DynCorp's bid for the UK's Defence Support Group, which provides maintenance and repair services, is part of the company's effort to expand its global business. (UK Defence Support Group)
LONDON — DynCorp International has stepped up efforts to grow its global business with the opening of a new company based in London focused on taking a share of the military support services market here.
The company has already been named by sources as a bidder for the Defence Support Group (DSG), the British government-owned military vehicle repair and upgrade company, and is actively looking at other support services opportunities here.
DynCorp President Chris Bernhardt, in London for the opening of its operations here, declined to confirm whether the company was among as many as nine bidders looking to acquire the DSG operation from the Ministry of Defence.
The US company alongside Babcock, KBR, General Dynamics, Northrop Grumman, JCB and others were placed on a bidder list drawn up by the MoD earlier this month, said sources.
Analysts reckon a winning bidder will have to pay between £200 million and £300 million (US $330.9 million to $496.3 million) to purchase DSG.
DSG is central to the British military’s armored vehicle and small arms maintenance, repair and upgrade operations but is being sold off by the Conservative-led coalition government ahead of the next election in May 2015.
Aside from the DSG bid, DynCorp is also bidding in a joint venture with Interserve on a major regional military facilities management deal here. Selection of a winning contractor is expected soon.
DynCorp is part of a joint venture with local support services company Babcock undertaking facilities management for the military but that deal is coming to a close.
Continuing British defense budget pressures and a general transformation effort including big cuts to military personnel numbers are expected to provide new opportunities for contracting out services.
The market here is currently dominated by Babcock, Serco, Interserve, KBR and others.
The US support services provider has taken a big hit to its revenues as a result of reduced business in Iraq and the military drawdown of forces in Afghanistan, and recently reported 2013 turnover falling to $3.3 billion from $4 billion the previous year.
Bernhardt said part of the company strategy to grow the business in the wake of a drawdown was the expansion of the recently created DynCorp Global business.
The company has already set up a hub in Australia to address local and regional Asian markets and is now replicating that in the UK.
“We already maintain some 200 types of aircraft and 80 types of military vehicles at more than 100 locations around the world, so we will focus on opportunities to use this experience in the UK. Secondly, we will capitalize on our long record of building and operating facilities both in home base areas and hazardous locations overseas,” said Bernhardt.
The London-based operation is also aiming at commercial support services opportunities in Europe and Africa.
DynCorp said in a statement Mar 27 it intends to focus its UK operation on land and aviation markets, facilities management in the UK, on deployed operations, logistics and site operations, and training and mentoring.
The company also said it saw opportunities for business as the UK armed forces moved towards a contingent posture post Afghanistan which means “support is needed across all aspects of military life, with services deployed rapidly, to any location, and at scale.”