DoD's $40M Facilities Support Contract to SERCO INC shows long-term engagement with potential value concerns

Contract Overview

Contract Amount: $39,954,186 ($40.0M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2002-02-28

End Date: 2010-10-01

Contract Duration: 3,137 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to SERCO INC for work described as: Key points: 1. Contract duration of over 8 years suggests a stable, long-term relationship with the incumbent. 2. The firm fixed-price contract type provides cost certainty for the government. 3. The award was made under full and open competition, indicating a broad search for qualified bidders. 4. The contract's value of approximately $40 million over its life indicates a significant investment in facilities support. 5. The North American Industry Classification System (NAICS) code 561210 points to a focus on facilities support services. 6. The contract was awarded by the Department of the Air Force, a major component of the Department of Defense.

Value Assessment

Rating: fair

The contract's total value of $39.95 million over nearly 9 years averages to roughly $4.44 million per year. Without specific performance metrics or detailed cost breakdowns, it's challenging to definitively benchmark value for money. However, the extended duration without apparent re-competition could suggest either strong performance or a lack of aggressive price negotiation over time. Further analysis would require comparing the scope of services to similar contracts awarded in different regions or by different agencies.

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 likely considered. The fact that it was competed broadly is a positive sign for price discovery. However, the contract's long duration (from 2002 to 2010) means that the initial competition may not reflect current market conditions or pricing. The number of bids received during the original solicitation would provide more insight into the level of competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of offers, potentially leading to more competitive pricing and innovative solutions.

Public Impact

The primary beneficiaries are the Department of the Air Force and its personnel, who receive essential facilities support services. Services delivered likely include maintenance, repair, operations, and potentially other facility management functions. The geographic impact is centered in Ohio, where the contract was administered. The contract supports jobs within the facilities management and maintenance sectors, both directly with the contractor and indirectly through any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration without apparent re-competition could lead to complacency or reduced incentive for cost savings.
Lack of detailed performance data makes it difficult to assess if the government is receiving optimal value for its investment.
The contract's age means current market rates for similar services may have shifted significantly since its inception.

Positive Signals

Awarded under full and open competition, indicating a robust initial bidding process.
Firm fixed-price contract type provides budget certainty for the agency.
The contract served a critical function for the Department of the Air Force, ensuring operational readiness.

Sector Analysis

Facilities Support Services, categorized under NAICS code 561210, is a broad sector encompassing a wide range of services essential for the operation and maintenance of government and commercial facilities. This sector includes everything from janitorial services to complex building systems management. Spending in this area is often substantial for large organizations like the Department of Defense, which operate extensive physical infrastructure. Benchmarking this contract's value would involve comparing its annual cost against the square footage or type of facilities managed, as well as the specific services included, relative to industry standards.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, SERCO INC, would have had the discretion to subcontract portions of the work, but without specific subcontracting plans or reports, the extent of small business participation is unknown.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Air Force contracting and program management offices. As a Department of Defense contract, it would also be subject to oversight from the Department of Defense Inspector General (DoDIG) for potential fraud, waste, and abuse. Transparency is generally facilitated through contract award databases like FPDS, which provide basic details on contract value, duration, and parties involved. However, detailed performance reports and cost audits are typically not publicly available.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Air Force Base Operations Support
Government Facilities Management Services
NAICS 561210 Facilities Support Services

Risk Flags

Long-term contract duration without re-competition
Limited public data on performance specifics
Potential for price increases over extended contract life

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to SERCO INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is SERCO INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $40.0 million.

What is the period of performance?

Start: 2002-02-28. End: 2010-10-01.

What specific facilities support services were included under this contract?

The contract falls under NAICS code 561210, which covers Facilities Support Services. This broad category typically includes a range of services such as general building maintenance and repair, operations of building systems (HVAC, electrical, plumbing), groundskeeping, waste management, security, and janitorial services. Without the specific contract statement of work (SOW), the precise suite of services provided by SERCO INC under this particular award remains undefined. However, given the duration and value, it likely encompassed a comprehensive set of operational and maintenance functions critical to the Air Force installations it served in Ohio.

How does the annual cost of this contract compare to industry benchmarks for similar services?

The contract's total value of approximately $40 million over roughly 8.7 years equates to an average annual cost of about $4.6 million. Benchmarking this requires knowing the scope of services and the size/type of facilities managed. For instance, if this contract covered extensive base operations for a large Air Force installation, the cost might be reasonable. However, if it pertained to a smaller facility or a limited scope of services, it could be on the higher end. Industry benchmarks often use cost per square foot or cost per facility user. Without such granular data for this specific contract, a precise comparison is not feasible, but the annual spend is substantial.

What was the track record of SERCO INC with the Department of Defense prior to or during this contract?

SERCO INC has a long history of contracting with the U.S. government, including the Department of Defense, across various service areas. Prior to and during this specific facilities support contract (2002-2010), SERCO was involved in numerous other government contracts. Assessing their overall track record would involve reviewing performance evaluations, past performance questionnaires, and any documented disputes or contract terminations across their portfolio. Generally, large contractors like Serco have a diverse range of contract experiences, with performance varying across different contracts and agencies. Specific details on their performance on this particular $40 million contract would require access to internal DoD performance reviews.

Were there any significant performance issues or contract disputes associated with this award?

Information regarding specific performance issues, disputes, or contract modifications for this particular award (DCA120-02-D-0001) is not readily available in public databases. Contracts of this magnitude and duration often undergo modifications to adjust scope, funding, or terms. Without access to the contract's full history, including any contract-related litigation, claims, or formal performance reviews, it's impossible to definitively state whether there were significant issues. Agencies typically maintain internal records of contractor performance, which would be the primary source for such information.

How has federal spending on facilities support services evolved since this contract was awarded?

Federal spending on facilities support services has generally increased over the years, driven by the need to maintain aging infrastructure and the outsourcing of non-core functions. Since this contract spanned 2002-2010, it predates much of the significant growth in government contracting for facility management seen in the subsequent decade. Trends indicate a move towards more integrated facility management, performance-based contracts, and greater emphasis on sustainability and energy efficiency. The total federal outlay for services under NAICS 561210 has likely seen fluctuations but an overall upward trend, influenced by budget appropriations, geopolitical events, and infrastructure investment priorities.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › MOTOR POOL OR PACKING/CRATING

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Group PLC (UEI: 298452707)

Address: 20 CLEMENTON RD E 102S, GIBBSBORO, NJ, 01

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline