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£4.4bn in contracts delayed by legal issues

The Defence Infrastructure Organisation has suspended the awarding of three contracts worth up to £4.35bn after one of the tenderers challenged a contract award.

Babcock issued a statement which said it had not been awarded any of the latest Next Generation Estates contracts by the DIO.

The remaining three Regional Prime contracts covering the South-west, South-east and Central regions were due to be awarded on 1 June, and DIO head of future procurement Matt Foley told Construction News last month the Treasury had already signed off the contracts.

The central contract will be worth between £800m and £1.8bn over 5-10 years. The South-east deal is expected to be worth between £500m and £1.2bn and the South-west deal between £600m and £1.35bn.

A DIO spokesperson said: DIO is due to award contracts for the second tranche of its prime contracts for the delivery of repair and maintenance services across the built estate. We will announce the successful bidders in due course.

“The award decision for regional primes contracts, Central, and South-east and South-west England has been formally challenged by one of the tenderers. As a consequence, contract award has been suspended. We are working to resolve the issues raised as quickly as possible to minimise any further delay.”

For the South-east, the shortlist comprises Babcock Support Services, Carillion Enterprise, KBR (Kellogg Brown & Root and Balfour Beatty Workplace JV) and PriDE (Interserve Defence and SSE Contracting JV).

In the South-west, Babcock Support Services, Carillion Enterprise and Landmarc Support Services are in contention for the contract, while the Regional Prime Central contract (covering Wales, the North, the Midlands and East Anglia) sees Axiam (Interserve Defence and DynCorp International JV), Babcock, Carillion Enterprise and KBR in contention.

Carillion/Amey beat Babcock Support Services and a joint venture between Kier and Turner Facilities Management to the £626m National Housing Prime contract covering repairs and maintenance across 49,000 military homes.

The joint venture also saw off competition from Babcock Support Services, Interserve and a joint venture between Turner Facilities Management and Henry Brothers to win the £152m Scotland and Northern Ireland Prime Contract.