Financial watchdog begins investigation as Harmon’s lawyer demands £12m damages.
The House of Commons is conducting an internal inquiry into the way the new £250m MPs’ building was procured.

The review comes after a court case in which the House of Commons was successfully sued by US cladding contractor Harmon because it picked a more expensive British rival for the cladding contract at Portcullis House.

The investigation has been ordered by the House of Commons Commission, which runs financial affairs. The cost of the building works out at £1.2m per MP.

Committee secretary Malcolm Jack confirmed that Sir Thomas Legg QC, who conducted the government inquiry into arms for Sierra Leone in 1998, was undertaking the investigation. Jack said the inquiry started after the court case in November, adding that it would look into the whole issue of procurement. However, another spokesman said it would focus on the procurement of the cladding.

In his 300-page ruling on the Harmon case, His Honour Judge Humphrey Lloyd accused the Commons of adopting a buy-British policy, in breach of European procurement rules.

Judge Lloyd said Andrew Makepeace, the House of Commons’ project sponsor, did not explain satisfactorily why the Commons was not awarding the contract to Harmon. He described his evidence as disingenuous and disquieting.

Wragge & Co, the law firm that represented Harmon, is claiming £12m for loss of profit on the £30m-plus contract. “This seems a lot but there was a lot of risk and liability in the contract, especially as the specification asked for a 120-year lifespan,” said Wragge partner Ashley Pigott. Pigott welcomed the internal review, and hoped that the results would be published. “While I am only interested in getting money for my client, someone has to be accountable because it is taxpayers’ money,” he said. It is understood that the Commons has not appealed against Judge Lloyd’s decision. A further hearing to settle the value of the claim has been scheduled for 15 March.

Portcullis House, which is due to be completed in August, has been plagued by controversy since plans were approved for the office in 1992, when it had a budget of £165m. QS Northcroft was invited to scrutinise the handling of the project 12 months ago. The review confirmed that MPs wanted an expensive, high-specification building.

The design of the building has been criticised recently. MPs have said they think that the black roof and chimney are too dark. It is understood that a team of contractors is working on one section to try to lighten it.