MPs call on G4S to forgo £57m fee after Olympics failure

 

Committee chairman Keith Vaz said a "high risk register" was needed

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G4S should forgo its £57m management fee after failing to supply the required number of Olympics security staff, a committee of MPs has said.

It should also compensate people who were accredited for Olympics work with the firm but not given any shifts, the Home Affairs Committee argued in a report on Olympics security.

The firm's Olympics contract was worth £237m, including the management fee.

G4S said the £57m management fee was "substantially" real costs not profit.

But committee chairman Keith Vaz said the firm had delivered an "11th-hour fiasco" after "recklessly boasting" that it could meet the terms of its contract.

G4S admitted last month that the Olympic contract had cost it £50m after it failed to deliver the 10,400 Olympic security guards needed in time.

The government was forced to turn to the military for the extra staff, for which G4S confirmed it would pay.

'Shambles'

G4S chief Nick Buckles briefs MPs on 11 September: "We delivered a significant portion of the contract"

"The largest security company in the world, providing a contract to their biggest UK client, turned years of carefully-laid preparations into an 11th-hour fiasco," Labour MP Mr Vaz said.

Mr Buckles had provided the government with information that was "at best unreliable, at worst downright misleading", he added.

Mr Vaz explained: "Twenty-four hours before they admitted their failure, Nick Buckles met with the Home Secretary and did not bother to inform her that they were unable to deliver on their contract, even though he knew about the shortfall a week before."

Armed forces personnel should be considered as security guards from the outset, rather than just as an emergency back-up, the committee recommended in its report.

G4S should also offer compensation to budding security staff who had been trained and accredited to work at the Olympics but had not been given any shifts due to management errors, it said.

The report also suggested that ministers should maintain a blacklist of companies to avoid when making future procurement decisions.

Military at the Olympic Park The government was forced to call in the military to plug the shortfall in security staff

A G4S spokesman said: "As explained by both G4S and Locog to the committee, the £57m 'management fee' is not a profit.

"It relates substantially to real costs which have been incurred such as wages, property and IT expenditure. The final financial settlement is currently under discussion with Locog."

At a Home Affairs Committee hearing, Mr Buckles told MPs that he expected Games organisers to pay his company "exactly in line" with the £237m contract.

He had previously described the staffing crisis as a "humiliating shambles".

Locog chief Paul Deighton earlier said it had paid G4S £90m up to 13 July, but described the remaining £147m as "up for negotiation".

 

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  • rate this
    -2

    Comment number 656.

    If it's in the contract they shouldn't be paid they shouldn't, else they should. That's how the law works.

  • rate this
    +2

    Comment number 655.

    They should not get a penny. They signed a contract to deliver a complete package and they failed. The money that they are owed should be split up and given to the troops who lost their leave.

  • rate this
    +2

    Comment number 654.

    653. Nick Ebrell
    All those voted down on #647. Presumably from people who don't like to be reminded of forgive and forget Labour. Tribalism is the worst trait a voter can exhibit.
    +++
    No it isn't, paranoia is.

  • rate this
    0

    Comment number 653.

    All those voted down on #647. Presumably from people who don't like to be reminded of forgive and forget Labour. Tribalism is the worst trait a voter can exhibit.

  • rate this
    0

    Comment number 652.

    If you contract to do a job, and fail to complete that contract, then you are in default. The Police and armed forces personnel who had to fill the gap were required to have their lives interfered with, and I would dread to think what the consequences could have been without that last minute change. Pay them??? They should pay a penalty charge.

  • rate this
    -1

    Comment number 651.

    G4S should be paid the whole contract, not a penny short. LOCOG knew the private sector could not deliver, but ignored the advice at the time and still fronted more taxpayers money. A contract is a contract. Only a fool would think the private sector could deliver something so simple as recruit unemployed people for menial security tasks. Did i say only a fool?

  • rate this
    -2

    Comment number 650.

    Did they or didn't they provide the services they said they would? Pay them pro rata. Simple.
    And certainly not listening to that odious man Keith Vaz.

  • rate this
    +1

    Comment number 649.

    "648.Adept
    Source BBC NEWS....."

    Is that the article about G4S's huge failure to actually give start times to their potential staff, even the ones who they had trained? Or would that be 'the bridge' news?

    Let's face it, after 'the bridge' incident any potential G4S worker would have doubts about getting paid, accommodated, or even the transport turning up. G4S were their own worst enemy.

  • rate this
    -1

    Comment number 648.

    646. Ex Tory Voter

    Googles great for searching but maybe if you watched the news once in a while you would know first hand this was an issue...

    Source BBC NEWS.....

  • rate this
    -5

    Comment number 647.

    Quick to condemn G4S, but seems plenty of people are willing to forgive and massively forget what Labour did to this country.

  • rate this
    0

    Comment number 646.

    "645.Adept

    Although they didnt complete this contract it is worth noting though that the situation was made worse by the sheer amount of lazy bone idle wasters who were given jobs with start dates then didnt turn up."

    You really need to check your facts before commenting. Google is good for doing this, in fact reading whole article above would be a good start.

  • rate this
    -1

    Comment number 645.

    GS4 shouldnt receive full payment since they didnt complete their contract.

    Although they didnt complete this contract it is worth noting though that the situation was made worse by the sheer amount of lazy bone idle wasters who were given jobs with start dates then didnt turn up.

    I hope all these no showers also get their benefits cut so im not paying for those lazy sods as well...

  • rate this
    0

    Comment number 644.

    I think the government and company should go to arbitration to decide what is owed since but caused trouble for contract.
    government for change the need to high number at late date and company for being so disorganized that they could not get job done if if they had been informed 1 year ahead of time.

  • rate this
    +1

    Comment number 643.

    Clearly it's all Governments fault - we all know that unless every last detail is written into a 450 page contract, there is no requirement for a private provider to 'do a good job'.
    In the public sector, no matter how much budgets are cut and workload increased (eg local authorities). It is still their 'duty' to get on with it - and their fault if it goes wrong!

  • rate this
    +1

    Comment number 642.

    "640.milvusvestal
    This smacks of yet more government incompetence by public sector lawyers with little or no experience of business, or the real world. "

    Or it smacks of a private company using its lawyers to take the public sector for a ride, an equally valid point of view.

  • rate this
    +3

    Comment number 641.

    Surely someone in government looked at the sums before this ludicrously overpriced contract. £284million for 10,400 guards =£27300 per guard for a max of 5 weeks work, or £300,000pa. How in the name of all that is Holy can this have ever been justified, even if G4S had delivered to contract? No wonder PFI's are bankrupting us. Capita might also be checked out to name another.

  • rate this
    0

    Comment number 640.

    For Heaven's Sake, what were the terms and conditions of the contract? Or do we now discover that it was so full of gaping holes and loosely worded as to let G4S off the hook on a technicality?

    This smacks of yet more government incompetence by public sector lawyers with little or no experience of business, or the real world. But, of course, they won't even get a smack on the wrist.

  • rate this
    +2

    Comment number 639.

    http://www.bbc.co.uk/news/uk-scotland-19675087

    Criticised security firm G4S wins Scots tagging contract
    +++
    You couldn't make it up!

  • rate this
    0

    Comment number 638.

    @628 SIA is not done by the government. It is an independent body.

  • rate this
    +1

    Comment number 637.

    Its about time we had some proper journalism in this country. Too many big government contracts get punted out to too few private companies. Is there a link between who awards the contracts and who gets them? Are backhanders involved? Is it school ties? Come on BBC step up to the mark.

 

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