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Contract News Update 16

Date: 15 May 2013

Smaller and medium-sized contract wins are fundamental to Serco's growth and value creation; in addition to larger wins, this release updates on a broad selection of recent contract awards.

Operating London's Docklands Light Railway

Serco has signed an 18-month extension to its contract to operate, maintain and market the Docklands Light Railway (DLR) on behalf of Transport for London.  The extension, valued at approximately £100m, will run to September 2014 and followed the successful delivery during the London Olympic Games where more than double the normal level of passengers were carried with trains maintaining over 99% reliability.

Parking services for the West London Alliance

Serco has been awarded an innovative new contract to provide end-to-end on-street parking enforcement for the West London Alliance, a partnership between Ealing, Hounslow and Brent Borough Councils.  Serco will manage Civil Enforcement Officers, cashless parking and electronic payments, back-office services as well as the deployment of state of the art, Automatic Number Plate Recognition (ANPR) enforcement vehicles.  The initial five-year contract is valued at over £30m with an opportunity for additional options including a five-year extension, potentially worth a further £57m.

Multi-Engine Pilot Training at RAF Cranwell

Serco has extended its Multi-Engine Pilot (MEPT) Training contract at RAF Cranwell, building on the successful rebid of the Multi-Activity Contract secured in 2012.  The one-year extension valued at approximately £10m will see Serco provide up to 5,500 flying hours in the King Air B200 aircraft as well up to 2,700 aircraft simulator hours.

Ongoing support to UK Defence helicopter operations

Serco has signed a contract extension with AgustaWestland Ltd to assist them in maintaining the Search and Rescue fleet of Sea King aircraft for the Ministry of Defence under their Integrated Operational Support Contract.  The two and a half year extension is worth over £7m and sees the Royal Naval Air Station Yeovilton-based operation continue its critical maintenance of the aircraft.  Serco has also signed a one year extension with the Ministry of Defence for the provision of Air Traffic Services at the home of the British Army's Apache fleet - Wattisham Flying Station.  Valued at just over £2m, the extension sees the continuation of an operation successfully provided by Serco for the last four years of the current contract.

Health and forensic services support for Dorset Police

Serco has been selected to provide Dorset Police with custody healthcare, sexual assault referral centre and on call forensic medical examiner services.  Awarded on behalf of NHS Dorset Clinical Commissioning Group, the contract is expected to have a total contract value of approximately £5m over five years.

Health facilities management services for NHS Suffolk

Serco has signed a new contact to consolidate the provision of various facility support services within Suffolk Community Healthcare.  This opportunity has involved the transfer of a further 74 staff to Serco from across the east of the county.  In the short period of time this contract has been in place, all community hospitals have been awarded the highest rating in the most recent environmental health inspections.  The two and a half year contract has an estimated value of approximately £3m.

Driver examination services in Ontario, Canada

Serco has been selected as preferred bidder by the Ministry of Transportation Ontario to continue providing driver examination services for a further 10-year period.  Serco has been providing these services since 2003, and delivers 575,000 knowledge tests and 675,000 roads tests on an annual basis at 95 testing centres across Ontario.  Working as a consortium with Plenary Group, Serco will work with Infrastructure Ontario to finalise contract details and reach financial close over the coming months.

IT and HR contract awards

Serco has secured multiple new small contracts wins worth approximately $15m including task orders under existing Sea Enterprise and HRsolutions IDIQ frameworks.  This includes deploying IT systems for the US Navy and human resource services for the US Army.

Logistics management for US forces

Under the US Army's Logistics Civil Augmentation Program (LOGCAP) Support IDIQ, Serco has been awarded task orders valued at approximately $12m.  The contract provides comprehensive and wide-ranging operations, program and acquisition management and logistics support around the world in support of US and allied forces during operations.

Program office support for the US Air Force Special Operations Forces

Serco is part of the team awarded a task order contract for the Air Force Life Cycle Management Center Special Operations Forces and Personnel Delivery Division support services.  This was awarded under the Acquisition of Consolidated Enterprise Support Services (ACCESS) contract vehicle.  Serco will support the provision of technical services including engineering, program and acquisition management, financial management, logistics management, and configuration management.  This task order contract has a one-year base period and two options with a ceiling value of $7m for Serco if the options are exercised.

Technical and Engineering Services for US Navy Data Center

Serco is part of the consortium awarded a contract to provide technical, engineering, operations and maintenance services to support the US Navy's Space and Naval Warfare Systems Center Pacific (SSC Pacific) data centre.  The new contract has an estimated value to Serco of $3m over three years.

Aviation weather forecasting for US Navy

Serco has secured a position on the Aviation Weather Forecast & Observation Services IDIQ vehicle with a ceiling value of $40m.  Subsequently, Serco as part of a consortium was awarded a task order under the vehicle to provide aviation weather forecasting and observation services for the US Navy at their aviation facilities.  The five-year contract has an estimated value of $2.5m to Serco.

Task orders under US Navy IDIQ for installation of command and control systems

Serco has been awarded $2m of task orders under the C4I2TSR IDIQ which enables the US Department of Defense and civilian government agencies to procure a full range of services for mission-critical and emergency information technology systems. These services and products include engineering, systems integration, hardware procurement, software development, technical support, installation testing, operations and maintenance. Serco is the sole provider under this IDIQ.

Defence logistics and base support for the Australian Defence Force

Serco has extended and expanded its contract with the Australian Defence Force (ADF) to provide logistics and base support services in the Middle East.  Serco delivers fully integrated support for ADF bases to ensure the provision of high-quality services in areas such as maintenance and accommodation and will also assist through a complex programme of demobilisation from Afghanistan.  The one-year extension is valued at approximately £18m.

Health support services in the Middle East

Serco has been awarded a new healthcare enabling support services contract in the Middle East at Healthpoint in Abu Dhabi.  Serco will deliver a comprehensive range of facilities management services including estate management, grounds and landscaping, helpdesk, cleaning, laundry and waste management.  The approximate total value of the contract is £5m over three years.

Health support services in Hong Kong

Serco's facilities management services contract for the Hong Kong Hospital Authority's West Cluster has been extended by three years.  Provided at four hospitals and one rehabilitation centre in the western districts, the extension reflects the Authority's confidence in Serco's ability to deliver quality services in Hong Kong where we currently employ more than 600 people in health-related businesses.  The extension is expected to be worth approximately £4m.

Traffic systems in Hong Kong

Further expanding on Serco's operations of transport information and integrated transport management systems in Hong Kong, a new contract has been awarded for digital camera systems.  Covering development, integration, installation and maintenance, the award has a value of approximately £3m over three years.

UK Central Government BPO

Serco has secured extensions for a number of UK Central Government BPO contracts valued at over £100m in total (with an average extension period of three years).  The contracts include the provision of specialist complex case management services for the Child Maintenance Group at the Department for Work and Pensions, managing enquiries on behalf of Jobcentre Plus and the Universities & Colleges Admissions Service (UCAS), supporting the delivery of the Department of Health's 'Healthy Start' programme and operating the Food Standards Agency's emergency helpline.

BPO services for leading UK high street retailer

Serco has been awarded a new contract to provide a range of BPO services including sales and payments collection for a leading UK high street retailer.  The adoption of an integrated contact centre approach will see Serco operate customer services from our contact centre in Sheffield as part of a five-year contract expected to have a total value of approximately £30m.

Middle East public sector shared service

Serco has been awarded a new contract for shared services to over 50 government departments within the United Arab Emirates.  Serco will initially provide citizen contact and issue resolution management regarding the supply of public services, with potential for the scope of the contract to be increased in the future to include other back office processing.  Contact will be delivered on a unique multi-channel basis including voice, email and web chat.  As per the agreement the contract will provide employment opportunity to only Middle Eastern nationals.  The initial four-year contract is estimated to be valued at approximately £24m.

Customer services for the Indian energy market

For a north Indian state's Department of Electricity, Serco has been awarded a contract to provide a new customer service centre operation.  Serco will set-up a centralised call centre in the largest city of the state with regional offices in various other cities.  The three-year contract has an approximate value of £5m.  Serco has also been awarded a new contract to support the Government Electricity Board in a further state in India, providing end-to-end management of all electricity-related complaints.  This three-year contract is valued at approximately £1.4m.

Integrated outsourcing services for major banks

Serco has been awarded a new contract supporting India's leading credit card issuer.  Serco will provide customer contact and infrastructure services related to sourcing new card customers for the client.  The agreement is to deliver a comprehensive and scalable operational model, with the initial three-year contract (extendable for one year) valued in total at approximately £5m.  In a second contract, Serco will be providing a consolidated personal loan and credit card underwriting process for a major international retail bank.  For their Indian operations Serco will be supporting the delivery of improved customer experience, efficiency levels and significant cost savings in a new three-year contract valued at approximately £2.4m.

Customer services for leading Indian telecom provider

Reflecting Serco's position as a leading strategic partner to the telecom industry, Serco has extended and expanded its contract to provide customer contact services to one of India's leading telecom operators.  The three-year contract valued at approximately £4m will see a significant enhancement in business volumes and an over 100% rise in Serco's workforce in the southern state of India, Tamil Nadu.


For further information please contact Serco:

Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227

Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226

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Last Updated: 15 May 2013