Navy amphibious warfare support contract awarded to Serco-IPS Corporation for over $227 million

Contract Overview

Contract Amount: $227,348,223 ($227.3M)

Contractor: Serco-Ips Corporation

Awarding Agency: Department of Defense

Start Date: 2011-07-18

End Date: 2020-03-31

Contract Duration: 3,179 days

Daily Burn Rate: $71.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUPPORT TO THE PROGRAM OFFICE WILL ASSIST IN THEIR EFFORTS TO SATISFY BOTH CURRENT AND FUTURE NAVY/MARINE CORPS NEEDS FOR AMPHIBIOUS WARFARE. THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SUPPORT SERVICES ACROSS ALL OF PMS377 S HIGHLY INTERRELATED PRODUCT LINES IN THE AREAS OF PROGRAM MANAGEMENT, ENGINEERING, LOGISTICS, TEST AND EVALUATION (T&E), BUSINESS/FINANCIAL MANAGEMENT AND GOVERNMENT FURNISHED EQUIPMENT/GOVERNMENT FURNISHED INFORMATION (GFE/GFI).

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $227.3 million to SERCO-IPS CORPORATION for work described as: SUPPORT TO THE PROGRAM OFFICE WILL ASSIST IN THEIR EFFORTS TO SATISFY BOTH CURRENT AND FUTURE NAVY/MARINE CORPS NEEDS FOR AMPHIBIOUS WARFARE. THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SUPPORT SERVICES ACROSS ALL OF PMS377 S HIGHLY INTERRELATED PRODUCT LINES IN THE … Key points: 1. Contract provides comprehensive program management, engineering, logistics, and test & evaluation support for Navy/Marine Corps amphibious warfare needs. 2. Services span multiple product lines within the Program Executive Office, Amphibious Warfare (PEO(AW)). 3. Contract duration spans from July 2011 to March 2020, indicating a long-term support requirement. 4. The contract type is Cost Plus Fixed Fee (CPFF), which allows for cost reimbursement plus a fixed fee, potentially leading to cost overruns if not managed carefully. 5. The award was made under full and open competition, suggesting a robust bidding process. 6. The contract value of over $227 million reflects the significant scale and complexity of supporting major naval programs.

Value Assessment

Rating: good

The contract value of over $227 million for a period of nearly nine years suggests a substantial investment in program support. While specific cost breakdowns are not provided, the CPFF contract type implies that costs are reimbursed plus a fixed fee. Benchmarking this against similar large-scale program support contracts for major defense systems would be necessary for a precise value-for-money assessment. However, the duration and scope indicate a critical need for sustained expertise in program management and engineering for amphibious warfare.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to drive better pricing and service quality. The presence of two bids suggests a degree of competition, though a higher number of bidders would typically indicate a more robust market dynamic and potentially greater price discovery.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it generally leads to more competitive pricing and a wider range of innovative solutions, maximizing the value of federal dollars.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who receive essential support for their amphibious warfare capabilities. Services delivered include program management, engineering, logistics, and test & evaluation, crucial for the development and sustainment of naval platforms. The geographic impact is primarily within the defense sector, supporting national security objectives. Workforce implications include the employment of skilled professionals in program management, engineering, and logistics roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur costs, potentially leading to higher overall expenditures if not closely monitored.
The long duration of the contract (nearly 9 years) necessitates continuous oversight to ensure performance remains aligned with evolving program needs and budget constraints.
Limited information on specific performance metrics makes it challenging to fully assess the contractor's effectiveness and value delivered throughout the contract period.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded favorable terms.
The contract addresses critical support needs for the Navy/Marine Corps' amphibious warfare programs, indicating strategic importance.
The contractor, Serco-IPS Corporation, is providing a comprehensive range of professional support services, demonstrating capability across multiple domains.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense programs. The market for defense program support services is substantial, driven by the continuous need for specialized expertise in managing complex military acquisition and sustainment programs. Comparable spending benchmarks would involve analyzing other large, long-term support contracts awarded by the Department of Defense for major weapon systems or platform development.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited based on the provided information. Further analysis of subcontracting plans would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would be embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract awards databases, though detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Amphibious Assault Ship Programs
Littoral Combat Ship (LCS) Program Support
Program Executive Office (PEO) Contracts
Defense Engineering Services Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Performance Degradation Over Long Duration
Dependency on Single Contractor
Limited Public Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $227.3 million to SERCO-IPS CORPORATION. SUPPORT TO THE PROGRAM OFFICE WILL ASSIST IN THEIR EFFORTS TO SATISFY BOTH CURRENT AND FUTURE NAVY/MARINE CORPS NEEDS FOR AMPHIBIOUS WARFARE. THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SUPPORT SERVICES ACROSS ALL OF PMS377 S HIGHLY INTERRELATED PRODUCT LINES IN THE AREAS OF PROGRAM MANAGEMENT, ENGINEERING, LOGISTICS, TEST AND EVALUATION (T&E), BUSINESS/FINANCIAL MANAGEMENT AND GOVERNMENT FURNISHED EQUIPMENT/GOVERNMENT FURNISHED INFORMATION (GFE/GFI).

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 $227.3 million.

What is the period of performance?

Start: 2011-07-18. End: 2020-03-31.

What is the track record of Serco-IPS Corporation in supporting similar large-scale defense programs?

Serco-IPS Corporation, as part of the larger Serco Group, has a history of providing a wide range of services to government agencies, including defense. Their experience often encompasses program management, technical support, and operational services for complex systems. For large-scale defense programs, their track record would typically involve supporting acquisition, sustainment, and modernization efforts. Specific details on their performance for similar amphibious warfare or major naval platform programs would require a deeper dive into contract performance databases and agency reports. However, their ability to secure and execute a contract of this magnitude suggests a demonstrated capacity to meet the demanding requirements of the Department of Defense.

How does the cost-plus-fixed-fee (CPFF) structure impact the value for money in this contract?

The Cost-Plus-Fixed-Fee (CPFF) contract structure reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty in the costs. While it allows for flexibility and ensures the contractor is compensated for unforeseen challenges, it can also create less incentive for cost control compared to fixed-price contracts. The government bears the risk of cost overruns, as the fee is fixed regardless of the final cost. Therefore, effective government oversight, rigorous cost monitoring, and clear definition of allowable costs are crucial to ensure value for money under a CPFF arrangement. Without such controls, costs can escalate beyond initial estimates.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for a contract of this nature supporting program management, engineering, logistics, and test & evaluation, typical KPIs would likely include metrics related to schedule adherence, cost performance against budget, quality of deliverables (e.g., engineering reports, test results), responsiveness to task orders, and overall program support effectiveness. The Department of the Navy would establish these KPIs within the contract's Performance Work Statement (PWS) to ensure the contractor meets the program's objectives. Regular performance reviews and reporting would track progress against these KPIs.

What is the historical spending trend for similar program support services within the Department of the Navy?

Historical spending trends for program support services within the Department of the Navy are generally substantial and reflect the ongoing need for expertise in managing complex defense acquisition programs. The Navy consistently invests billions annually in various forms of support services, including program management, engineering, logistics, and technical assistance, across its diverse fleet and aviation programs. Spending in this category can fluctuate based on major acquisition programs, modernization efforts, and strategic priorities. Analyzing historical data for PEO(AW) or similar program executive offices would reveal trends in contract values, durations, and types of services procured, providing context for the $227 million awarded here.

What are the potential risks associated with relying on a single contractor for such a broad range of critical support services?

Relying on a single contractor for a broad range of critical support services, even if awarded through competition, carries inherent risks. These include potential complacency leading to reduced innovation or service quality over time, contractor 'lock-in' making it difficult to switch providers if performance degrades, and a lack of diverse perspectives that multiple contractors might bring. Furthermore, if the contractor experiences financial difficulties or significant operational disruptions, it could severely impact the program's continuity. Mitigating these risks requires robust contract management, continuous performance monitoring, and clear contingency planning by the government.

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: N0002410R3140

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Inc

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $228,870,345

Exercised Options: $228,870,345

Current Obligation: $227,348,223

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $7,153,091

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4066

IDV Type: IDC

Timeline