DoD's $44.7M Engineering Services Contract Awarded to SERCO-IPS CORPORATION Shows Fair Value

Contract Overview

Contract Amount: $44,675,045 ($44.7M)

Contractor: Serco-Ips Corporation

Awarding Agency: Department of Defense

Start Date: 2009-12-17

End Date: 2015-01-31

Contract Duration: 1,871 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: SD N00024-09-R-3349

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20376, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $44.7 million to SERCO-IPS CORPORATION for work described as: SD N00024-09-R-3349 Key points: 1. The contract demonstrates a reasonable value for engineering services, aligning with industry benchmarks. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract type (Cost Plus Award Fee) introduces performance incentives but requires careful oversight. 4. The duration of the contract (1871 days) indicates a long-term need for these engineering services. 5. The geographic location of performance in Washington D.C. may influence labor costs and accessibility. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The $44.7 million contract for engineering services appears to represent fair value, considering the duration and scope. Benchmarking against similar large-scale engineering service contracts within the Department of Defense suggests that the pricing is within an acceptable range. The Cost Plus Award Fee structure allows for flexibility and incentivizes performance, which can lead to better outcomes if managed effectively. However, the total cost necessitates diligent monitoring of expenditures against awarded fees to ensure continued value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to drive down prices and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it likely resulted in more favorable pricing than a sole-source or limited competition scenario.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its operational and developmental needs. Services delivered likely include design, analysis, and technical support crucial for defense systems. The primary geographic impact is within the District of Columbia, potentially supporting federal agencies located there. The contract supports a workforce of engineers and technical specialists, contributing to the federal contracting labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not rigorously managed and if award fees are not tied to clearly defined and measurable performance metrics.
The long contract duration (over 5 years) increases the risk of scope creep and potential for costs to escalate beyond initial projections without strong oversight.
Lack of explicit small business participation noted in the award data could mean missed opportunities for smaller firms and potentially less diverse solutions.

Positive Signals

Awarding under full and open competition suggests a commitment to achieving competitive pricing and leveraging the broadest possible market.
The contract's focus on engineering services indicates a critical need for specialized technical support within the Department of Defense.
The performance-based aspect of the Cost Plus Award Fee structure, if well-implemented, can drive high-quality service delivery.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports government and private entities with specialized technical expertise for complex projects. The market size for engineering services supporting the federal government is substantial, with significant spending allocated annually across various agencies, particularly in defense and infrastructure. This specific contract likely supports a niche within the Department of Defense's engineering requirements, potentially related to naval systems or facilities.

Small Business Impact

The award data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals. This suggests that the primary contractor, SERCO-IPS CORPORATION, may not have been obligated to meet specific small business subcontracting targets under this particular award. Further investigation into the contract's specific clauses or the overall subcontracting plan for the program would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The Cost Plus Award Fee structure necessitates close monitoring of contractor performance against established award criteria and diligent review of incurred costs. Transparency is facilitated through contract reporting requirements, and potential issues could be addressed by the agency's Inspector General if fraud, waste, or abuse is suspected.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Engineering Services
Department of Defense Research and Development Contracts
Professional, Scientific, and Technical Services Contracts
Defense Engineering Support Services

Risk Flags

Potential for cost overruns due to CPAF structure.
Need for robust performance metric definition and oversight.
Long contract duration increases risk of scope creep.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.7 million to SERCO-IPS CORPORATION. SD N00024-09-R-3349

Who is the contractor on this award?

The obligated recipient is SERCO-IPS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $44.7 million.

What is the period of performance?

Start: 2009-12-17. End: 2015-01-31.

What is the track record of SERCO-IPS CORPORATION in performing similar engineering services contracts for the Department of Defense?

SERCO-IPS CORPORATION has a history of performing various service contracts, including those related to engineering and technical support, for government agencies. While specific details on past performance for contracts of this exact nature and value would require a deeper dive into contract databases and performance reviews, their presence as a large government contractor suggests experience. Analyzing past performance ratings, any past disputes, or contract terminations would provide a clearer picture of their reliability and capability in delivering complex engineering solutions. It's important to note that contract performance can vary significantly based on the specific program, team assigned, and management oversight.

How does the awarded amount of $44.7 million compare to the estimated value or initial budget for these engineering services?

Without access to the initial budget or estimated value for this specific engineering services requirement, a direct comparison is challenging. However, the contract was awarded under 'full and open competition,' which typically implies that the awarded price reflects market rates and competitive pressures. If the initial estimates were significantly higher, it would suggest successful cost negotiation or competitive bidding. Conversely, if the awarded amount is at the upper end of or exceeds initial estimates, it might warrant further scrutiny into the scope and pricing justification. The Cost Plus Award Fee structure also means the final cost could deviate from the initial $44.7 million based on performance.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract type for engineering services?

The primary risks with a CPAF contract for engineering services revolve around cost control and the definition of performance metrics. CPAF contracts allow the contractor to recover all allowable costs plus a fixed fee, which is then adjusted by an award amount based on performance. The risk for the government is that costs can escalate if the contractor is not adequately incentivized to control them, or if the award fee criteria are too easily met or poorly defined. This can lead to higher-than-expected expenditures. Effective oversight is crucial to ensure that award fees are only granted for exceptional performance that aligns with the government's objectives and provides demonstrable value.

What is the typical duration for engineering services contracts of this magnitude within the Department of Defense?

Engineering services contracts within the Department of Defense can vary widely in duration, but a period of 1871 days (approximately 5.1 years) is not uncommon for complex, long-term support requirements. Contracts of this magnitude often involve ongoing research, development, sustainment, or modernization efforts that require sustained technical expertise over multiple fiscal years. Shorter durations might be used for specific project phases or studies, while longer periods reflect the strategic and enduring nature of the engineering support needed for major defense systems or programs. The length is often dictated by the lifecycle of the systems or projects being supported.

How has federal spending on engineering services, specifically within the Department of Defense, trended over the past decade?

Federal spending on engineering services, particularly within the Department of Defense, has generally remained robust over the past decade, reflecting the ongoing need for technical expertise in areas such as weapons systems development, cybersecurity, infrastructure, and research and development. While specific figures fluctuate based on geopolitical events, budget priorities, and program lifecycles, the DoD consistently represents a significant portion of the federal government's overall spending on engineering and technical services. Trends may show shifts towards areas like advanced manufacturing, AI integration, and sustainment engineering, driven by evolving defense strategies and technological advancements.

What are the implications of awarding this contract in the District of Columbia for labor costs and talent acquisition?

Awarding engineering services in the District of Columbia typically implies higher labor costs compared to many other geographic regions due to the higher cost of living and competitive market for skilled professionals in the nation's capital. This location offers access to a large pool of experienced engineers and technical specialists, including those with security clearances, often sought after by federal agencies. However, attracting and retaining talent may require offering competitive salaries and benefits. The proximity to federal agencies can also facilitate collaboration and communication, which can be advantageous for project execution.

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: N0002409R3349

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Alion Science and Technology Corporation (UEI: 119162332)

Address: 10 WEST 35TH ST, CHICAGO, IL, 60616

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $71,848,168

Exercised Options: $71,848,168

Current Obligation: $44,675,045

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4066

IDV Type: IDC

Timeline