G4S turned down reduced requirement on Olympic security contract

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30 January 2013 | Adam Leach

G4S turned down an offer to supply fewer security guards for the London 2012 Olympics during renegotiation of a revised security deal, confident it could meet a higher requirement.

In mid 2011, a report by Deloitte into security arrangements for the Games revealed the number of guards that had been estimated to be necessary was far lower than what was needed. As a result, the number - a combination of volunteers, military and G4S staff - was increased to 23,700. To meet the new requirements, the contract with G4S - which was already providing 2,000 guards - was renegotiated.

In July of 2011, Steve Wills, managing director of Procurement Central, joined the London Organising Committee of the Olympic and Paralympic Games (LOCOG) as a procurement advisor to assess the proposals for the new requirements and to negotiate with G4S on a new contract.

Wills told SM he had concerns whether G4S would be able to deliver the number required due to the unprecedented size and scale of the security operation and the fact that there was less than a year to go. As a result, he offered the company the opportunity to provide fewer guards.

“At one stage, I actually offered them 7,265, but they felt confident that they wanted to go for 10,400,” he said. “With less than 12 months to the opening of the Olympic games and little rigour around how they were going to do it and their costs, we were going to have a challenge to convince government to give them the money, and G4S were going to have a challenge to build this machine - to recruit, to train, to vet, to uniform and to feed.”

Under the original contract, G4S were just required to provide guards, but under the final deal they were required to manage the whole 23,700 strong workforce, with extra money for this coming from government.

According to Wills, this extra burden increased the complexity of the deal: “Before, none of that was required. You had this explosion in terms of specifications and requirements.”

He sought assurances through the contract, such as holding back payments if performance targets weren’t achieved and also including motivational triggers to incentivise G4S to meet its targets. Wills said G4S showed their confidence by putting pen to paper: “I needed some assurances that they knew the penalties if they couldn’t deliver and they signed on the dotted line. They showed their commitment by signing in December 2011.”

A spokesman for G4S said: “There was lots of discussion surrounding the figures in the run up to the signing of the contract in December 2011, but the final figure of 10,400 was agreed between us and LOCOG then. A year earlier when we signed our initial contract with LOCOG we had been asked to provide 2,000 security officers.”

Two weeks before the Games, G4S announced that it would not be able to provide the required number of guards. LOCOG was then able to implement a back-up plan, with the military making up for the shortfall.

Chief executive Nick Buckles has since admitted the company regretted taking on the deal, which cost the firm £50 million. A G4S review of the company led to the resignation of two senior executives and a plan to address project management and risk assessment.

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