G4S endured a shocking time at London 2012 Olympics falling well short of their contractual obligations resulting in them having to pay a large sum in contract compensation. They also announced operating losses shortly afterwards and it seems that the fallout isn’t yet complete as it has been announced that the security giant will not be given the HMP Wolds contract and a further three prison contracts will remain under public sector management.
The chiefs at G4S have been attempting to salvage some of their reputation in recent months and head of the company, Nick Buckles, had earlier said that he hoped the securing if new business would help the company to enjoy an improvement in its chances of securing new prison contracts. However, this recent news would indicate that they have, in fact, lost reputation especially as G4S was the incumbent supplier for one of the contracts so would have been in the best possible situation to field a competitive bid.
In September, shortly after the extent of the G4S failure was made public, politicians said that the security company should feature at the top of a black list of companies that consist of those organisations that have previously failed to provide appropriate public services. This sentiment was aired by politicians from all parties as the same group also questioned the company’s decision to pursue the nearly £60m management fee that they felt they were still owed.
At that time, the government said that it had adopted a new policy whereby previous records with other government contracts were taken into account. They said that they would not name and shame these companies, suggesting that a black list was unlikely, but stated that any company that had failed to deliver on its contracts in the past would find it very difficult to be in with a chance of winning future contracts. The latest news that G4S has lost one prison contract and failed to feature in any of three new contracts would indicate that the government have been true to their word.
HMP Wolds was already run by G4S and as the company has a working knowledge of the costs and requirements to run the prison while still operating at a profit, it may come as a surprise to many, including those within G4S that they failed to secure the contract. Instead of being handed to G4S the contract has been handed to the public sector as of July 2013 and this isn’t the only prison loss experienced by the company either.
Three other prisons were left in public hands and four further prison contracts are due for negotiation. It seems increasingly unlikely that G4S will gain any of these contracts either which represents a significant loss. Earlier in the week, Nick Buckles had said that he hoped the company’s track record in starting new business would stand them in good stead with the government. This doesn’t appear to have been the case and it would seem that the government is still reeling from the debacle that was Olympics security.