Lincolnshire County Council has selected Serco as the preferred bidder for a £70 million business process outsourcing deal, despite ongoing controversy surrounding the firm’s overcharging central government on an electronic tagging contract.
Serco will replace incumbent Mouchel and also beat Agilisys to the five year deal, which covers IT, finance and HR.
The contract is expected to be awarded on 4th March, with Serco due to start work in April 2014 and transitioning to full service on year later.
Research director at TechMarketView, John O’Brien, said that it “looks like cost ultimately won the day for Serco”, as it expects to deliver savings with £14 million over the next five years for Lincolnshire Council.
Councillor Martin Hill, Leader of Lincolnshire County Council, said: “It was important to get the best possible deal for taxpayers, so we’ve put a lot of time and care into these negotiations.
“Both of the finalists submitted excellent bids, and officers would have been pleased to recommend either company. But in the end Serco delivered a better deal with more savings.”
The win will be significant for Serco, as it is currently accused, alongside G4S, of overcharging on an electronic tagging contract, which has resulted in a Serious Fraud Office (SFO) investigation and threats from the government that it could be banned from all public sector business. CEOs at both companies have also stepped down as a result.
Serco has said that the impact of the dispute with government will be significant in 2014, where the company has also issued a profits warning.
However, the Cabinet Office recently also gave Serco’s corporate renewal plans a ‘positive assessment’, which were established in an attempt to stop it getting blocked from all government business.