DoD's $31M Serco Contract for Program Service Support Lacked Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $31,050,165 ($31.1M)
Contractor: Serco Inc.
Awarding Agency: Department of Defense
Start Date: 2010-06-09
End Date: 2011-02-19
Contract Duration: 255 days
Daily Burn Rate: $121.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: PROGAM SERVICE SUPPORT IWS 1.0, 2.0, 4.0, 7.0 AND SIPMS
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003
Plain-Language Summary
Department of Defense obligated $31.1 million to SERCO INC. for work described as: PROGAM SERVICE SUPPORT IWS 1.0, 2.0, 4.0, 7.0 AND SIPMS Key points: 1. Significant contract value of $31 million awarded without competition. 2. Sole-source award to Serco Inc. limits price discovery and potential savings. 3. Engineering services sector often sees competitive bidding, making this award notable. 4. Potential for inflated costs due to lack of competitive pressure.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, raises concerns about cost efficiency. Without competitive benchmarks, it's difficult to assess if the $31 million awarded represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Serco Inc., was considered. This significantly limits price discovery and the government's ability to secure the best possible price.
Taxpayer Impact: The lack of competition likely resulted in higher costs for taxpayers than if the contract had been competitively bid.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. Limited transparency into the justification for a sole-source award. Potential for reduced innovation and service quality without market pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition justification
Positive Signals
- Contract awarded to a known entity (Serco Inc.)
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330). Spending in this sector can vary widely, but competitive bidding is generally expected to drive efficiency and cost savings.
Small Business Impact
The data does not indicate any specific provisions or considerations for small businesses in this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants further scrutiny regarding the justification and oversight processes employed by the Department of the Navy.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Sole-source award justification
- Potential for cost overruns
- Limited transparency
- Absence of small business participation
Tags
engineering-services, department-of-defense, dc, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.1 million to SERCO INC.. PROGAM SERVICE SUPPORT IWS 1.0, 2.0, 4.0, 7.0 AND SIPMS
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 Navy).
What is the total obligated amount?
The obligated amount is $31.1 million.
What is the period of performance?
Start: 2010-06-09. End: 2011-02-19.
What was the specific justification for awarding this significant contract solely to Serco Inc. without exploring competitive options?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required services. This could be due to unique capabilities, urgent needs, or specific government requirements that only one contractor can meet. Without access to the specific justification documentation, it is impossible to determine the precise rationale behind this decision.
How did the Department of the Navy ensure cost reasonableness for this Cost Plus Fixed Fee contract awarded without competition?
Ensuring cost reasonableness for a Cost Plus Fixed Fee (CPFF) contract without competition is challenging. Agencies typically rely on historical pricing data, independent government cost estimates, and thorough review of the contractor's proposed costs. However, the absence of competitive bids means there is no market-based validation of these costs, increasing the risk of overpayment.
What is the potential impact on future program support if the government consistently relies on sole-source contracts for these services?
Consistent reliance on sole-source contracts can stifle innovation and lead to complacency among contractors, as market pressure to improve services or reduce costs is diminished. It can also create a perception of favoritism and may deter new entrants from developing capabilities, ultimately limiting the government's options and potentially increasing long-term costs.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002410R5130
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Alion Science and Technology Corporation (UEI: 119162332)
Address: 1100 NEW JERSEY AVE SE STE 200, WASHINGTON, DC, 98
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,433,354
Exercised Options: $32,433,354
Current Obligation: $31,050,165
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2010-06-09
Current End Date: 2011-02-19
Potential End Date: 2011-02-19 00:00:00
Last Modified: 2012-09-29
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