Serco Seals £56m Two-Year Canadian Defence Contract Extension

Serco has announced its second contract extension in two days, only a few weeks after it agreed to repay £68.5m to the UK government for overcharging to tag criminals.

Serco was awarded a two-year contract extension by Public Works and Government Services Canada to provide site support services at the 5 Wing Canadian Forces Base in Goose Bay, Canada.

This new contract extends the current 11-year agreement to March 2016 and is valued at just under C$100m (£56m, €68m, $92m) over a two-year period.

Serco will continue to perform the majority of the non-military operation and maintenance functions at this base, which is located in Central Labrador.

Serco has provided services to the Canadian Department of National Defense at 5 Wing Goose Bay since 1998 and is the largest private sector employer in the area.

On 9 January, Serco also revealed that it had signed a two-year extension to its contract with Transport for London (TfL) to manage and operate the Barclays Cycle Hire Scheme. The extension is valued at £38m and will see Serco continue to run the service until July 2017.

In December last year, Serco and G4S were officially stripped of their electronic tagging contracts with the Ministry of Justice after it emerged taxpayers had been wrongfully charged for work that was not carried out.

The pair's rival outsourcing giant Capita will take over both contracts in the interim period before a new contract is awarded by the justice department in 2014.

Capita is also the preferred bidder for the new £400m contract on the electronic tagging of criminals, which the government said is to introduce state-of-the-art satellite tagging.

Serco has since agreed to repay £68.5m to the government for overcharging to tag criminals.

"We are very pleased to be making strong progress in further rebuilding the confidence of our UK Government customer," said Alastair Lyons, non-executive Chairman of Serco in a statement at the time.

"Serco's cooperation with the intensive series of audits and reviews, alongside the significant steps we are taking as part of our renewal programme, demonstrate our commitment to this.

"The contract issues that were identified should never have happened and we apologise unreservedly for them. We are doing everything in our power to make sure that such issues cannot reoccur anywhere in our business around the world. Our objective is to deliver excellent public services with openness and transparency, and I believe the actions we are taking will support this now more than ever."