QinetiQ expects to write off some $58 million in costs incurred after the United Kingdom this week said it is terminating for cost and schedule reasons the Package 1 procurement for the Defense Training Rationalization (DTR) program, and its selection of Metrix–formed by QinetiQ and Sodexo–to deliver it.
Secretary of State Liam Fox said, “…it is now clear Metrix cannot deliver an affordable, commercially-robust proposal within the prescribed period and it has therefore been necessary to terminate the DTR procurement and Metrix’s appointment as preferred bidder.”
DTR is to combine the technical and engineering training for the Royal Navy, Army and Royal Air Force onto a single site at St. Athan in South Wales.
Metrix was appointed preferred bidder in January 2007, with MoD expectation of a close in March 2011.
QinetiQ’s costs to date have been capitalized on the balance sheet of the Group, the company said in a statement. “We expect to write off the capitalized costs as an exceptional item and the QinetiQ Board’s expectations of Group underlying performance for the year remain unchanged by this.”
Fox told Parliament that to ensure momentum is not lost, work on the alternative options will begin as soon as possible, hoping to announce future plans in the spring.