31st Mar 2016 06:59
LONDON (Alliance News) - Serco Group PLC on Thursday said the review of its joint venture contract managing the operations of the Atomic Weapons Establishment on behalf of the UK government has been concluded.
Serco said the updated contract provides a framework through to 2025, with regular pricing reviews put in place. The next pricing review will take place in 2019.
Serco did not provide any financial details on the deal, but said the new structure of the contract will impose greater risk-sharing on the customer, the UK Ministry of Defence, with an opportunity to earn higher margins through outperforming against the terms of the deal.
Serco handles the contract in a joint venture with US defence contractor Lockheed Martin Inc and US engineer Jacobs Engineering Inc. The structure of the joint venture has been altered under the new contract, with Serco and Jacobs seeing their shares of the venture reduced to 24.5% each from 33.3% previously.
"I am delighted that the UK government has chosen to secure the operation and management of the Atomic Weapons Establishment through AWE ML, and that Serco will continue to play a central role in supporting a vital component of our national security and scientific expertise," said Rupert Soames, Serco's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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