HOOK (dpa-AFX) - VIVO Defence Services (VIVO), a 50/50 Joint Venture between Serco Group Plc. (SRP.L) and ENGIE, (ENGQF.PK, ENGIY.PK), has been awarded contracts to provide asset and facilities management services for the UK defence built estate by the Defense Infrastructure Organization or DIO, Serco said in a statement.
VIVO has been awarded contracts for two of the four regions being tendered under Lot 3 of the Future Defense Infrastructure Services program. VIVO will be responsible for providing services in the South West and Central regions of the UK.
The total core contract value to VIVO for the two regions is estimated to be about 900 million pounds over the initial seven-year period, including indexation. There are a further three one-year extension options.
In addition to the core fixed price contract for each region, there will be significant amounts of additional project work, which will be commissioned as required by the Defense Infrastructure Organization and, while the future value of these projects is uncertain, the Ministry of Defense estimates that they are likely to be worth a further 2.5 billion pound the initial seven year term.
The services VIVO will deliver will support the UK's defense capability, maintaining the MOD's built estate across more than 200 sites and around 19,000 buildings. Following a six-month mobilization phase, the core work is scheduled to start in February 2022, and the company expect the additional project work to ramp up during the course of 2022.
Serco noted that all of its four divisions have traded in-line or ahead of their budgets in the first five months of the year. The company increased its guidance for Underlying Trading Profit in 2021 by 15 million pounds, to around 200 million pounds. The VIVO contract will not have any material impact on its profits in 2021.
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