G4S cleared to bid for government work

The government has confirmed that it will accept bids from G4S, having barred the company from bidding for public sector work in July last year after it was found to have overcharged the Ministry of Justice (MoJ) for prisoner tagging.

In a written ministerial statement to Parliament, Cabinet Office minister Francis Maude said G4S “has engaged constructively with the government” since then and has put a Corporate Renewal Plan in place which “represents the right direction of travel to meet our expectations as a customer”.

The government plans to continue to monitor progress at the company as the plan is implemented, the minister added.

An audit by PricewaterhouseCoopers last year found that G4S and Serco had overcharged the government by “tens of millions of pounds”, billing the MoJ for tagging people who had returned to prison, moved abroad or even died.

In November, the company apologised and issued credit notes worth £24.1 million to the MoJ. It has since lost the tagging contract to Capita.

Last month, the company agreed to repay £109 million to reimburse the taxpayer for overcharging on MoJ contracts and cover any costs to government, a move Maude describes as “a significant announcement and a positive step for G4S”.

Meanwhile, the Serious Fraud Office is currently conducting a criminal investigation into the case G4S and Serco. Both firms have said that they will cooperate fully with the investigation.

Earlier this year, G4S revealed that its profits were hit by a £136 million charge, part of which related to its controversial electronic tagging contract with the UK Ministry of Justice (MoJ).

G4S CEO Ashley Almanza said: “We are pleased that the Government has given a positive assessment of the steps we have taken to rebuild their confidence in our services…today's ministerial statement marks an important milestone in rebuilding our relationship with the UK government."

He added: “We have consolidated central government contracts into a single business unit under new leadership and enhanced contract management processes. Our priorities now are to deliver outstanding service on existing contracts and to grow our business by competing for new Government services in areas where we have proven expertise and capability".

Copyright © 2014 IDG Communications, Inc.

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