Construction News

Fri January 28 2022

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£4bn of MoD contracts held up by legal challenge

10 Jun 14 More than £4bn-worth of Ministry of Defence facilities management work is being delayed by legal wrangling, Babcock has revealed as it announced its exit from the race.

Management of Horse Guards is part of the £1.2bn Regional Prime South East contract
Management of Horse Guards is part of the £1.2bn Regional Prime South East contract

Two years ago the Defence Infrastructure Organisation (DIO) announced its shortlisted contractors for three regional contracts representing tranche 2 of its Next Generation Estates Contracts. Contract award was expected in April 2014, with work starting this year.

However, one of the shortlisted bidders – reportedly Interserve – has lodged a legal challenge to the award process, which is holding up the signing of a deal.

Another of the bidders, Babcock, has announced that it is no longer in the running and has revealed the legal action that is delaying the contract award.

In a statement Babcock said: “Following a legal challenge that is delaying the announcement by the Defence Infrastructure Organisation (DIO) of the outcome of Tranche 2 of the Next Generation Estates Contracts, Babcock has discussed the situation with the DIO and has concluded that Babcock will not be awarded any of the contracts forming part of Tranche 2.”

The contracts have an estimated combined value of up to £4.35bn over a minimum of five years and a maximum of 10 years. Individual contract values range between £500m and £1.8bn, depending on potential contract extensions.

Related Information

The companies annoiunced on 28th June 2012 as shortlisted for each contract were:

Regional Prime Central - £1.8bn  (including Catterick Garrison, Beacon Barracks Stafford, RAF Shawbury and RAF Valley training bases, DST Leconfield, Wattisham Airfield, RAF College Cranwell, and the intelligence and security centre at Chicksands):

  • Axiam – a joint venture of Interserve Defence and DynCorp International
  • Babcock Support Services
  • Carillion Enterprise – a joint venture of Carillion Services and Enterprise Managed Services (since taken over by Amey)
  • KBR – a joint venture of Kellogg Brown & Root and Balfour Beatty

Regional Prime South East - £1.2bn (including RMA Sandhurst, DMRC Headley Court, HQ Land Forces Andover, Hyde Park Barracks, Woolwich Barracks, Horse Guards, RAF High Wycombe and RAF Northolt):

  • Babcock Support Services
  • Carillion Enterprise (Amey)
  • KBR
  • PriDE (SERP) – a joint venture of Interserve Defence and SSE Contracting

Regional Prime South West - £1.35bn (including various Royal Marines bases, RNAS Yeovilton, RNAS Culdrose, Defence Equipment and Support (DE&S) headquarters):

  • Babcock Support Services - a division of Babcock International Group plc)
  • Carillion Enterprise (Amey)
  • Landmarc Support Services   –  wholly owned by Interserve plc and Computer Sciences Corporation (CSC).

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