The HSTs were not EMRs flagship fleet, at least not since the 222s arrived. They were taken out of service well before the 810s were due.
Retiring the 180s without replacement, and having (some of) the 222s leave before the 810s are in service, on the other hand.
Somebody will correct me if I'm misremembering, but I think full length HST could not keep up with the new timetable when EMR Connect was launched.
So the option was to keep a fleet of shorter HSTs that still did not comply with accessibility regulations that were by this point 10 years old.
Hindsight, and Scotrail and GWR's experience, suggests that keeping a small fleet of short HSTs would also have been problematic.
As Trainbike46 notes, if HSTs had been kept, they'd almost certainly have gone when the 180s did.
you don’t want the penalties set so high that the contractor goes bust and leaves you with nothing forever.
My experience bidding work is that excessive penalties will be a show-stopper during internal governance and we would not submit a bid. If all suppliers come to that conclusion, there's no bids, a failed procurement and a significant delay as the client re-runs the procurement.
Or, as Bald Rick says, you may get bidders that are absolutely desperate for the work because they need the cashflow to remain solvent (the Carillion problem).
If a client finds that it's down to the last supplier, then it's the supplier that will start to dictate terms.
Closing train factories/redundancies because of all this is also politically challenging.
EMR and their DfT stakeholders would not have wanted any of this to happen.