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21 September 2012 | Adam Leach
The Home Affairs Select Committee has called for a list to be created which names and shames companies that fail to deliver on government contracts.
In its report into the G4S Olympic security contract, published today, the committee laid the blame for the failure solely at the feet of the private security firm. It said assurances the company was giving both the London Organising Committee of the Olympic and Paralympic Games (LOCOG) and the Home Office that the contract would be delivered in full were “at best unreliable, if not downright misleading”.
In terms of direct action, the committee called for LOCOG to quickly identify the precise failings of G4S in relation to the contract. It also called on the company to waive its £57 million management fee in order to show the taxpayer that “it is serious about offering fair and reasonable redress when things go badly wrong”.
In a statement the company said: “As explained by both G4S and LOCOG to the committee, the £57 million management fee is not a profit. It relates substantially to real costs that have been incurred, such as wages, property and IT expenditure. The final financial settlement is currently under discussion with LOCOG.”
G4S has previously reported it expects to lose £50 million as a result of its failure to deliver the contracted number of guards. To make up the shortfall, volunteers, police and members of the armed forces were drafted in to ensure the games were safe and secure. G4S will be required to pay for the additional costs accumulated as a result of bringing in extra guards.
More broadly, the committee called for the government to draw up a blacklist which details the companies that fail to deliver against government contracts. The committee expressed the increasing need to hold private sector providers to account due to their growing role in the delivery of public services.
“We recommend that the government establishes a register of high-risk providers, who have a track-record of failure in the delivery of public services. This would provide a single source of information for those conducting procurement exercises about companies which are failing or have failed in the delivery of public contracts,” the report said.