Public procurement notice: Contract Award Notice
Published: 2019-02-14
Buyer: Banedanmark
Country: DK
Contract type: Supplies
Procedure: Contract award without prior publication
CPV classification: 34632000 | 34632200 | 34632300 | 34943000 | 45234115
Estimated value: 34500000 EUR
Award criteria: The most economic tender
EU fund: CEF

Technical requirements: In January 2009 the Danish Parliament decided to fund a 18 000 000 000 DKK replacement programme of renewing all Danish railway signaling by the end of 2021 — both on the mainlines and regional lines (Fjernbane) and on the Copenhagen S-bane (S-bane).
This notice regards the Fjernbane onboard ERTMS equipment, which was subject to a call for competition (2010/S 39-057712). The Framework Agreement was signed with the consortium Alstom Danmark A/S and Alstom Belgium S.A (Hereinafter Alstom).
The Signaling Programme consists of 4 main contracts of which 1 covers the S-banen and 3 covers the F-banen (Fjernbanen), 2 for the infrastructure work (divided in an east and west lot) and 1 for the onboard work (the contract covered by this notice).
The contract concerns the design, installation and maintenance of onboard signaling equipment based on ERTMS on a number of classes of rolling stock as further described in Contract Notice 2010/S 39-057712 and in the tender material.
During the term of the contract a number of issues have arisen, primarily the contract has been delayed, which means Banedanmark and Alstom has had to change some of the provisions of the contract in order to allow for the work to be completed. In addition, the parties have had contractual disagreements and have conducted negotiations on the events that have occurred in the project and the effects hereof. The parties have agreed to settle the contractual disagreements in order to focus on a timely and correct execution of the contract for the benefit of the passengers and the railway operators. The parties have agreed on a new time schedule for the fitment of the Danish rolling stock with ERTMS. The new schedule is within the deadlines for fitment of rolling stock as laid out the Banedanmark’s Anlægsplan (https://www.bane.dk/da/Borger/Publikationer/Anlaegsplan). As part of the changes, the Parties have settled a number of contractual claims and change requests raised by both sides, including claims for delay. Banedanmarks claims for delay has been settled at an amount of 16 250 000 EUR. Alstom has agreed to accept an overall increase in the financial exposure of Alstom of 5 000 000 EUR in order to incentivize Alstom further to comply with the new schedule. Banedanmarks claims for extra time out of service for rolling stock has been settled at an amount of 1 000 000 EUR, and going forward Alstom shall reimburse Banedanmark for actual cost incurred for extra time out of service. Banedanmark has agreed to settle a number of change requests related to claims from Alstom for lack of information on specific classes of rolling stock in the original tender and has increased the payment with 17 500 000 EUR under the contract for these issues according to the provisions on changes in the contract. The Parties have agreed that Alstom shall deliver a new software release (based on SRS 3.4.0) for an amount of 4 500 000 EUR and, free of charge, correct any anomalies identified until a certain date. Finally, the Parties has agreed on a bonus scheme, which under specific criteria shall allow Alstom to earn bonusses based on the progress of the fitment of the rolling stock. The total value of the bonus scheme is potentially 12 500 000 EUR. The bonus scheme is tied to milestones which are important to the overall progress of the Signaling Programme to further incentivize Alstom.
The contract has originally been drafted to allow for flexibility to a large extent, as this contract covers the task to install ERTMS in an aging fleet over a long period of time. The changes have been based on using the flexibility already allowed for in the contract, but in some cases it has been necessary to perform actual changes of the contract as certain circumstances could not be handled under the provisions of the contract, e.g. the bonus scheme and the increased financial exposure of Alstom.
The Project receives financial support from the Connecting Europe Facility programme (CEF). CEF supports the development of the Trans-European Transport Networks (TEN-T). The Project addresses the priority European Rail Traffic Management Systems (ERTMS).
Banedanmark does not consider the changed provisions to constitute a substantial change. Banedanmark bases this on several factors but most notably (not in order of importance):
1) The changes to the provisions of the contract would not have allowed other participants in the tender procedure had they been included originally;
2) The changes to the provisions of the contract would not have affected the outcome of the tender procedure had they been included originally;
3) The changes of the provisions of the contract do not shift the economic balance of the contract in favor of Alstom in a way which was not provided for in the contract (Banedanmark considers the changes to the contract to be neutral) and
4) The changes of the provisions of the contract do not expand or extend the scope of the Contract. Based on this Banedanmark does not consider the change to be substantial, cf. Article 89, paragraph 1, litra e) and paragraph 4 of the Utilities Directive (2014/25).
As mentioned, the contract allows the flexibility which was considered needed at the time of tender. Certain circumstances have changed in a way which was not and could not have been foreseen, and Banedanmark does thus also not consider this to be a substantial change, as,
(b) the changed provisions of the contract do not modify the overall nature of the contract. Based on this Banedanmark considers that the change is also allowed under Article 89 paragraph 1, litra c) of the Utilities Directive (2014/25).
The changed provisions effect the main part of the delivery of the contract, and if Banedanmark where to re-tender the project this would mean that either the work performed by Alstom would have to be replaced or Banedanmark would have several different solutions. In addition, a re-tender of the contract would mean a massive delay of the Signaling Programme. Additionally, Banedanmark has investigated similar European projects in order to establish the current price level, and it is Banedanmark’s conclusion that the price level has increased considerably since the contract was awarded. This would mean Banedanmark would incur vastly increased expenses and delays. Banedanmark estimates that a re-tender would result in a delay of at least 24 months, which is based on the absolute minimum time it would take to do a new procurement process. In addition, a new supplier would have to provide a design before installation can start and based on experience this could take several years. Banedanmark estimates that the increased expenses would be in the range between 130 000 000 and 270 000 000 EUR (increased costs from the contract, costs related to the infrastructure contracts, costs related to extension of the Signaling Programme and possible other costs related to the infrastructure, e.g. immunization of certain lines). Based on this Banedanmark considers that the change is also allowed under Article 89 paragraph 1, litra b) of the Utilities Directive (2014/25).


Winner: Alstom Transport Danmark A/S
Award value: 34500000
Number of bids: 1