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Contract News Update

Date: 17 Nov 2011

Smaller and medium-sized contract wins are fundamental to Serco's growth and value creation; in addition to larger wins, this release therefore updates on a broad selection of signed contracts and preferred bidder appointments so far in the second half of 2011.

London cycle hire scheme expanded
Serco's partnership of the Barclays Cycle Hire Scheme has seen the award of an expanded contract by Transport for London (TfL) to support growth to East London, adding new docking stations in West London and an increase in the number available in the existing area. The expansion will add over 200 new docking stations, approximately 4,500 new docking points and 2,300 new bikes into the scheme. On average 25,000 customers use Barclays Cycle Hire each day and the scheme now has over 140,000 registered customers.

The contract expansion is in total valued at approximately £50m and will run until 2015, in line with the existing £140m six-year contract awarded to Serco in August 2009.

Healthcare support in Cornwall and Isles of Scilly
Serco has consolidated its position as one of the UK's leading providers of primary healthcare support with the signing of a renewed contract with NHS Cornwall and Isles of Scilly for GP out-of-hours care. Serco has provided this service to more than half a million people since April 2006, working closely with local acute healthcare providers and community services to manage unscheduled care in its entirety. The five-year contract has a total value of approximately £32m.

Yarl's Wood IRC contract extended and expanded
Our contract to manage Yarl's Wood Immigration Removal Centre (IRC) has been extended by two years. The contract has also been expanded to include provision for male residents, increasing the total value of the extension to approximately £25m.

Support to Defence Science and Technology Laboratory (Dstl)

As strategic partner appointed by Dstl in 2006, Serco will be overseeing and delivering part of Dstl's Helios programme, which was granted Ministerial approval to proceed in June this year. The Helios Programme will see the relocation of all of Dstl's activities from its Fort Halstead site and the provision of new facilities at its Head Office at Porton Down. The programme will enable Dstl to achieve its future strategic goals, to protect technical capability and to provide real cost benefits. For Serco, this represents approximately £100m of revenue to provide new buildings and facilities by 2016, and follows the successful completion of Project INSPIRE, which delivered award-winning, state-of-the-art science facilities at Dstl Porton Down.

Support services for RAF Valley
Serco provides the UK's Royal Air Force with a range of training, engineering and other operational support services, known as Multi-Activity Contracts (MAC). A new MAC has been won for RAF Valley on the isle of Anglesey, North Wales, which will support their crucial role in training fast jet pilots for both the RAF and the Royal Navy, and is also home to the RAF Mountain Rescue Service. The contract is for five years, and valued in total at over £20m.

Facilities management in Germany
Our multi-activity contract for MBDA, a world leader in missiles and missile systems, has been successfully rebid. Mainly comprising facilities management services at Schrobenhausen in Germany, the contract is worth ?14m over two years.

Operation and management of nuclear vessels
Serco has been awarded a new contract by International Nuclear Services (INS), the world's leading shipper of nuclear materials and a subsidiary of the Nuclear Decommissioning Authority (NDA). Serco is to become the new ship manager for INS's fleet of specialist nuclear cargo vessels. The contract includes the operation and management of five vessels and builds on our strong track record of delivering marine services to the Royal Navy and our expertise in the nuclear field. The four-year contract, which commences in April 2012, has a total value of approximately £3m.

Technical services to nuclear authority
Two contracts have been secured with the Nuclear Decommissioning Authority Radioactive Waste Management Directorate (NDA RWMD), one to undertake research and development into vitrified wasteforms and the second to assess hypothetical criticality scenarios in a geological disposal facility. This work will be conducted over a three-year period and is valued in total at £1m.

Local council strategic partnerships
Serco is preferred bidder for a new strategic partnership with Peterborough City Council. The in-house shared service centre will transfer to Serco, along with delivery of front-line and back office support services ranging from customer services, finance, revenues and benefits collection and payment, and property services. The contract is for an initial value of £100m over ten years and includes an agreement to add supplementary services.

Our ground-breaking strategic partnership with Hertfordshire County Council and our information communication technology (ICT) support services contract with Enfield Council have also added supplementary work, with a combined total contract value of over £40m.

Environmental services contract
Under challenges to meet government recycling targets and reduce costs such as landfill taxes, Serco has won a new contract for refuse and recycling services for Wandsworth Borough Council valued at £44m over eight years.

New education opportunities

Reflecting changes to UK government policy within the Education Bill 2011, Serco is partnering with councils where schools contract back for the provision of school improvement and related services, with wins in the second half including North East Lincolnshire Council, Warrington Borough Council and Halton Borough Council. The combined total value of these and other recent education-related contracts is estimated at approximately £50m over the next three to five years.

Information technology services in Europe

Serco has successfully rebid its contract to provide a wide range of IT operational and support activities to a major European banking organisation, valued at ?20m over four years. This has also led to a new win to support them in IT project development, security engineering and maintenance activities across their IT infrastructure and application services, worth an estimated ?50m over eight years.

Contact centre support in Europe

Expanding upon Serco's existing information technology support services to a major European institution, we have won a new Telephone Contact Centre contract. Serco will be operating a multilingual contact centre, maintaining a consistent capability of at least nine languages but also supporting all 25 EU languages whenever required. The contract, supported by The Listening Company, is worth ?4m over four years.

Career and alumni support for the US Army
Serco has been reappointed to the Army's Career and Alumni Program (ACAP) under the Army's HRsolutions Personnel Services Support (PSS) IDIQ. Through ACAP, Serco provides transition and employment assistance to soldiers and family members transitioning out of the military, as they move to private sector careers, self employment, college or retirement. Serco manages 53 ACAP locations across the US, South Korea, Italy and Germany, and will be adding additional remote access services. Serco has provided counselling support and transition services to the US Army for over two decades, providing vital services to more than 2.2 million service members, army civilians and family members. The contract renewal is for a one year base period with two additional option years, with a total value of US$52m.

Outreach and benefits services for the US Army
Through US Army's OneSource, Serco provides comprehensive community support and service delivery for soldiers and their families regardless of geographic location. Serco Community Support Coordinators are located throughout the US and Pacific to service effectively the unique challenges of military life, including the growing demand for behavioural health, financial legal and faith-based services. The contract renewal is for a one year base period with two additional option years, with a total value of US$34m. Serco also manages the MyArmyBenefits website, providing site architecture, IT development, networking support, programming and content management. This contract was also renewed for a one year base period with two additional option years, with a total value of US$11.5m.

Medical center operations for the US Armed Forces
Serco provides a range of clinical and non-clinical services at medical centers for the US Armed Forces. At the new Walter Reed National Military Medical Centers in the Washington DC metropolitan area our personnel management support services contracts have been extended, valued at up to US$15m over the next nine months.

Engineering and logistics for the US Air Force
Serco has been awarded a renewed contract under the Logistics, Maintenance and Supply Support (LMSS) IDIQ to support the Aeronautical Systems Center, Special Operations Forces (SOF) and Personnel Recovery Division (ASC/WIS) in the areas of engineering, financial and logistics management. The contract is for a seven-month base period with two additional one-year option periods, with a total value of US$13.5m over 31 months. Under this contract, Serco has been supporting systems programmes at Wright-Patterson Air Force Base since 1997.

Workforce development and training for the US Army
A new task order under the Army's HRsolutions Studies and Analysis IDIQ has been awarded to Serco to support the Army's Civilian Workforce Transformation (CWT) Campaign Plan. Serco will assist with analytic, management and advisory services in support of the CWT Campaign Plan and will utilize the Army Career Tracker system to provide leadership development and training management programmes. The task order has a one-year base period with two additional option years, with a total value of US$10m.

Financial management support for the US Army
Serco has been awarded a new task order under the Army's HRsolutions Personnel Services Support (PSS) IDIQ to provide financial management services at Army Defense Military Pay Office (DMPO) locations across the US. Serco will support records management services including financial processing, documentation, verification, transactions and customer service support. This expands the work that Serco has provided for Army DMPO since 2006, and increases the number of managed locations from two to ten.

The task order has a one-year base period with two additional option years, with a total value of US$9m.

Non-clinical support services for Fiona Stanley Hospital, Australia
For the Western Australian Department of Health, Serco will be providing vital non-clinical support services at the new Fiona Stanley Hospital near Perth. The 10-year contract has a total value to Serco of A$1.3bn (approximately £850m) and also has two five-year extension options. In the pre-operational phase which has now commenced, annual revenues will be approximately A$30-50m. From the opening of the hospital in 2014, annual revenues will be approximately A$160m.

The 783-bed hospital will be one of the leading hospitals in Australia and the major tertiary hospital serving communities south of Perth and across Western Australia. Under the Facilities Management Services contract, Serco will integrate non-clinical services through state-of-the-art technology to ensure the smooth running of the whole hospital. We will be responsible for 30 service lines, including: procurement for the fitout of the hospital; management and maintenance of hospital assets including medical equipment; information communications technology (ICT); estate and property management; recruitment and HR processes for all clinical staff; safety and incident management; reception, help desk and communications services; design and provision of integrated bedside information and patient entertainment systems; the management of patient electronic medical records and a wide range of other support services.

Prison contract extended in Queensland, Australia

A new five-year contract has been signed with Queensland Corrective Services to manage and operate the new 300 bed high-security South Queensland Correctional Centre (SQCC) in Gatton, transferring operations from Borallon Correctional Centre near Brisbane. The contract, which will commence on 1 January 2012, is valued at around A$100m over five years, with an option to extend to ten years. This replaces and extends a similarly valued five-year contract, due to end in January 2013, to manage the Borallon Correctional Centre which is one of the oldest facilities in Queensland and is being temporarily decommissioned as part of a wider reorganisation of the State's prisons.

Air traffic control services in the United Arab Emirates

Serco has successfully secured an extension for air traffic control and aeronautical engineering services to the General Civil Aviation Authority of the UAE. This complements our previous successful rebid of air navigation services at Abu Dhabi International Airport, Al Ain International Airport and Bateen International Airport, and reaffirms Serco's position as a leading aviation services provider in the Middle East region. The three-year extension has a total value of approximately £30m.


For further information please contact Serco:
Stuart Ford, 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: 17 Nov 2011