Under the contract, which will begin by November 1997, Capita will manage Naafi's accounts, payroll, personnel and pensions administration and related IT services.
Geoffrey Dart, Naafi's chief executive, said:
'This is one of the final pieces in Naafi's restructuring and change programme. This contract will save us well over£1m per annum in costs; allows us to reduce our UK head office premises from three to one and improve the quality and speed of our support services in particular our financial information. Naafi is now well on the way to returning to significant profitability while supporting the British armed forces with first class services wherever in the world they serve.'