Mitie’s CMA Investigation – What’s the Latest?

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30 March 2022

The Guardian reported that the UK competition regulator raided Mitie’s offices after an accusation of breaking competition law, but what do we know so far about the CMA investigation?

 

The CMA Investigation into Mitie Group PLC, Mitie Care and Custody Ltd and PAE Incorporated

 

In March 2022, the Competition and Markets Authority launched an investigation regarding UK Home Office contracts for Heathrow and Derwentside Immigration Removal Centres in the UK.

The investigation relates to suspicion of anti-competitive conduct in procurement processes, which may infringe Chapter I of the Competition Act 1998 (CA98).

The relationship in question relates to Mitie Group, Mitie Care and Custody Ltd and PAE Incorporated.

The initial investigation, which will be conducted between March and September 2022 will include the issuance of information requests and a review of information gathered.

 

Who is PAE Incorporated?

 

Pacific Architects and Engineers (PAE Incorporated) is an American-based firm headquartered in Virginia. The company is described as a “major service supplier” to American government services such as the U.S. Department of State and the Central Intelligence Agency.

PAE Incorporated was publicly traded on the NASDAQ in 2020, but after merging with Amentum Government Services Holdings LLC,  PAE common stock and warrants ceased trading on the Nasdaq stock exchange. 

 

What is the Relationship Between PAE Incorporated and Mitie Group?

 

PAE Incorporated and Mitie own a joint venture called Landmarc, which manages facilities for the Ministry of Defence.

Therefore, the breach of competition law relates to the manner in which PAE Incorporated and Mitie Group competed for the Heathrow and Derwentside home office contracts.

 

How Has Mitie Responded?

 

Mitie followed the news with an RNS announcement (RNS Number: 6657D) stating that the company “strongly condemns anti-competitive practices and is co-operating fully with the CMA and the investigation.”

The announcement also states that Mitie is confident that it has “no case to answer” and will be fully exonerated.

Other details in the announcement included information that Mitie withdrew from the Derwentside IRC tender process, without submitting a bid, due to the Home Office's 'lotting' conditions, which would have prevented a single bidder from winning both contracts. 

Mitie confirmed that it remains engaged in the Heathrow IRC tender process, through Mitie Care and Custody Limited.

 

What Does The Guardian Article Claim?

 

The Guardian claims that CMA investigators “raided” Mitie’s HQ at The Shard and that senior staff emails are being examined.

The Guardian’s source claims that documents were seized and that the CMA has “not so far made a request to interview the Mitie chief executive”, Phil Bentley.

Picture: a photograph of the London skyline, showing The Shard, where Mitie's HQ is based image Credit: Pexels

Article written by Ella Tansley | Published 30 March 2022

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