Re Contract

Issued:    23 December 2003                            
                                                       
Release:                                               
                                                       
Contact:   See below                                   

            DTI select Serco as Preferred Bidder for management and            

              operation of the UK's National Physical Laboratory               

Science Minister, Lord Sainsbury, has announced the Department of Trade and
Industry's selection of Serco Group plc ('Serco') as preferred bidder for the
operation of the National Physical Laboratory ('NPL') from 1 April 2004. The
contract is valued at approximately £500 million over 10 years.

Serco is the incumbent contractor at NPL, having managed the government-owned
national measurement institute since 1995. During this time, revenues and
scientific staffing levels have increased and the Laboratory has consolidated
its global leadership in measurement science, providing national calibration
services that underpin UK engineering, healthcare and environmental analysis.

NPL is currently in the process of moving into a state of the art laboratory
building on its Teddington site, creating a firm foundation for continuing
scientific excellence into the twenty-first century.

The NPL contract is part of a wider Serco portfolio of science-based business.
The Group is a significant provider of nuclear research and safety services.
Serco is also a contractor to the European Space Agency and the world's largest
particle physics laboratory at CERN.

Commenting on the award, Kevin Beeston, Serco Group's Executive Chairman, said:

'It is excellent news that DTI have expressed their faith in us and see Serco
as a partner in science-based business. When we won the NPL contract in 1995,
it was definitely seen as a milestone for the company, applying Serco's
outsourcing expertise to a complex and prestigious task for the nation. In
rebidding the contract, we took great care to avoid complacency. We have
offered DTI a bold new vision for the laboratory, without straying from the
national measurement mission.'

Dr Bob McGuiness, Managing Director of NPL Management Limited added:

'We are delighted that DTI has expressed its preference for the Serco bid.
Building on the success of the last eight years, we will work with DTI to
implement an exciting new phase in NPL's development as a world leader in
measurement science. NPL will continue to innovate - developing standards and
measurement technologies that will have a major impact on British
competitiveness and quality of life. Developments in miniaturisation, for
example, are creating major new challenges for measurement science and the
applied physics undertaken at NPL has never been more relevant to the nation's
prosperity'.

                                   - Ends -                                    

For further information please contact Serco Group plc:

T [phone]

Thea Healy Investor Relations Manager

Notes to Editors:

  * The National Physical Laboratory (NPL) is a world-leading centre in the
    development and application of highly accurate measurement techniques
   
  * The Laboratory, which was founded in 1900, underpins the national
    measurement system, ensuring consistency and traceability of measurement
    throughout the UK
   
  * Among its hundreds of programmes, NPL delivers the nation's time signal,
    supports quality control in manufacturing and creates standards for safety
    in medical ultrasound
   
  * The Laboratory, based in Teddington in Surrey, employs more than 600 staff,
    including 450 highly qualified scientists. Turnover in 2002 was £50M
   
  * Serco is one of the world's largest public service companies operating on a
    global basis in a diverse range of sectors, including defence, aerospace
    and science, public transport and traffic management, health, education,
    justice and local government
   
  * Serco is primarily focused on the public sector, which represents around
    90% of its business and has a strong public service ethos. In partnership
    with customers and staff Serco aims to enhance service levels and
    operational efficiency by shortening decision making chains, reducing
    bureaucracy and achieving continuous improvement
   
  * More information on Serco can be found at www.serco.com
   
  * The acronym CERN comes from the earlier French title - 'Conseil Européen
    pour la Recherché Nucléaire'. CERN is an international scientific
    laboratory providing research and development facilities in the field of
    particle physics.