Serco Inc. awarded $38.8M for R&D support to OSD, with a 1932-day duration

Contract Overview

Contract Amount: $38,837,960 ($38.8M)

Contractor: Serco Inc.

Awarding Agency: Department of the Interior

Start Date: 2005-12-15

End Date: 2011-03-31

Contract Duration: 1,932 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: SUPPORT TO OSD

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $38.8 million to SERCO INC. for work described as: SUPPORT TO OSD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Award Fee, which incentivizes contractor performance. 3. The duration of 1932 days indicates a long-term need for the services provided. 4. The contract was awarded by the Department of the Interior, supporting OSD functions. 5. Research and Development in Physical, Engineering, and Life Sciences is the primary NAICS code. 6. The contract value of approximately $38.8 million over its life suggests significant investment in R&D support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contracts. The Cost Plus Award Fee structure allows for flexibility but can lead to higher costs if not managed tightly. The total award value of $38.8 million over nearly 6 years suggests a moderate annual spend, but the actual cost to the government depends heavily on the award fee structure and incurred costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With 3 bidders, the competition level appears moderate, which can contribute to price discovery. However, the specific details of the bidding process and the final award price relative to initial bids are not provided.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better quality services.

Public Impact

The Office of the Secretary of Defense (OSD) benefits from specialized research and development support. Services delivered likely involve scientific research, engineering analysis, and technical support for defense initiatives. The geographic impact is primarily within Virginia, where the contractor is located. Workforce implications include employment for researchers, scientists, and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not carefully monitored.
The long duration of the contract may present challenges in adapting to evolving R&D needs.
Limited information on specific performance metrics makes it difficult to fully assess value for money.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The Cost Plus Award Fee structure incentivizes contractor performance and achievement of objectives.
The contract supports critical research and development functions for the Department of Defense.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long-term investment, and often involves specialized expertise. Comparable spending benchmarks would typically be found within other government R&D contracts supporting defense or scientific agencies, where significant funding is allocated to advance technological capabilities.

Small Business Impact

There is no indication that this contract included small business set-asides. The contract value and nature of R&D support may not lend themselves to typical small business subcontracting opportunities, though specific subcontracting plans would need to be reviewed. The impact on the small business ecosystem is likely minimal unless specific R&D niches were subcontracted.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers, program managers, and potentially Inspector General reviews, especially given the Cost Plus Award Fee structure. Accountability measures are tied to meeting performance objectives and managing costs within the contract's framework. Transparency is generally facilitated through contract award databases, though detailed performance reports may be internal.

Related Government Programs

Department of Defense Research and Development Programs
OSD Support Services
Scientific and Technical Services Contracts
Cost Plus Award Fee Contracts

Risk Flags

Cost Plus Award Fee contract requires careful monitoring of costs and performance.
Long contract duration may pose risks related to evolving requirements.
Need for clear and measurable performance metrics to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $38.8 million to SERCO INC.. SUPPORT TO OSD

Who is the contractor on this award?

The obligated recipient is SERCO INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2005-12-15. End: 2011-03-31.

What was the contractor's track record prior to this award?

Information regarding Serco Inc.'s specific track record prior to this award is not detailed in the provided data. However, Serco is a large, established government contractor with a broad range of services across various agencies. A comprehensive assessment would require reviewing their past performance on similar contracts, including client feedback, any past performance issues, and their history with Cost Plus Award Fee contracts. Their overall size and longevity in the federal contracting space suggest a significant operational capacity, but specific performance on R&D support contracts would need further investigation.

How does the value of this contract compare to similar R&D support contracts?

Comparing the $38.8 million award value over 1932 days (approximately 5.3 years) requires context. This equates to an average annual value of roughly $7.3 million. This figure is moderate for large-scale R&D support contracts, especially those directly supporting the Department of Defense. Many major defense R&D programs can involve hundreds of millions or even billions of dollars. However, the specific nature of the 'support' and the scope of R&D activities are crucial. If this contract is for specialized, niche R&D support rather than broad program development, the value might be appropriate. Without knowing the specific deliverables and the competitive landscape for these particular services, a definitive comparison is difficult.

What are the primary risks associated with this contract?

The primary risks associated with this contract include: 1. Cost Overruns: As a Cost Plus Award Fee (CPAF) contract, there's a risk that costs could exceed initial estimates, especially if performance objectives are difficult to meet or if scope creep occurs. The award fee mechanism is intended to mitigate this, but requires diligent oversight. 2. Performance Risk: Ensuring the contractor consistently meets the R&D objectives and delivers high-quality support is critical. Failure to do so could impact OSD's research initiatives. 3. Long Duration Risk: A contract spanning over five years may face challenges in adapting to rapidly changing technological landscapes or evolving defense requirements. 4. Contractor Capability Risk: While Serco is a large firm, the specific technical expertise required for this R&D support must be consistently available and effective throughout the contract's life.

How effective is the Cost Plus Award Fee (CPAF) structure for this type of R&D support?

The Cost Plus Award Fee (CPAF) structure can be effective for R&D support contracts when well-defined performance objectives are established. It incentivizes the contractor to meet or exceed these goals by offering additional 'award fees' beyond the reimbursed costs. For R&D, where outcomes can be uncertain and innovation is key, CPAF allows for flexibility in cost management while pushing for desired results. However, its effectiveness hinges on the clarity and measurability of the award criteria. If objectives are vague or difficult to quantify, it can lead to disputes or ineffective incentives. Robust government oversight is essential to ensure fair evaluation of performance and appropriate fee determination.

What are the historical spending patterns for R&D support to OSD?

Historical spending patterns for R&D support to the Office of the Secretary of Defense (OSD) are substantial and represent a significant portion of the Department of Defense's overall research and development budget. OSD funds a wide array of research initiatives, from basic science to advanced technology development, often through contracts with private industry, universities, and research institutions. Spending fluctuates based on strategic priorities, technological advancements, and geopolitical factors. Contracts can range from small, targeted research grants to large, multi-year development programs. The $38.8 million awarded to Serco Inc. is one component within this larger, complex spending ecosystem, reflecting a specific need for R&D support services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Group PLC

Address: 1235 S CLARK ST, ARLINGTON, VA, 22202

Business Categories: Category Business, Emerging Small Business, Small Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $52,760,706

Exercised Options: $52,760,706

Current Obligation: $38,837,960

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline