Capita sign

MoD Suspends Capita Contract Over Serco Challenge

It's emerged that the Ministry of Defence has suspended a contract with Capita, which provides firefighting on military sites.

Capita sign

A Capita sign outside their offices in Bournemouth, Dorset, in January 2018 (Picture: PA).

It's emerged that the Ministry of Defence (MoD) has suspended a contract with an outsourcing company, Capita, which provides firefighting on military sites.

The decision comes just after Capita's rival company, Serco, began a legal action against the move to handover a £500million contract.

Capita's share prices fell 2.6% following the revelations on Monday. 

In June, the company won the contract in a major boost to its restructuring by a new chief executive, Jonathan Lewis.

Serco has confirmed that it is currently undertaking a legal action over the contract but refused to comment any further.

A spokesperson for the MoD said: “We can confirm that we have received notification of a legal challenge to the contract award for the outsourcing of the Defence Fire and Rescue Service to Capita.

"The contract award has been suspended until the legal challenge to the procurement is resolved.

"It is not uncommon for there to be procurement challenges.”

Capita said it will remain fully committed to the contract and would continue to work with the MoD on the matter.

A spokesperson for Capita, said: “The MoD selected Capita as the winning tenderer for the Defence Fire and Rescue Project.

"This award was based on a rigorous evaluation process that assessed Capita’s proposition as being the Most Economically Advantageous Tender, including quality, technical merit and value.

“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.”

Suspended, But For How Long?

By Laura Makin-Isherwood, Westminster correspondent, Forces News

Jonathan Lewis was appointed Chief Executive Officer on 1 December 2017 (Picture: Capita).

Capita is no stranger to the headlines when it comes to defence news.

As a long-time contractor for the MoD, and having been awarded some big wins in recent years, its performance is routinely scrutinised.

But their success with the Defence Fire and Rescue Service contract last month raised more than a few eyebrows.

As the first time the Service had been outsourced to the private sector, it was always going to be controversial.

Workers unions immediately raised concern over jobs, and questioned why the UK decided to privatise when the US does not.

But there was also concern about Capita’s suitability, given the MoD made this decision just months after the company was stripped of a different MoD contract managing the military estate, and all in the very same year that Capita issued a profit warning.

Capita will have gone through a rigorous award process to get to this point, and the MoD will be no stranger to this kind of legal challenge.

But who knows how long this process pause will be.