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Contract News Update

Date: 11 May 2010

Smaller and medium-sized contract wins are fundamental to Serco's growth and value creation, and this release updates on a selection of signed contracts and preferred bidder appointments so far in the first half of 2010, valued in aggregate at over £650m.

Scottish electronic monitoring contract extension

Scottish Government Ministers have approved a two year extension to 31 March 2013 to Serco's Electronic Monitoring contract for the whole of Scotland. The extension is valued at around £10m.

Health services for the NHS Norfolk Prison Cluster

Serco has been selected as preferred bidder by NHS Norfolk to provide integrated health services for the Norfolk Prison Cluster. The contract, which will cover three prisons in Norfolk, will, when agreed, further enhance our status as the UK's leading provider of managed health services in secure accommodation. Working with us on the contract will be Norfolk Community Health and Care, the local NHS community service provider, Turning Point, a leading social care organisation, and Partnerships in Care, a leading provider of medium secure mental health hospitals.

Communications technology for Scottish highways

Serco has been awarded a five year contract with a value of up to £12m by Transport Scotland to renew communications technology on the Scottish Highways network. The contract is to provide technology including CCTV and Variable Message Signs (VMS), and as part of the contract, we will also be replacing older style roadside emergency phones.

CCTV for Transport for London

Serco has been appointed by Transport for London to deliver a new digital CCTV surveillance system and infrastructure, with a value of up to £4m. Under the contract, Serco will migrate the existing CCTV traffic monitoring and enforcement network from analogue to digital across some 1,000 camera sites in London, designing, developing and implementing the new digital surveillance system and migrating it in a controlled manner to ensure units remain operational. The contract positions Serco for other opportunities as legacy CCTV systems migrate from analogue to digital, and further expands our existing strong relationship with Transport for London.

Yarl's Wood Immigration Removal Centre contract extension

Our contract to operate, manage and maintain the Yarl's Wood Immigration Removal Centre on behalf of the UK Border Agency has been extended for a further three years from April 2010 to April 2013. The extension is valued at around £32m.

New European Space Agency contracts

The European Space Agency (ESA) has announced Serco as preferred bidder for two contracts worth up to Euros95m over 5 years, strengthening our position as a leading provider of services to Europe's space and technology agencies. Under the first contract, Serco will lead a consortium, which includes Logica, Orange and Infoterra, to provide operations and maintenance capabilities to ESA's Earth Observation programme - the first time that ESA has procured these services through a single contractor. The second contract is an expansion of our existing manpower services contract to cover engineering and management support for the ESA Earth Observation payload data ground segment.

ICT support to the European Medicines Agency

The European Medicines Agency (EMA) has awarded Serco a four year contract, valued at Euros7m, to provide information and communications technology (ICT) support to up to1000 staff at their London headquarters, as well as a larger stakeholder community at various locations through-out Europe. EMA is responsible for the protection and promotion of public and animal health through its evaluation and supervision of medicines for human and veterinary use.

Support Services for Starwood Hotels Group

Starwood Hotels Group, owner of some of the world's most prestigious hotels, has appointed Serco as preferred bidder for a £7m contract to provide a range of support services to the Sheraton Grand in Edinburgh, the Westin in Dublin and the 5 star Turnberry resort on Scotland's west coast. The contract, which has a 5 year term, is an extension to services already provided to other hotels in the Starwood Group and includes buildings maintenance and security, engineering support and help desk services.

Together for Disabled Children contract extension

The Serco-led Together for Disabled Children partnership has been awarded a one year contract extension from April 2010. The partnership supports the UK government's Aiming High for Disabled Children programme, specifically around short breaks and parent participation. In addition, a pilot to improve disabled children's access to childcare (DCATCH) across ten local authorities will now be rolled out nationally as part of this contract extension. The total value of the extension, including DCATCH, is £5m.

Information and communications technology (ICT) support for Enfield

The London Borough of Enfield has named Serco as preferred bidder for a contract to deliver an enhanced range of ICT services worth an estimated £40m for up to 9 years. The contract is due to commence in the autumn and is expected to improve efficiency and service outcomes for both Council employees and the citizens of Enfield, for example by unifying communications services and providing technologies that enable the council to personalise services for citizens.

Information and communications technology (ICT) support for Regione Lombardia

Serco will be providing ICT support to the Consiglio Regionale (Regional Council), the elected legislative assembly of Regione Lombardia, based in Milan, Italy. The contract is for six years, with a value of Euros2.3m.

Operational support to two UK RAF bases

Serco has signed a Multi-Activity Contract (MAC) to provide services at RAF High Wycombe and RAF Halton. We have provided services including management and administration, general engineering and military transport, at RAF Halton since 1997. With this contract, we will now have a presence at RAF High Wycombe, which is the home of Headquarters Air Command. The combination of services at both sites will provide us with the ability to deliver synergies across both stations through an innovative and flexible solution. The combined seven-year contract (with an additional three option years) is valued at up to £100m over the full 10 years.

Management of the Emergency Planning College

Serco has secured a contract worth more than £55m over 15 years to manage and operate the Emergency Planning College (EPC) on behalf of the Cabinet Office, placing Serco at the heart of UK civil resilience. As commercial partner to the Cabinet Office, we will provide and manage all services at the EPC, including training delivery and support, sales and marketing, finance, estate management, ICT and security. Our focus will be on both growing the business and enhancing its reputation as the UK's leading provider of emergency planning training. We will also take a lead role in establishing and maintaining professional standards for emergency planning.

New radar for the renewable energy market

Serco has signed a new contract with the UK Ministry of Defence, valued at around £20m to Serco over two years, which will help the UK tackle climate change through enabling greater use of off-shore renewable wind energy. In the capacity of prime contractor, Serco will work with Lockheed Martin in the US to introduce the Lockheed Martin TPS-77 radar technology, which is resistant to interference from wind farms, into the UK Air Defence System at Remote Radar Head (RRH) Trimingham, on the north Norfolk coast. This will remove a significant obstacle to the roll out of off shore wind power in the UK.

Safety advisory contract for new UK Civil Nuclear programme

Westinghouse, designer of the AP1000 nuclear reactor currently under assessment for the UK's civil nuclear programme, has appointed Serco as its lead nuclear safety adviser in the UK. Serco's role will be to lead a team of experts to assist Westinghouse in completing Step 4 of Generic Design Assessment (GDA) for the AP1000, a critical stage in the reactor design approval process being conducted by the UK Nuclear Regulators which is due for completion in 2011. The contract is of strategic importance to Serco, coming as it does at the beginning of a new era of nuclear energy in the UK.

Operational support at RAF Menwith Hill

A consortium including Serco has been appointed by the US government to a renewed and enlarged five year contract to provide operational support at RAF Menwith Hill, worth £10m to Serco. The contract has been awarded to a consortium led by Raytheon, and including Serco, Lockheed Martin, Northrop Grumman and General Dynamics. In total, the contract involves support across multiple global locations with Serco providing skilled manpower at RAF Menwith Hill, including system engineers, project managers, system integration and planning, architecture & analysis, metrology, phone technicians, network engineers, IT support, hardware and software support, admin support, graphics and mechanical engineers. RAF Menwith Hill is an integral part of the US Department of Defense world-wide defence communications network, whose primary mission is to provide intelligence support for UK, US and allied interests.

Woolwich Ferry contract extension

Serco has secured a 15 month contract extension to its existing 18 month contract to operate London's Woolwich Ferry. The extension is valued at approximately £9m.

National Physical Laboratory contract wins

The National Physical Laboratory (NPL) has won contracts valued at more than £6m in the year to date. These include a 3 year (with possible 1 year extension) framework contract, valued at around £0.6m, with the Environment Agency to carry out environmental measurements of pollutants released in to the atmosphere from UK power stations, incinerators, landfill sites and production processes. It is expected that there will be opportunities for further additional technical auditing and quality assurance work on an ad-hoc basis.

Other contracts secured include extension funding for the seventh year from the Technology Strategy Board (TSB) to manage part of the Digital Systems Knowledge Transfer Network (KTN) until March 2011. On the back of this, NPL has won a further contract to support the TSB in their new responsibilities for space technology for navigation. Other contract wins include a new contract to help ensure the safe and reliable performance of spacecraft components for the European Space Agency, a project to pioneer a more specific diagnostic method to identify breast cancer in young women using enhanced through-transmission ultrasonic tomography, and a project know as ACES (Advanced Capacitors for Energy Storage), which aims to develop new capacitive boost technology for mass-market hybrid vehicles.

Appointment to US$1.3bn US Army HRsolutions IDIQ

The US Army has awarded Serco an indefinite delivery, indefinite quantity (IDIQ) contract to compete for task orders under the HRsolutions Program Office for the Studies and Analysis contract. The contract will support the Assistant Secretary of the Army (ASA) Manpower and Reserve Affairs (M&RA). Under this contract, Serco will have the opportunity to compete for work in areas such as business planning, and research and evaluation, including process re-engineering, policy analysis, manpower planning, training and development, policy development, proof of concept studies, program analysis, predictive modeling and risk management and mitigation. Serco is among 12 awardees on the US$1.3bn IDIQ contract which has a five year term, comprising a one-year base period and four one-year option periods.

FAA Air Traffic Control contract

Serco has been awarded a contract to support the Federal Aviation Administration (FAA) Contract Tower Program. Under this contract, Serco will provide air traffic control services at 64 sites in the United States and Pacific region. The contract is valued at approximately US$170m over 5 years. Since 1994, Serco has managed approximately 55 towers. Through this contract win, Serco will now be responsible for a total of 64 sites spread across the western United States and Alaska, including new locations in Hawaii, Guam and Saipan. Serco will provide air traffic control services in these towers to support the safety of incoming/outgoing aircraft, improve the efficiency of air traffic and provide information and support to the pilots.

Georgia Department of Transportation contract

Serco has been awarded a contract with the Georgia Department of Transportation (GDOT) to provide comprehensive management, installation, and maintenance of the department's intelligent transportation system. Serco will be responsible for maintaining over 2,500 Intelligent Transportation devices that assist motorists and Emergency Responders throughout the Atlanta Metropolitan market. This new contract has an expected value of US$50m over five years. Under the contract, Serco will manage the camera systems, video and presence detection systems, ramp metering systems, changeable message signs and structures, and the maintenance of hub buildings which house and protect the backbone devices of the entire system. The intelligent transportation system is used to provide motorist assistance, traveler information, enhance safety, mitigate congestion, and reduce carbon emissions.

US Navy hazardous materials contract

Serco has renewed its indefinite delivery, indefinite quantity (IDIQ) contract with the US Navy's Commander, Fleet and Industrial Supply Centers to provide support for the procurement, management, issuance and disposal of HAZMAT products and chemicals. The contract has a six-month base period with three one-year option periods and is valued at approximately US$84m, inclusive of the options.

Air Force Materiel Command (AFMC) Depot Maintenance task order

Serco received an AFMC task order under the Consolidated Acquisition of Professional Services (CAPS) contract to support the depot maintenance management oversight program. This task order is a recompete, but more than doubles the number of job positions. The value is US$14 million over 2 years.

Commercial Enterprise Omnibus Support Services contact

Serco won a recompete to provide personnel to assist in gathering operations and exercise information for the Marine Corps Center for Lessons Learned. The contract is valued at US$15 million over 3 years, a 25 percent increase over the current level of effort.

Operations and maintenance consultancy contract for Makkah Metro, Saudi Arabia

Serco has won a contract to deliver operations and maintenance consultancy services to the Al Mashaaer Al Mugaddassah Metro Southern Line (Makkah Metro) in Makkah, Kingdom of Saudi Arabia. Working in partnership with China Railway Construction Corporation (CRCC) and Beijing Railway Administration (BRA), Serco will deliver the consultancy services and support the launch of the Metro for the 2010 Hajj (Pilgrimage). The Metro will link Makkah with the holy sites at Mina, Arafat, and Muzdalifah, and Serco will be responsible for delivering recruitment support, mobilisation planning, O&M training and documentation, Metro rules and procedures, HSQE management, safety case development and programme management. This new one year contract is valued at £10.5m to Serco

For further information please contact Serco:

Charles King, Head of Investor Relations T +44 (0) 208 334 4122
Dominic Cheetham, Director of Corporate Communications T +44 (0) 208 334 4334
Marcus De Ville, Head of Media Relations T +44 (0) 208 334 4388

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Last Updated: 11 May 2010