G4S Should Waive $92 Million Olympic Security Fee, Lawmakers Say

G4S (GFS) Plc should waive its 57 million-pound ($92 million) fee for providing security at the London Olympic Games, a panel of lawmakers said.

The company was “firmly and solely” to blame for failing to provide enough security staff for games venues, which led to armed service personnel being called up to fill the gaps, the House of Commons Home Affairs Committee said in a report published in London today. G4S should also be put on a list of “high-risk” companies to inform public-service procurement.

“The largest security company in the world, providing a contract to their biggest U.K. client, turned years of carefully laid preparations into an 11th-hour fiasco,” Keith Vaz, the opposition Labour Party lawmaker who chairs the cross-party panel, said in an e-mailed statement. “The taxpayer must not pay for G4S’s mistakes. G4S should waive its 57 million-pound management fee and also compensate its staff and prospective staff who it treated in a cavalier fashion.”

The company, which made a 2.5 million-pound donation to an armed-forces charity to thank service personnel for their work at the games, is negotiating over how much of the fee it should receive, Chief Executive Officer Nick Buckles told lawmakers on Sept. 11. G4S filled 83 percent of the contracted shifts and provided 7,800 of the security staff it was contracted to provide, Buckles said. The military deployment peaked at 18,200 troops, the report said.

The company should pay staff who were not used after going through training and accreditation as a result of G4S management failures, the committee said. The armed forces should also be considered as part of planning for major events, rather than as a back-up, it said.

High-Risk Providers

G4S had contracts with 10 government departments and 14 police forces in England and Wales worth 759 million pounds in the year ending April 2011, the report said. The U.K. should keep a central record of failures to avoid giving contracts to companies that don’t deliver, it said.

“We recommend that the government establish a register of high-risk providers, who have a track-record of failure in the delivery of public services,” the report said. “This would provide a single source of information for those conducting procurement exercises about companies which are failing or have failed in the delivery of public contracts.”

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.