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- Serco:ENGIE Joint Venture ‘VIVO’ awarded significant Defence Infrastructure contracts
Serco:ENGIE Joint Venture ‘VIVO’ awarded significant Defence Infrastructure contracts
• Estimated base value of £900m and a potential total value of c.£3.4bn
VIVO Defence Services (VIVO), a 50/50 Joint Venture between Serco, the international provider of services to governments, and ENGIE, the leading energy and services company, has been awarded contracts to provide asset and facilities management services for the UK Defence built estate by the Defence Infrastructure Organisation (DIO). VIVO has been awarded contracts for two of the four regions being tendered under Lot 3 of the Future Defence Infrastructure Services (FDIS) programme. VIVO will be responsible for providing services in the South West and Central regions of the UK, the largest two regions of the four that were competed, and which represent around 2/3rds of the MOD’s estimated value of Lot 3 of the Future Defence Infrastructure Services contracts.
The total core contract value to VIVO for the two regions is estimated to be around £900m over the initial seven-year period. There are a further three one-year extension options. In addition to the core fixed price contract for each region, there will be significant amounts of additional project work, which will be commissioned as required by the DIO, and while the future value of these projects is uncertain, the Ministry of Defence (MoD) estimates that they are likely to be worth a further £2.5bn over the initial seven year term.
The services VIVO will deliver will support the UK’s defence capability, maintaining the built estate across more than 200 sites and around 19,000 buildings. The core services include planned and reactive maintenance, as well as mandatory safety checks. The potential additional project work will range from small scale asset replacement and property refurbishments to large construction projects. Following a six-month mobilisation phase, the core work is scheduled to start in February 2022, and we expect the additional project work to ramp up during the course of 2022.
Covering the Midlands, Northern England, Wales and East Anglia, the Central region is the single largest region and includes more than 140 establishments and in excess of 12,500 buildings, with such iconic sites as Catterick Garrison, RAF Valley, RAF Cranwell and Bassingbourn Barracks.
The South West region covers Hampshire, Gloucestershire, Somerset, Devon and Cornwall, and contains more than 60 establishments and in excess of 6,000 buildings in the South West region, including MOD Abbey Wood, Bovington Camp, RNAS Culdrose and Britannia Royal Naval College Dartmouth.
Commenting on the awards, DIO’s Chief Operating Officer David Brewer said: “We are passionate about the work we do every day to support the Armed Forces and their families across the whole of the UK.
“The Future Defence Infrastructure Contracts for the Built Estate represent an increased investment in maintenance by the MOD and will offer improved response times and increase the amount of planned maintenance.
“I am pleased to announce the successful suppliers in the Central and South West regions. I look forward to working with these industry leading organisations to continue the work we are doing to improve the service we deliver for our Servicemen and women.
“The Built Estate contracts will create and sustain thousands of jobs and protect local supply chains throughout the UK.
“DIO is committed to building a broader and more diverse supply base, working with both larger companies and SMEs through our supply chain to support local industry and deliver the facilities that the military need to live, work, train and deploy.”
Sam Hockman, Divisional CEO for ENGIE in the UK & Ireland, said: “We are proud that VIVO has been awarded these two key contracts to support the asset and facilities management requirements of the MOD’s built estate. ENGIE looks forward to working closely with our partners at Serco to deliver together a high-quality, expert service which utilises our collective strengths and experience in a way that ultimately benefits the UK’s Armed Forces.
“VIVO has been specifically formed to leverage our combined strengths to meet the unique and varying needs of DIO and their many stakeholders. Beyond technical services, it will also bring the latest digital innovation and smart building technology to greatly increase the efficiency and performance of buildings. Our solution has been designed to enhance customer experience, lower operational costs and ultimately reduce carbon emissions.”
Paul McCarter, Managing Director of Serco’s Defence business, said: “We are delighted that VIVO, our joint venture with ENGIE, has been awarded these two important contracts to look after the MOD estate in the South West and Central regions of the UK. Our team will be working to maintain a total of around 19,000 buildings on 230 sites across the two regions and we understand the importance of these facilities to the UK Armed Forces’ operational capability.
“Serco has been supporting the UK Armed Forces for over 50 years and this experience has given us a deep understanding of their requirements. We are grateful to the MOD and the Defence Infrastructure Organisation for the trust they are placing in us and we look forward to working with them.”
About the DIO framework and contracts
VIVO is also competing for two further DIO competitions being run under the same framework, covering Regional Accommodation Maintenance Services and for Training Estate Services. Contracts award announcements are expected to be made for each of these later this year.