DoD's $38M engineering support contract awarded to Serco-IPS Corporation shows fair value with 3 bidders

Contract Overview

Contract Amount: $38,191,558 ($38.2M)

Contractor: Serco-Ips Corporation

Awarding Agency: Department of Defense

Start Date: 2014-06-10

End Date: 2019-06-09

Contract Duration: 1,825 days

Daily Burn Rate: $20.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTICAL, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, PROJECT MANAGEMENT, AND QUALITY ASSURANCE SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION (GXP), THE POLYMER ENGINEERING AND UNDERWATER SENSOR BRANCH (GXPS), AND THE LOGISTICS BRANCH (GXPQ)

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $38.2 million to SERCO-IPS CORPORATION for work described as: IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTICAL, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, PROJECT MANAGEMENT, AND QUALITY ASSURANCE SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION (GXP), THE POLYMER ENGINEERING AND UNDERWATER SENSOR BRANCH (GXPS), AND THE LOGISTIC… Key points: 1. The contract's value appears reasonable given the scope of engineering and technical support services provided. 2. Competition dynamics indicate a healthy market for these specialized services, with multiple bidders vying for the award. 3. Risk indicators are low, suggesting a well-defined scope and a capable contractor. 4. Performance context is tied to critical platform and launch systems, highlighting the importance of reliable support. 5. The contract positions Serco-IPS Corporation as a key provider within the Navy's engineering support sector.

Value Assessment

Rating: good

The $38.2 million contract for engineering and technical support services appears to offer good value. While direct comparisons are difficult without more granular data on specific tasks, the pricing seems competitive given the specialized nature of the work supporting platform and launch systems. The fixed-fee component suggests a degree of cost control and alignment with performance objectives. Benchmarking against similar large-scale engineering support contracts within the Department of Defense would provide further assurance of its value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of three bidders suggests a competitive environment for these specialized engineering services. A moderate number of bidders generally allows for price discovery while ensuring that the government can select from a pool of qualified contractors. The competition level here likely contributed to achieving a fair price for the services rendered.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and encourages innovation among contractors.

Public Impact

The Department of the Navy benefits from essential engineering, technical, and logistical support for its platform and launch systems. Services delivered include configuration management, data management, project management, and quality assurance, crucial for system integrity. The contract's geographic impact is centered in Indiana, supporting regional technical expertise and employment. Workforce implications include the utilization of skilled engineers and technical professionals within Serco-IPS Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not tightly managed.
Dependence on a single contractor for critical support functions.
Ensuring consistent quality across all delivered engineering services.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Contractor has a track record of providing similar services.
Clear definition of services required for platform and launch systems.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for such specialized support is characterized by high barriers to entry due to technical expertise requirements and security clearances. Spending in this area is often driven by the need for sustainment, modernization, and development of complex defense systems. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or its various branches.

Small Business Impact

This contract was not set aside for small businesses and does not appear to have specific subcontracting requirements mentioned in the provided data. The focus on full and open competition suggests that large businesses were the primary participants. The impact on the small business ecosystem is likely minimal unless Serco-IPS Corporation voluntarily engages small businesses for specialized support tasks not covered by their core capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Fixed Fee (CPFF) contract type, which incentivizes the contractor to manage costs effectively while meeting performance standards. Transparency is facilitated through contract award databases and reporting requirements, though detailed operational oversight specifics are not provided.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Platform and Launch Systems Support
Logistics and Configuration Management Services

Risk Flags

Potential for cost overruns if scope is not well-defined.
Contractor performance risk for specialized technical services.
Data security and intellectual property protection.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.2 million to SERCO-IPS CORPORATION. IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTICAL, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, PROJECT MANAGEMENT, AND QUALITY ASSURANCE SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION (GXP), THE POLYMER ENGINEERING AND UNDERWATER SENSOR BRANCH (GXPS), AND THE LOGISTICS BRANCH (GXPQ)

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 $38.2 million.

What is the period of performance?

Start: 2014-06-10. End: 2019-06-09.

What is Serco-IPS Corporation's track record with similar Department of Defense contracts?

Serco-IPS Corporation, as part of the larger Serco Group, has a substantial history of supporting government contracts, including those within the Department of Defense. Their expertise often spans areas like technical support, logistics, program management, and systems engineering. While specific performance metrics for this particular $38.2 million contract are not detailed here, the company's general profile suggests experience in delivering complex services to military branches. Further analysis would involve reviewing past performance evaluations and contract histories for Serco-IPS Corporation on comparable DoD engagements to assess their reliability and effectiveness in meeting technical and schedule requirements.

How does the value of this contract compare to similar engineering support contracts within the Navy?

Comparing the $38.2 million value of this contract requires access to a broader dataset of similar Navy engineering support contracts. However, given the duration of 1825 days (5 years) and the scope encompassing platform and launch systems, the average annual value of approximately $7.6 million appears reasonable for specialized technical and engineering services. Contracts for complex defense systems often involve significant investment in skilled personnel, project management, and quality assurance. Without specific details on the deliverables and the number of personnel involved, a precise benchmark is challenging. However, the presence of three bidders in a full and open competition suggests the price was considered competitive within the market for such services.

What are the primary risks associated with this type of engineering support contract?

The primary risks associated with this engineering support contract include potential scope creep, where the requirements may expand beyond the initial agreement, leading to cost overruns and schedule delays. Another risk is contractor performance, where the quality or timeliness of the delivered engineering and technical services might not meet the Navy's expectations. Dependence on a single contractor for critical functions also poses a risk if the contractor faces financial difficulties or operational issues. Furthermore, ensuring the security of sensitive data and intellectual property managed under the contract is paramount. Effective risk mitigation involves robust contract management, clear performance metrics, and regular communication between the Navy and Serco-IPS Corporation.

How effective is the Cost Plus Fixed Fee (CPFF) contract type in managing costs for this project?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance cost control with contractor incentive. In this structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it can also lead to less aggressive cost reduction efforts compared to fixed-price contracts. For complex engineering services like those provided here, where the exact costs might be difficult to predict upfront, CPFF can be effective in ensuring the government obtains necessary services while providing the contractor with a reasonable profit margin. Oversight is crucial to ensure costs are allowable and reasonable.

What is the historical spending trend for engineering services within the Department of the Navy?

Historical spending trends for engineering services within the Department of the Navy are substantial and generally increasing, driven by modernization efforts, platform sustainment, and the development of new defense technologies. The Navy consistently allocates significant portions of its budget to acquiring engineering, research, development, test, and evaluation (RDT&E) services. This $38.2 million contract represents a portion of that broader spending category. Analyzing historical data would reveal fluctuations based on defense priorities, budget cycles, and specific program needs, but the overall demand for specialized engineering support remains a consistent and significant expenditure for the Navy.

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: N0002413R3422

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Group PLC

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $43,510,154

Exercised Options: $43,510,154

Current Obligation: $38,191,558

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $2,032,533

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4066

IDV Type: IDC

Timeline