London 2012 security contract is one of kind, says G4S chief ... - Insidethegames.biz (blog)

By Tom Degun at the House of Commons in London

September 11 - G4S chief executive Nick Buckles told the Home Affairs Select Committee here that the unique nature of the contract his company signed with London 2012 to become security providers for the Olympic and Paralympic Games is the main reason why they failed to deliver.

G4S revealed it could not provide the required number of guards at the Olympics with just days to go to the start of the Games, forcing the Government to commit 3,500 military personnel to fill the security void.

It came after G4S signed a £284 million ($442 million/€361 million) contract with London 2012 to provide 10,400 security guards for the Olympics, but only 4,000 guards were trained and ready by the time of the opening of the Games.

But Buckles (pictured top), who admitted to the Home Affairs Select Committee in July that the episode had been "a humiliating shambles", said the contract signed with London 2012 was a major problem.

"The contract we signed is one of a kind," Buckles told the chairman of the Home Affairs Committee Keith Vaz as he was grilled on the high-profile failure.

"It is different to any other contract that has been carried out by any other private sector company in the world for security.

"There is no blueprint for it, there is no track record for it and there is no book.

"There is not another contract like it and when we signed it back in December; we clearly thought we could deliver on it.

"But it is a seriously complex project.

"These are not excuses, they are just explanations and there are of course regrets."

Only 4,000 G4S security guards were trained and ready by the opening of London 2012

Buckles reiterated the fact that G4S had made a £50 million ($78 million/€64 million) loss from the Games but said he still expects London 2012 to pay some of the contract, despite not having been paid by the Organising Committee since July 13 after admitting it could not deliver fully on the project.

"We have no profit at all, just a £50 million ($78 million/€64 million) loss," he said.

"But I still expect London 2012 to pay us in line with the contract.

"That is exactly what contracts are for; to make sure that you get a fair and equitable settlement.

"I'm not going to sit here and say we did a great job, I'm nowhere near saying that, but what I am saying is that we delivered a significant part of the contract and our people did an excellent job in securing the Games.

"But we are still planning to take a £50 million ($78 million/€64 million) loss on this contract because we failed to deliver in the way we expected to."

The G4S chief executive also pointed out that his company made a big donation to the services charity to recognise the fact that the military and the police stepped in at late notice to help G4S perform their security obligations as part of the contingency plan.

"We are certainly very keen to acknowledge the support that the military gave us, and the police," Buckles said.

"So after consulting with the Ministry of Defence (MoD) about the best way to deal with that, we did make the decision to donate £2.5 million ($4 million/€3 million) to the services charity in recognition of the fact that we certainly have disrupted a large number of people's summer and we certainly apologise for that."

Thousands of British troops had to be called in to cover the security deficit left by G4S

On his own role and whether the issue would force him to resign, Buckles said he would wait to see the results of an independent review into the issue before making any final decision, with the findings of the review due before the end of the year.

"I have been with the group 28 years and chief executive 10 years," he said.

"It has been a big investment for my whole career and my whole life and it [resigning] is not a decision I would like to take lightly.

"I expect the Board to listen to the findings of the review before we decide anything.

"But I am group chief executive and if a contract goes wrong, I take the blame for that as well the credit for the many, many contracts that go right.

"I care about this company significantly and it is very painful when we have all of these negative headlines.

"So for us, this wasn't good."

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Olympics 2012 security fiasco: G4S confirm £50m loss - Daily Mail

Firm loses money on staff it failed to provide and must also pay for soldiers forced to step in
Figures reveal a 60 per cent drop in pre-tax profits
Chief executive confirms G4S has withdrawn from bidding for a ?20billion government contractHe says the debacle was a 'big setback' for the company and it would have to re-build the brand

By Emily Allen

PUBLISHED: 08:59 GMT, 28 August 2012 | UPDATED: 07:43 GMT, 29 August 2012

The firm behind the Olympics security fiasco admitted today that its loss on the bungled contract will be in the region of ?50million.

G4S is conducting an internal review after its failure to provide all of the 10,400 contracted guards for London 2012, which forced the Government to step in with military personnel.

Today G4S said it had delivered just 83 per cent of contracted shifts and that it was confident the Paralympic Games - starting tomorrow - would be fully staffed with a security workforce.

Members of the Armed Forces stepped in to make up the shortfall after G4S failed to provide all of the 10,400 contracted guards for London 2012

The company's Olympic contract was worth ?284million but the firm told the government less than a month before the opening ceremony that it would only be able to provide 8,000 guards.

Figures released today show G4S's failure to supply all the staff it promised, plus the money it has had to pay for the deployment of 3,500 soldiers, had cost the firm about ?50million.

Regret: Chief executive Nick Buckles said G4S was 'deeply disappointed' with the mess over the Olympics contract

The announcement came as the firm's share price plummeted shortly after 9am to 256p.

It also revealed a 60 per cent drop in pre-tax profits for the six months until June to ?61million from ?151million a year earlier, although profits were held flat on an underlying basis after sales increased 5.8 per cent to ?3.9billion.

G4S is the largest employer on the London Stock Exchange and employs more than 650,000 staff in 125 countries worldwide. More than a quarter of its income comes from government contracts.

There had been fears that the Olympics contract issues would hurt the group’s prospects for future Government work.

Chief executive Nick Buckles confirmed that the resources G4S had put into sorting out the debacle meant it withdrew from bidding for a Department for Work and Pensions contract worth ?20 million a year.

But he said no contracts had been lost as a result of the Olympics deal woes and insisted the group would continue to play a 'major role' in the public sector, with an overall ?3.8billion-a-year contract pipeline.

Losses: G4S has announced 1,100 job cuts as part of a restructuring programme although fewer than 100 roles have been axed in the UK

March 2011: G4S is made the official 'security services provider' for London 2012 and agrees to provide 10,000 staff.

12 July: Defence Secretary Philip Hammond announces up to 3,500 extra troops will be needed for security duties during the Olympics amid fears that G4S will not be able to meet the needs.

Home Secretary Theresa May tells MPs there was 'no question of Olympic security being compromised' following the decision to draft in the army.

13 July: Shares in G4S plummet and more than ?150 million is wiped off the company's market value in two days.

14 July: G4S chief executive Nick Buckles says the firm will be facing fines of ?10 to ?20 million as a result of the failure to meet its commitments.

He said: 'We were deeply disappointed that we had significant issues with the London 2012 Olympics contract and are very grateful to the military and the police for their support in helping us to deliver a safe and secure Games.'

He added: 'Clearly it is a big setback and we need to rebuild the brand over the coming months and years.'

Mr Buckles has been left fighting to save his career after the debacle and an intense grilling by MPs which saw him agree that it had been a 'humiliating shambles'.

Reports in recent days suggested he had the support of major shareholders and he said today that he hoped to keep his job, having been with the group for 28 years, 10 of them as chief executive.

He is preparing for a second appearance in front of MPs on the Olympics contract next month, while the results of the internal review are due towards the end of September.

G4S also announced 1,100 job cuts as part of a restructuring programme started in December.

Most of the cuts have been made across continental Europe and developing markets, with fewer than 100 roles axed in the UK.

G4S will provide the majority of security for Paralympic venues as the number of troops and police officers on duty is scaled back, organisers confirmed today.

Locog chief executive Paul Deighton said the private firm will use 4,000 to 5,000 workers.

Mr Deighton said: 'We’re fully confident. The military contingent this time will be 3,500 soldiers, with 1,000 in reserve and typically G4S will be between four and 5,000.

'In very simple terms, we’re switching from an approach which had a slight majority of military during the Games to one which will have a slight majority of private sector security for the Paralympics.'

The number of military personnel has been drastically scaled back from the 12,200 troops involved in venue security during the Olympics.

Police numbers will also be halved, with around 7,000 officers on duty across the country, compared with 14,500 previously.

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