MoD suspends Capita contract after rival Serco challenges choice

LONDON (Reuters) – Britain’s Ministry of Defence (MoD) mentioned it had suspended a contract for outsourcing group Capita to supply firefighting providers on army websites after rival Serco started a authorized problem to the choice.

FILE PHOTO: An illuminated signal is seen in Capita places of work in London, Britain, January 31, 2018. REUTERS/Toby Melville/File Photo

Capita beat Serco in June to win the contract in a serious enhance to the company which is being restructured by its new chief government, Jonathan Lewis.

Serco confirmed that it was taking authorized motion over the contract however declined to remark any additional. Capita mentioned it remained absolutely dedicated to the contract and would proceed to work with the MoD on the matter.

“The contract award has been suspended until the legal challenge to the procurement is resolved,” a MoD spokesman mentioned. “It is not uncommon for there to be procurement challenges.”

The government mentioned in June that the contract would ship a extra fashionable and agile service and added that it had made strong assessments of the monetary well being of its suppliers.

The Financial Times reported in June that Capita was given the very best doable danger score in an inner ministry evaluation, shortly earlier than being handed the brand new contract.

The award of the contract had provoked a pointy rebuke from commerce union Unite, which mentioned key providers together with these in warfare zones shouldn’t be farmed out to personal firms.

The fireplace contract was the primary main deal awarded by the government because the collapse of Carillion, a building and outsourcing associate to the government which went out of business in January, rocking the sector.

Its demise has prompted Britain to have a look at tightening contract phrases for personal firms working within the public sector over the following 12 to 18 months.

Capita, which offers technology-led providers for the private and non-private sector, has additionally run into issues after chasing contracts on slim margins, leading to a string of revenue warnings and a rights challenge.

Capita mentioned it had received the MoD tender following a rigorous analysis course of. “Capita remains fully committed to the future delivery of the Defence Fire and Rescue Project and will continue to support the MoD on this matter,” it mentioned.

Reporting by Arathy S Nair in Bengaluru and; Kate Holton in London; Editing by Keith Weir and Louise Heavens

Our Standards:The Thomson Reuters Trust Principles.

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