DoD's $20M Wired Telecom Contract with SERCO Services Inc. Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $20,035,642 ($20.0M)
Contractor: Serco Services Inc.
Awarding Agency: Department of Defense
Start Date: 2011-01-05
End Date: 2015-03-31
Contract Duration: 1,546 days
Daily Burn Rate: $13.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: TO 1013 HEMP
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80916
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $20.0 million to SERCO SERVICES INC. for work described as: TO 1013 HEMP Key points: 1. Contract awarded to SERCO SERVICES INC. for wired telecommunications carriers. 2. Full and open competition after exclusion of sources was used. 3. The contract duration is 1546 days. 4. The total award amount is $20,035,642.43. 5. The contract falls under the Wired Telecommunications Carriers sector.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Benchmarking against similar CPFF contracts for telecommunications services is needed to assess if the fixed fee is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract utilized 'Full and Open Competition After Exclusion of Sources,' which suggests a competitive process but warrants further investigation into the reasons for source exclusion. This method can impact price discovery if the excluded sources were significant competitors.
Taxpayer Impact: The total award of over $20 million represents a significant taxpayer investment. Ensuring the competitive process yielded the best value is crucial for maximizing taxpayer benefit.
Public Impact
Ensures critical wired telecommunications infrastructure for the Department of Defense. Supports national security by providing essential communication services. Potential for cost savings through competitive bidding, though the CPFF structure requires careful oversight. Impacts the telecommunications industry by awarding contracts to established providers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost creep with CPFF contract type.
- Need to verify the justification for excluding sources in the competition.
- Limited visibility into the specific services provided and their necessity.
Positive Signals
- Utilized a form of full and open competition.
- Awarded to a known entity, SERCO SERVICES INC.
- Contract duration provides stability for service provision.
Sector Analysis
The Wired Telecommunications Carriers sector is vital for government operations, providing essential connectivity. Spending in this sector can vary widely based on infrastructure needs and technological advancements. Benchmarking against similar DoD contracts for telecommunications services would provide better context for this award's value.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis is needed to determine the extent of small business participation.
Oversight & Accountability
The CPFF contract type necessitates robust oversight to manage costs and ensure the fixed fee remains appropriate. The 'exclusion of sources' clause requires scrutiny to ensure it was justified and did not unduly limit competition.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Lack of transparency regarding source exclusion.
- Need for detailed performance metrics to assess effectiveness.
- Unclear small business participation.
Tags
wired-telecommunications-carriers, department-of-defense, co, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.0 million to SERCO SERVICES INC.. TO 1013 HEMP
Who is the contractor on this award?
The obligated recipient is SERCO SERVICES INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $20.0 million.
What is the period of performance?
Start: 2011-01-05. End: 2015-03-31.
What was the specific justification for excluding certain sources from the 'Full and Open Competition' process, and did this exclusion impact the final price?
The justification for excluding sources needs to be thoroughly reviewed. If significant competitors were excluded without a valid technical or security reason, it could have limited price discovery and potentially led to a higher-than-necessary cost for the government. Understanding the rationale is key to assessing the fairness of the competition and its impact on taxpayer value.
How does the fixed fee in this Cost Plus Fixed Fee (CPFF) contract compare to industry benchmarks for similar telecommunications services, and what mechanisms are in place to control cost overruns?
Assessing the fixed fee against industry standards for comparable CPFF telecommunications contracts is crucial. Robust government oversight, including regular audits and performance reviews, is essential to monitor costs, prevent scope creep, and ensure the contractor operates efficiently. Without this, the CPFF structure risks escalating costs beyond initial projections.
What specific telecommunications services were procured under this contract, and how effectively did they meet the Department of Defense's operational requirements?
Detailed information on the specific services rendered is necessary to evaluate their effectiveness. Performance metrics and user feedback from the Department of Defense would indicate whether the contract successfully met its objectives. Without this, it's difficult to ascertain the true value and impact of the $20 million expenditure.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1050 N NEWPORT RD, COLORADO SPRINGS, CO, 80916
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,243,928
Exercised Options: $20,243,928
Current Obligation: $20,035,642
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA251704D0001
IDV Type: IDC
Timeline
Start Date: 2011-01-05
Current End Date: 2015-03-31
Potential End Date: 2015-03-31 00:00:00
Last Modified: 2017-08-17
More Contracts from Serco Services Inc.
- National Benefits Center (NBC) Records Support Program — $324.8M (Department of Homeland Security)
- Operation of National Visa Center and Kentucky Consular Center — $194.9M (Department of State)
- Records Support Services — $40.3M (Department of Homeland Security)
- HC Services — $34.1M (Office of Personnel Management)
- Service Center Operations Support Services (scoss) — $34.0M (Department of Homeland Security)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)