By Li-mei Hoang
LONDON, March 10 The British government named
outsourcer Capita as the preferred bidder for a 10-year,
400 million pound ($669 million) contract to manage its military
estate on Monday, gaining an edge over rival Serco.
The move comes as a blow to embattled rival Serco, which had
hoped to win the contract to help ease fears over the state of
its relationship with the British government following a series
of high profile contract failures.
The Ministry of Defence instead said it had chosen a
consortium, led by Capita, as the front runner to work on
overhauling the 21-billion pound Defence Infrastructure
Organisation (DIO) which accounts for 1 percent of the country's
"Working with a strategic business partner will bring in
private sector expertise ... and deliver value-for-money and
potentially hundreds of millions of pounds of savings for the
taxpayer," said Defence Secretary Philip Hammond in a statement.
The Ministry of Defence said the contract has the potential
to deliver substantial savings of up to 300 million pounds a
year from the DIO's 3.3 billion pounds annual running costs.
Capita, which runs services ranging from the Ministry of
Defence pension scheme to police radio systems, will work with
American engineer URS and PA Consulting to manage the
DIO's 230,000 hectare estate encompassing barracks, airfields
and weapons ranges.
"The partnership will help to unlock the knowledge, skills
and resources that already exist within the DIO, while adding
capability to tackle the significant cost-saving targets
currently facing the Ministry of Defence," said Capita Chief
Executive Andy Parker. ($1 = 0.5981 British Pounds)