DoD's $150M PEO SHIPS Contract Awarded to Serco-IPS Corporation for Engineering Services

Contract Overview

Contract Amount: $150,701,880 ($150.7M)

Contractor: Serco-Ips Corporation

Awarding Agency: Department of Defense

Start Date: 2016-05-25

End Date: 2022-01-14

Contract Duration: 2,060 days

Daily Burn Rate: $73.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::OT::IGF PEO SHIPS (PMS 400D) OVERARCHING PROGRAM AND ACQUISITION MANAGEMENT; BUSINESS AND FINANCIAL PLANNING AND EXECUTION; SHIP PRODUCTION PLANNING AND ENGINEERING; SYSTEMS ENGINEERING; COMBAT SYSTEMS TEST ENGINEERING; POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT; ENGINEERING SERVICES, CONFIGURATION AND DATA MANAGEMENT; LOGISTICS SUPPORT AND INTEGRATED PERFORMANCE SUPPORT FOR ALL PMS 400D PROGRAMS.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $150.7 million to SERCO-IPS CORPORATION for work described as: IGF::OT::IGF PEO SHIPS (PMS 400D) OVERARCHING PROGRAM AND ACQUISITION MANAGEMENT; BUSINESS AND FINANCIAL PLANNING AND EXECUTION; SHIP PRODUCTION PLANNING AND ENGINEERING; SYSTEMS ENGINEERING; COMBAT SYSTEMS TEST ENGINEERING; POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT; ENG… Key points: 1. Contract awarded for comprehensive program and acquisition management for PMS 400D programs. 2. Serco-IPS Corporation secured the contract through full and open competition. 3. The contract spans over 5 years, indicating a significant long-term need. 4. The Cost Plus Incentive Fee (CPIF) structure aims to incentivize performance and cost control.

Value Assessment

Rating: good

The contract's Cost Plus Incentive Fee (CPIF) structure suggests a focus on performance and cost efficiency. Benchmarking against similar large-scale engineering service contracts is difficult without specific unit cost data, but the total award value appears reasonable for the scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, allowing multiple bidders to participate. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The competitive nature of the award is expected to yield cost savings for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Supports critical naval shipbuilding programs, impacting national defense capabilities. Ensures continued engineering and logistical support for existing and future naval assets. The long duration of the contract suggests sustained investment in naval modernization. Potential for job creation within the defense engineering and support sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPIF contracts can lead to cost overruns if not closely monitored.
Reliance on a single contractor for extensive services may pose long-term risks.
Scope creep could increase the final cost beyond initial projections.

Positive Signals

Full and open competition ensures a competitive pricing environment.
Long contract duration provides stability and predictability for program execution.
Focus on engineering and acquisition management is crucial for complex defense projects.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense programs. Spending in this area is substantial, driven by the need for advanced technological development and maintenance of military assets.

Small Business Impact

The data indicates the prime contractor is Serco-IPS Corporation, and there is no explicit mention of small business participation. Further investigation would be needed to determine if small businesses are involved as subcontractors.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial for CPIF contracts to manage costs and ensure performance objectives are met.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPIF structure.
Long-term reliance on a single contractor.
Complexity of managing diverse engineering and support services.
Need for continuous government oversight to ensure performance and cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $150.7 million to SERCO-IPS CORPORATION. IGF::OT::IGF PEO SHIPS (PMS 400D) OVERARCHING PROGRAM AND ACQUISITION MANAGEMENT; BUSINESS AND FINANCIAL PLANNING AND EXECUTION; SHIP PRODUCTION PLANNING AND ENGINEERING; SYSTEMS ENGINEERING; COMBAT SYSTEMS TEST ENGINEERING; POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT; ENGINEERING SERVICES, CONFIGURATION AND DATA MANAGEMENT; LOGISTICS SUPPORT AND INTEGRATED PERFORMANCE SUPPORT FOR ALL PMS 400D PROGRAMS.

Who is the contractor on this award?

The obligated recipient is SERCO-IPS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $150.7 million.

What is the period of performance?

Start: 2016-05-25. End: 2022-01-14.

What specific performance metrics are tied to the incentive fee structure, and how are they measured?

The incentive fee structure is designed to reward Serco-IPS Corporation for achieving specific performance targets related to cost, schedule, and technical performance. These metrics are typically defined in the contract's Performance Work Statement (PWS) and are monitored through regular reporting and government evaluations. The effectiveness of the incentive lies in aligning the contractor's goals with the government's objectives, driving efficiency and quality.

What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for such a large program?

CPIF contracts, while incentivizing performance, carry risks of cost overruns if the base cost estimates are inaccurate or if scope creep occurs. The government bears a significant portion of the cost risk. Effective oversight, clear definition of scope, and rigorous change control processes are essential to mitigate these risks and ensure the contract remains within budget and delivers the intended value.

How does this contract contribute to the overall modernization and readiness of the U.S. Navy's fleet?

This contract is vital for the PEO SHIPS (Program Executive Office, Ships) which manages the acquisition, modernization, and sustainment of naval vessels. By providing comprehensive program management, engineering, and logistical support, it ensures that naval platforms are developed, built, and maintained to meet operational requirements, directly contributing to the Navy's readiness and technological edge.

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: N0002415R3003

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $156,733,346

Exercised Options: $156,733,346

Current Obligation: $150,701,880

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $131,512,406

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