CMA ends Mitie probe over immigration centre contracts
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Competition watchdog ends investigation of outsourcer Mitie after finding no wrongdoing regarding immigration center contracts
- The Competition and Markets Authority originally launched an investigation in March last year
- Mitie and US company PAE were suspected of ‘anti-competitive behaviour’
The UK Competition Authority has closed an investigation into outsourcing giant Mitie over its bidding process for two Home Office contracts.
The Competition and Markets Authority launched an investigation last March into Mitie and US company PAE for suspected ‘anti-competitive behaviour’ in connection with deals to provide services to Heathrow and Derwentside immigration removal centres.
Mitie won a two-year contract in 2021 to manage the final site, which is in County Durham and is the UK’s main female immigrant detention facility.
Closure: The CMA has ended an investigation into Mitie and US company PAE for suspected ‘anti-competitive conduct’ in connection with the bidding process for two Home Office contracts
It was considering taking on a further £461m contract to provide services such as cleaning, education and security to both centers over a period of nine years.
But the group pulled out of the Derwentside tender process, telling investors that Home Office rules prevented one company from holding both contracts. PAE also decided to withdraw from the procurement process.
The CMA then launched an investigation, raiding Mitie’s offices after receiving information that “raised a reasonable suspicion that the parties had violated competition law.”
But after nine months of investigation, the government agency provisionally closed its case after concluding that PAE pulled out of the contracts of its own accord and not because of any “anti-competitive deals” made with Mitie.
On Tuesday, the CMA said the investigation was closed because there was “no cause for action.”
Mitie shares were flat on Tuesday morning, up just 0.1 percent to 77.6 pence, though their value has risen by about a quarter over the past 12 months.
Headquartered in the Shard Building in London, Mitie provides a comprehensive range of services to UK government departments and public sector organisations, including the National Health Service and the Ministry of Defence.
On Monday, the FTSE 250 firm announced it had won a five-year multi-million pound deal from NATS, which provides air traffic control services to major UK airports such as London Heathrow and Gatwick.
The Department of the Interior has awarded the group multibillion-dollar contracts over many years to provide, among other things, health care for people in police custody and security in hotels housing refugees and asylum seekers’ centers.
Mitie also provided quarantine hotel security during the height of the pandemic, when it also managed test sites and provided fever screening technology for businesses, boosting profits and revenue.
Growth slowed as lockdown restrictions were lifted, but in its recently published third quarter results, the company reported total revenue of just over £1bn on strong underlying growth.
The company said trading benefited from price inflation, new contract wins and acquisitions including power equipment installer Custom Solar and telecom companies 8point8 and DAEL Ventures UK.