CMA ends Mitie probe over immigration centre contracts

Britain’s competition regulator has closed an investigation into outsourcing giant Mitie over its bidding process for two Home Office contracts.

The Competition and Markets Authority originally launched a probe last March into Mitie and US firm PAE for suspected ‘anti-competitive conduct’ related to deals to provide services to the Heathrow and Derwentside Immigration Removal Centres.

Mitie won a two-year contract in 2021 to manage the latter site, which is situated in County Durham and is the UK’s main female immigration detention facility.

Closure: The CMA has ended a probe into Mitie and US firm PAE for suspected ‘anti-competitive conduct’ related to the bidding process for two Home Office contracts

It considered going for another £461million contract to offer services, such as cleaning, education and security, to both centres over a nine-year period. 

But the group withdrew from the Derwentside tender process, telling investors that Home Office rules prevented one company from holding both contracts. PAE also decided to stand down from the procurement process.

The CMA subsequently began an inquiry, which saw it raid Mitie’s offices, after receiving information that ‘led to a reasonable suspicion that the parties had infringed competition law’.

But following nine months of examination, the public body provisionally closed its case after concluding that PAE had withdrawn from the contracts of its own volition and not because of any ‘anti-competitive deals’ struck with Mitie.

On Tuesday, the CMA said the investigation had been closed as there were ‘no grounds for action.’

Mitie shares remained flat on Tuesday morning, up by just 0.1 per cent to 77.6p, although their value has increased by about a quarter in the past 12 months.

Headquartered in London’s Shard building, Mitie offers an extensive 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 revealed that it won a five-year ‘multimillion pound’ deal from NATS, which provides air traffic control services to major British airports such as London Heathrow and Gatwick.

The Home Office has awarded the group billions in contracts over many years to provide, among other things, healthcare to people in police custody and security at hotels housing refugees and asylum centres.

Mitie also provided security at quarantine hotels during the height of the pandemic, when it also managed testing sites and supplied fever-screening technology for businesses, giving its profits and turnover a massive boost.

Growth slowed as lockdown restrictions were lifted, yet in recently published third-quarter results, the company reported total revenue of just over £1billion on the back of strong underlying growth.

The company said trading benefited from price inflation, new contract gains and acquisitions, including energy equipment installer Custom Solar and telecoms firms 8point8 and DAEL Ventures UK.

This post first appeared on Dailymail.co.uk