DoD's $85M Systems Engineering Support contract awarded to Serco Inc. shows fair value with 3 bidders

Contract Overview

Contract Amount: $85,114,246 ($85.1M)

Contractor: Serco Inc.

Awarding Agency: Department of Defense

Start Date: 2010-12-01

End Date: 2016-05-31

Contract Duration: 2,008 days

Daily Burn Rate: $42.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SYSTEMS ENGINEERING SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $85.1 million to SERCO INC. for work described as: SYSTEMS ENGINEERING SUPPORT Key points: 1. The contract's value appears reasonable given the scope of engineering services provided. 2. A competitive bidding process with three bidders suggests a healthy market for these services. 3. The firm-fixed-price structure helps mitigate cost overrun risks for the government. 4. This contract supported critical defense operations, indicating its strategic importance. 5. The engineering services sector is robust, with significant government spending. 6. The duration of the contract (over 5 years) allowed for sustained support.

Value Assessment

Rating: good

The total award amount of approximately $85.1 million for over five years suggests a reasonable annual spend for comprehensive systems engineering support. Benchmarking against similar large-scale engineering services contracts within the Department of Defense indicates that this pricing falls within expected ranges. The firm-fixed-price contract type further enhances value by shifting cost risk to the contractor, encouraging efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three distinct bidders vying for the opportunity. The presence of multiple bidders indicates a competitive marketplace for these specialized engineering services. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a range of qualified providers.

Taxpayer Impact: The competitive nature of this award likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The Department of Defense directly benefited from enhanced systems engineering capabilities. Critical defense systems likely received improved design, development, and integration support. The contract supported operations and readiness within the defense sector. The workforce implications include employment for skilled systems engineers and related technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly, despite fixed-price nature.
Reliance on a single contractor for critical systems engineering could pose long-term dependency risks.

Positive Signals

Firm-fixed-price structure incentivizes contractor efficiency and cost control.
Award to an established firm suggests a degree of reliability and expertise.
Full and open competition generally leads to better pricing and quality.

Sector Analysis

The engineering services sector is a vital component of the federal procurement landscape, particularly for agencies like the Department of Defense that require complex technical expertise. This contract falls within the broader category of professional, scientific, and technical services, which sees substantial annual federal investment. Comparable spending benchmarks for large-scale engineering support contracts often range in the tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears minimal. However, the prime contractor, Serco Inc., may engage small businesses as subcontractors, which would be detailed in their subcontracting plan, but this information is not available here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of Defense. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are recorded.

Related Government Programs

Defense Engineering Services
Systems Integration Support
Technical Consulting Services
BPA Call Contracts

Risk Flags

Contract Duration
Potential for Scope Creep
Reliance on Single Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.1 million to SERCO INC.. SYSTEMS ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is SERCO INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $85.1 million.

What is the period of performance?

Start: 2010-12-01. End: 2016-05-31.

What is Serco Inc.'s track record with the Department of Defense for similar systems engineering contracts?

Serco Inc. has a significant history of contracting with the Department of Defense across various service areas. While this specific $85.1 million contract for systems engineering support from 2010-2016 is a notable example, their broader portfolio includes IT services, logistics, and program management support for defense agencies. Analyzing their performance on other large DoD contracts, including any past performance issues or commendations, would provide a more comprehensive view of their reliability and capability in delivering complex engineering solutions. A review of contract award histories and performance evaluations would be necessary for a detailed assessment.

How does the $85.1 million total award compare to the initial estimated value or ceiling of the BPA call?

The provided data indicates a total award amount of $85,114,246.06. Without the specific details of the base contract or the Blanket Purchase Agreement (BPA) call's ceiling value, it's challenging to definitively state how the final award compares to the initial estimate. However, the fact that the award reached this figure suggests that the government fully utilized or nearly utilized the available funding under the BPA call. If the ceiling was significantly higher, it might indicate underutilization; if it was close to the award amount, it suggests the scope was well-defined and executed.

What were the specific systems engineering tasks performed under this contract?

The contract designation 'SYSTEMS ENGINEERING SUPPORT' is broad. Specific tasks likely encompassed a range of activities critical to defense systems lifecycle management. This could include requirements analysis, system design and architecture, integration and testing, verification and validation, technical documentation, risk management, and lifecycle cost analysis. Given the DoD context, these services would be applied to complex platforms, software, or C4ISR systems, ensuring their functionality, interoperability, and adherence to stringent military standards.

Were there any performance issues or contract modifications during the contract period (2010-2016)?

The provided data does not include details on contract modifications or performance issues. A thorough analysis would require accessing contract modification history and performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS). Significant modifications could indicate changes in scope, funding adjustments, or challenges encountered during performance. Conversely, a lack of modifications might suggest a stable execution, though it doesn't preclude minor performance issues that were resolved without formal changes.

What is the typical annual spending for systems engineering support within the DoD, and how does this contract fit?

Annual spending on systems engineering support within the Department of Defense can fluctuate significantly based on modernization priorities, acquisition programs, and geopolitical factors. However, it generally represents a substantial portion of the overall R&D and procurement budgets. Contracts like this one, totaling over $85 million across more than five years, are indicative of the significant investment required for complex defense systems. This contract likely represents a mid-to-large scale engagement for specialized engineering expertise, fitting within the DoD's ongoing need for technical support across its vast array of platforms and systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ003410R0116

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1400 CRYSTAL DR SUITE 1400, ARLINGTON, VA, 22202

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $85,114,246

Exercised Options: $85,114,246

Current Obligation: $85,114,246

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003411A0001

IDV Type: BPA

Timeline