Capita's (LSE:CPI) Smart DCC subsidiary will pay £200,000 into the Ofgem Voluntary Redress Fund after the energy regulator closed an investigation into its procurement practices via Alternative Action.
Smart DCC manages Britain's smart meter data communications network under a licence that requires procurement to be conducted without undue preference, discrimination, or non-competitive award.
Ofgem reviewed five contracts awarded by DCC between 2021 and 2024, finding that one was awarded through a non-competitive process and one directly to Capita, DCC's parent company.
The regulator concluded that DCC technically breached Licence Condition 16.4 when it awarded a Fundamental Service Capability contract to Capita, though it found no identifiable consumer detriment arising from the decision.
Ofgem also flagged broader weaknesses in DCC's record-keeping, stating that documentation of procurement decisions fell short of expectations for a monopoly licensee procuring high-value, long-term services ultimately funded by consumers.
As part of the settlement, DCC agreed to improve its procurement processes and ensure that future contracts of this type are not awarded to related undertakings as defined under its licence.
