DoD's $24.5M consulting contract with SERCO SERVICES INC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $24,461,462 ($24.5M)

Contractor: Serco Services Inc

Awarding Agency: Department of Defense

Start Date: 2012-03-30

End Date: 2016-05-31

Contract Duration: 1,523 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: A4D

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to SERCO SERVICES INC for work described as: A4D Key points: 1. Contract value appears reasonable given the scope of administrative management consulting services. 2. Competition was limited, potentially impacting price discovery and value for taxpayers. 3. Performance timeline was extended, suggesting potential scope creep or execution challenges. 4. The contract falls within a common spending category for management consulting. 5. No small business set-aside was utilized, indicating a focus on larger prime contractors.

Value Assessment

Rating: fair

The contract's total value of approximately $24.5 million over its duration suggests a moderate level of investment for administrative management consulting. Benchmarking against similar contracts for general management consulting services indicates that the pricing is within a typical range, though without detailed task-level data, a precise value-for-money assessment is challenging. The firm-fixed-price structure provides some cost certainty, but the extended performance period could imply adjustments or additional costs not immediately apparent.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders were theoretically able to participate. However, the specific number of bids received is not provided, which is crucial for assessing the actual level of competition. A robust competitive process typically leads to better pricing and innovation. The absence of bid counts leaves uncertainty about whether the government secured the best possible value.

Taxpayer Impact: While full and open competition was the method, the lack of bid count data makes it difficult to definitively state the benefit to taxpayers. Ideally, this would have driven down costs, but without knowing how many companies competed, the true competitive pressure is unknown.

Public Impact

The Department of Defense benefits from enhanced administrative management and general management consulting services. Services provided likely support operational efficiency and strategic planning within the Army. The contract's geographic impact is primarily within Virginia, where the agency is located. Workforce implications are likely related to the utilization of external expertise to supplement internal capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended performance period could indicate potential for scope creep or unforeseen challenges.
Lack of specific bid count data hinders a thorough assessment of competitive pressure.
Firm-fixed-price contracts can sometimes lead to contractor cost-cutting if not closely monitored.

Positive Signals

Awarded under full and open competition, allowing for broad market participation.
Firm-fixed-price contract provides cost certainty for the government.
Contract duration is substantial, suggesting a significant and ongoing need for services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This is a significant market for government contracting, with agencies frequently seeking external expertise to improve efficiency, implement new strategies, and manage complex operations. Spending in this category is driven by the need for specialized knowledge and objective analysis that internal staff may not possess.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This suggests that the primary focus was on securing services from larger, potentially more specialized firms. The impact on the small business ecosystem is neutral to negative, as opportunities were not explicitly directed towards them through this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Accountability is established through the firm-fixed-price contract terms, requiring SERCO SERVICES INC to deliver specified services within the agreed budget. Transparency is generally maintained through contract databases, though detailed performance reports are often internal.

Related Government Programs

Management and Financial Consulting, Acquisition and Technology Services
Professional Services
Defense Consulting Services

Risk Flags

Extended performance period may indicate scope adjustments or delays.
Lack of bid count data limits assessment of competitive intensity.
No explicit small business subcontracting goals mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to SERCO SERVICES INC. A4D

Who is the contractor on this award?

The obligated recipient is SERCO SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $24.5 million.

What is the period of performance?

Start: 2012-03-30. End: 2016-05-31.

What specific administrative management and general management consulting services were rendered under this contract?

The contract falls under NAICS code 541611, which covers administrative management and general management consulting services. These services typically include providing advice and assistance on matters of management organization, planning, and control; business policy formulation and implementation; and administrative procedures. For the Department of the Army, this could encompass a wide range of support, such as improving internal processes, developing strategic plans, enhancing organizational structures, or advising on operational efficiencies. Without access to the specific task orders or statements of work, the precise nature of the services remains general, but they are aimed at enhancing the administrative and managerial functions of the agency.

How does the $24.5 million contract value compare to similar consulting contracts awarded by the Department of Defense?

The $24.5 million total value for this contract, awarded over approximately 4 years (March 2012 - May 2016), places it in the mid-to-large range for individual consulting engagements within the Department of Defense. The DoD frequently awards multi-million dollar contracts for management and consulting services, often exceeding this amount for larger, more complex projects. However, comparing it directly requires access to a database of similar contracts, considering factors like duration, scope, and specific services. Given the firm-fixed-price nature and the duration, the value appears to be within a reasonable range for comprehensive consulting support, though without specific task-level details, a definitive value-for-money assessment is difficult.

What were the key performance indicators (KPIs) or metrics used to evaluate SERCO SERVICES INC's performance?

Specific Key Performance Indicators (KPIs) or metrics for this contract are not publicly detailed in the provided data. However, for administrative management and general management consulting services, typical performance evaluation criteria would include the successful delivery of agreed-upon reports, recommendations, and implementation support; adherence to project timelines; client satisfaction; and the achievement of defined project objectives. For a firm-fixed-price contract, meeting the scope of work within the established price is a primary indicator. The contracting officer and relevant program managers would have been responsible for monitoring progress and assessing SERCO's performance against the contract requirements.

What is the historical spending trend for administrative management and general management consulting services by the Department of the Army?

The Department of the Army, like other branches of the DoD, has a significant and consistent history of spending on administrative management and general management consulting services (NAICS 541611). This spending is driven by the need for external expertise to address complex organizational challenges, implement new policies, improve operational efficiencies, and support strategic initiatives. Historical data typically shows substantial annual outlays in this category, fluctuating based on budgetary priorities, specific agency needs, and the initiation of new large-scale projects. This particular $24.5 million contract represents one component of that broader, ongoing investment in consulting support.

Were there any identified risks or challenges associated with this contract, and how were they managed?

While specific risk details are not provided, potential risks inherent in a contract of this nature and duration include scope creep, contractor performance issues, and challenges in integrating external advice with internal agency operations. The extended performance period (1523 days) might suggest that some challenges were encountered, potentially leading to modifications or adjustments. Risk management would typically involve close oversight by the contracting officer's representative (COR), regular progress reviews, clear communication channels, and adherence to the contract's terms and conditions. The firm-fixed-price structure itself helps mitigate financial risk for the government, provided the scope is well-defined and managed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91WAW08R0008

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Limited

Address: 12930 WORLDGATE DR STE 600, HERNDON, VA, 20170

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,477,898

Exercised Options: $27,477,898

Current Obligation: $24,461,462

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $2,654,097

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91WAW08D0014

IDV Type: IDC

Timeline