Capita wins 400 million pounds contract to tag UK criminals

LONDON Tue Aug 20, 2013 8:06am EDT

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LONDON (Reuters) - Britain's largest outsourcing company Capita (CPI.L) announced a 400 million pound contract to tag criminals on Tuesday, benefiting from an overcharging scandal that engulfed rivals G4S and Serco.

The firm said it had been selected by the Ministry of Justice as the preferred bidder for a six-year deal to put electronic tags on offenders released from prison and to roll out the system nationally for the first time.

Both G4S (GFS.L) and Serco (SRP.L), the two outsourcing companies which had held the previous contracts since 2005, pulled out of the bidding on a new deal earlier this year after an audit showed they had charged for tagging criminals who were either dead, in prison or never tagged in the first place.

Capita said that as part of the contract it would provide two monitoring centers, a field force and integrate all the IT systems which will be procured separately.

"When fully live, this is expected to be the largest, single and most advanced "tagging" system in the world," Chief Executive Paul Pindar said.

The firm added that the system has been designed to enable other government bodies like the probation services, currently looking to put out 500 million pounds worth of contracts, to procure related services.

Britain's authorities have stepped up their scrutiny of their biggest suppliers, with four separate investigations and reviews currently underway. The government has also set a target of giving 25 percent of its work to small and medium-sized firms.

The National Audit Office is currently looking at Capita, along with Serco, G4S and French firm Atos (ATOS.PA), as part of its review of how government handles its relationship with its largest suppliers. It is expected to report in November.

Shares in Capita, which are up 31 percent so far this year, compared to the wider FTSE 100 which is up 20 percent, were down 0.51 percent by 0730 ET.

(Reporting By Christine Murray; editing by David Evans)

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