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Protest Delays Estate Management Contract Award

Jun. 13, 2014 - 12:41PM   |  
By ANDREW CHUTER   |   Comments
Service accommodations are shown at Woolwich, southeast London. A protest has delayed award of a series of UK estate management contracts.
Service accommodations are shown at Woolwich, southeast London. A protest has delayed award of a series of UK estate management contracts. (MoD/Crown Copyright)
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LONDON — The award of a series of large estate management contracts by the UK Ministry of Defence has been held up after one of the losing bidders filed a last-minute protest against the selection of rival support services company Carillion.

The Defence Infrastructure Organisation (DIO), the arm of the MoD that manages the British military’s bases, training ranges and other estate assets, last week prepared to announce that Carillion and its partner, Amey, had swept the board and been selected to undertake the three significant regional estate management contracts on offer, according to industry insiders.

That announcement is now on hold following a protest by one of the losing bidders.

The legal challenge came to light earlier this week when Babcock, one of the bidders, put out a statement which said that following a legal challenge the company discussed the situation with the DIO and “concluded that Babcock will not be awarded any of the contracts.”

Other bidders for the second tranche of the Next Generation Estate Contracts (NGEC) included support services companies KBR and Interserve.

Several executives pointed to Interserve as the company that had lodged the legal challenge. The protest was related to pricing, they said.

A spokesman for Interserve said the company “hasn’t got any comment” when asked whether they were behind the challenge.

A DIO spokeswoman confirmed a challenge had been filed at the end of May to a contractor selection and it was now being investigated.

“I can’t say who and I can’t say why. We don’t have a specific date [for a decision on the challenge],” she said.

Under European procurement rules, losing contractors have 10-day commercial standstill periods to lodge any protest after being briefed by the MoD on why their bid was unsuccessful.

At stake are regional estate management deals covering southeast England, southwest England and the north of England, Wales, the Midlands and eastern England.

The arrangements cover primarily hard facilities and asset management services across the three regions.

The now contested selection of Carillion and Amey for the latest tranche of estate contracts follows hard on the heels of an announcement in early May that the two companies had secured a similar regional contract covering military bases and other defense facilities in Scotland and Northern Ireland.

They were also handed a separate contract covering accommodation maintenance services across the UK.

Separately, Interserve subsidiary Landmarc Support Services secured a £322 million (US $541.5 million) deal to manage the MoD’s training estate until 2019 — an extension of a deal it first secured in 2003.

Together, the NGEC contracts are reckoned to be worth more than £5 billion over 10 years, according to a UK government website.

Last week, it also emerged that an announcement that General Dynamics UK had been selected to undertake upgrade work on British Army Mastiff armored vehicles had been delayed by a legal challenge from rival bidder Morgan Advanced Composites.

Investigation of that protest is continuing, said an MoD spokeswoman.

Email: achuter@defensenews.com.

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