DoD's $200M Engineering Services Contract with Serco Inc. Lacked Competition
Contract Overview
Contract Amount: $199,588,147 ($199.6M)
Contractor: Serco Inc.
Awarding Agency: Department of Defense
Start Date: 2011-12-16
End Date: 2018-02-22
Contract Duration: 2,260 days
Daily Burn Rate: $88.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: PROFESSIONAL SUPPORT SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003
Plain-Language Summary
Department of Defense obligated $199.6 million to SERCO INC. for work described as: PROFESSIONAL SUPPORT SERVICES Key points: 1. Significant spending of $199.6M on engineering services. 2. Sole provider Serco Inc. held the contract. 3. Contract duration was 2260 days, spanning over 7 years. 4. Awarded by the Department of the Navy, a major DoD component.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee (CPIF) structure can incentivize cost overruns. Without competitive bidding, it's difficult to assess if the pricing reflects fair market value for engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no competition was sought. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The long contract duration suggests a critical, ongoing need for these engineering services. Reliance on a single contractor for essential services raises concerns about continuity and potential price gouging.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Essential engineering services provided
- Long-term contract stability
Sector Analysis
Engineering services are crucial for defense projects, involving design, analysis, and technical support. Spending benchmarks vary widely based on project complexity and scope, but a $200M contract over seven years for a single entity warrants scrutiny regarding efficiency.
Small Business Impact
The data indicates this contract was not awarded to small businesses, suggesting large prime contractors are handling these engineering services. Further analysis would be needed to determine if small businesses were subcontracted.
Oversight & Accountability
The sole-source nature of this award raises questions about the oversight processes that led to a lack of competition. Robust oversight should ensure competitive opportunities are maximized.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for overpayment due to lack of competition.
- Sole-source award limits market competition.
- Cost-plus contract type carries inherent cost escalation risk.
- Long contract duration may indicate missed opportunities for re-competition.
- Lack of transparency in the award process.
Tags
engineering-services, department-of-defense, dc, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $199.6 million to SERCO INC.. PROFESSIONAL SUPPORT SERVICES
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 $199.6 million.
What is the period of performance?
Start: 2011-12-16. End: 2018-02-22.
What was the justification for awarding this significant engineering services contract on a sole-source basis?
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, proprietary technology, or urgent needs. Without specific documentation, it's impossible to confirm the exact rationale, but such justifications are subject to strict federal acquisition regulations.
How did the CPIF structure impact the final cost compared to a fixed-price contract?
A Cost Plus Incentive Fee (CPIF) contract allows for sharing of cost savings or overruns between the government and the contractor based on pre-negotiated targets. While it can incentivize efficiency, it also introduces uncertainty in the final cost. Without a fixed price, the government bears more risk of cost escalation, and the incentive structure's effectiveness depends heavily on the realism of the targets.
What performance metrics were used to evaluate Serco Inc.'s effectiveness under this contract?
Performance metrics for engineering services contracts typically include adherence to technical specifications, project timelines, budget management, and quality of deliverables. For a CPIF contract, specific performance incentives tied to these metrics would have been established. Evaluating effectiveness requires reviewing the contractor's performance against these established metrics and incentive clauses.
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: N0002411R4409
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Alion Science and Technology Corporation
Address: 1100 NEW JERSEY AVE SE STE 200, WASHINGTON, DC, 20003
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $209,114,267
Exercised Options: $209,114,267
Current Obligation: $199,588,147
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $50,939,765
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-12-16
Current End Date: 2018-02-22
Potential End Date: 2018-02-22 00:00:00
Last Modified: 2025-04-21
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