Serco:ENGIE Joint Venture ‘VIVO’ awarded £810m MOD service family accommodation maintenance contracts

24th June 2021

• The new Future Defence Infrastructure Services Accommodation contracts are centred on improving the lived experience of the Armed forces and their families
• VIVO to trial smart technologies using a net zero carbon retrofit model, that will modernise accommodation and reduce environmental impact
• 20% of new job roles to be filled by those with military connection

VIVO Defence Services, 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 repairs and maintenance work for Service Family Accommodation (SFA), by the UK Ministry of Defence (MOD) Defence Infrastructure Organisation (DIO).

Following a competitive tender process, VIVO secured two Regional Accommodation Maintenance Service (RAMS) contracts under Lot 2B of the Future Defence Infrastructure Services (FDIS) programme, which is the largest facilities management procurement currently running across Europe.

VIVO will be responsible for improving the lived experience of service families in the South West and South East regions of the UK, the two largest regions that were awarded, covering more than half (60%) of the overall SFA estate.

The South West contract will maintain more than 14,000 SFA homes, covering Salisbury Plain, Gosport, Bristol, Devon, and Cornwall; while the South East region includes more than 13,000 homes across Oxfordshire, Buckinghamshire, Hampshire, London, Kent and Essex.  Both contracts are due to start in March 2022, following a mobilisation phase. 

The RAMS contracts are centred on enhancing the lived experience for service personnel and their families through proactive maintenance, increased communication, and enhanced use of technology.  DIO collaborated closely with stakeholders including three Families Federations to ensure their needs were fully considered when mapping out the scope of the contracts, which includes the delivery of core services such as planned and reactive maintenance and mandatory safety checks. 

As part of its successful bid, VIVO also pledged direct investment in modernising the service to better meet Service Family needs; and plans to pilot ENGIE’s existing net zero carbon retrofit programmes, which decarbonises and digitalises existing housing stock and estates, across select homes.

Additionally, VIVO will be offering apprentices, work placements and graduate schemes; as well as secondments for those leaving the service as part of their Resettlement plan.  20% of vacant or new roles will also be allocated to those with a military connection.

The total core value of the two contracts is estimated to be around £296m over the initial seven-year period.  There are a further three one-year extension options.  Beyond 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 MOD estimates that they are likely to be worth a further £514m over the initial seven-year term.

Commenting on the awards, Air Commodore James Savage, DIO Head of Accommodation, said: “Accommodation is such an important part of family life for Servicemen and women, which is why we collaborated closely with representatives of our Service personnel and their families to develop these contracts and ensure that their needs are fully considered.  

“These new contracts offer the opportunity to break decisively from the past and to build on the commitments made by all suppliers to innovate and deliver more responsive and flexible services to the Armed Forces and their families.” 

Colin Macpherson, Divisional CEO for ENGIE in the UK & Ireland, said: “By implementing smart and modern home technology, we plan to take a more proactive approach to maintenance, while encouraging open dialogue with families to offer peace of mind for all involved.

“Military families face many unique challenges, including uncertainty and separation.  That unsurprisingly leads to greater levels of stress and anxiety.  We have had extensive conversations with the DIO and service families and understand just how important a safe, secure, and stable home environment can be.

“ENGIE and Serco are both proud signatories of the Armed Forces covenant and are wholly committed to delivering a service that will not only support service families but alleviate any unnecessary pressures.”

Paul McCarter, Managing Director of Serco’s Defence business, said: “We are delighted that VIVO has been chosen by the MOD and the DIO to deliver improved accommodation maintenance services for the UK’s service personnel and their families. 

“VIVO combines Serco’s deep understanding of the UK’s Defence requirements and experience of the public sector with the housing and FM expertise of ENGIE.  We are excited to be working closely with the team at the DIO to deliver a step change in the maintenance of their accommodation”.

Earlier this month, VIVO was also awarded two of the four regions being tendered under Lot 3 of the FDIS programme, which supports the asset and facilities management requirements of the MOD’s built estate, with a potential total value of £3.4bn.

About the DIO framework and contracts

VIVO is also competing for seven further DIO contracts, some of which are under the same framework. Contract award announcements for these are expected to be made later this year.