence what proportion of cost overruns were properly incurred on the troubled project.
A costly legal battle has been running as both firms struggled to finish the Faslane SSN Berthing Project, first revealed in the Enquirer, more than four years late and at an expected final cost of £235.7m.
When the project was first awarded Amec was sole contractor for the jetty. But after Morgan Sindall acquired Amec’s construction arm for £26m back in 2007, the job became a 50:50 joint venture between the two firms.
Under the terms of the contract, the contractors are liable to pay the first £50m of overruns on the agreed maximum target price for the job, which has itself already risen from £89m to £142m.
This element was not challenged in the latest legal contest, but Amec held that the remaining £43.6m cost overrun should be split between client and contractor, with Amec due any costs howsoever incurred.
An arbitration panel rejected this saying the only costs payable were the actual costs reasonably and properly incurred within the contract.
A High Court judge has now refused Amec’s attempt to appeal this decision in a written ruling this week upholding the arbitration decision.
Source – Construction Enquirer
The Babcock & Wilcox Company has been awarded more than $510 million in contracts to supply the U.S. military with nuclear components, the firm announced this morning.
The work, which will include making nuclear power systems for submarines and aircraft carriers, will be performed in part at B&W’s Nuclear Operations Group, which is headquartered on Mt. Athos Road.
Facilities in Barberton, Ohio; Euclid, Ohio; and Mt. Vernon, Indiana also will participate. The work began in January and will last eight years, B&W said.
B&W said more than $445 million of the $510 million figure was issued as options under a 2010 contract worth $2 billion, while more than $65 million was issued under a new fiscal-year 2013 agreement. However, the total amount was appropriated in the fourth quarter of 2012.
Source – News Advance