Engie-Serco JV wins £810m MoD maintenance contract

Vivo Defence Services, a 50:50 joint venture between services firm Serco and energy and services company Engie, has won two residential maintenance contracts with the Ministry of Defence (MoD) worth a potential £810m over seven years.

The two regional repairs and maintenance contracts will cover the South West and South East, which together comprise 60 per cent of the MoD’s accommodation for service families. The South West region comprises 14,000 homes across Salisbury Plain, Gosport, Bristol, Devon, and Cornwall, while the South East region encompasses 13,000 homes across Oxfordshire, Buckinghamshire, Hampshire, London, Kent and Essex.

The contracts, awarded by the Defence Infrastructure Organisation (DIO) under the Future Defence Infrastructure Services programme, are due to start in March 2022, following a mobilisation phase. The contracts will cover both proactive and reactive maintenance as well as safety checks. In a statement, Vivo said it also plans to pilot a net-zero carbon-retrofit programme, “which decarbonises and digitalises existing housing stock”, across some of the homes under its remit.

The core value of the two contracts is expected to be £296m over an initial seven-year period, with the potential for three further one-year extensions. The MoD has estimated that projects commissioned outside the core are likely to be worth a further £514m over the first seven years.

Vivo added that it will provide apprenticeships, work placements and graduate schemes within the contracts, including secondments for ex-services personnel, with 20 per cent of vacant or new roles allocated to people “with a military connection”. Both Engie and Serco are signatories of the Armed Forces Covenant, a pledge to support service personnel, leavers, veterans, and families.

DIO head of accommodation, air commodore James Savage, said: “These new contracts offer the opportunity to break decisively from the past and to […] deliver more responsive and flexible services to the Armed Forces and their families.”

Engie UK & Ireland divisional CEO Colin Macpherson said: “By implementing smart and modern home technology, we plan to take a more proactive approach to maintenance, while encouraging open dialogue with families.”

Amey won a £550m contract last week to maintain residential MoD properties across central and northern England.

Earlier this month, Vivo won two of four regional facilities management contracts that it said could be worth £3.4bn over seven years. The joint venture is also competing for seven further DIO contracts.

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