DoD awards $70M engineering services contract to Serco-IPS Corp for FFGX program
Contract Overview
Contract Amount: $69,980,071 ($70.0M)
Contractor: Serco-Ips Corporation
Awarding Agency: Department of Defense
Start Date: 2019-08-19
End Date: 2025-05-31
Contract Duration: 2,112 days
Daily Burn Rate: $33.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES FOR PMS515 FFGX PROGRAM.
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006
Plain-Language Summary
Department of Defense obligated $70.0 million to SERCO-IPS CORPORATION for work described as: ENGINEERING SERVICES FOR PMS515 FFGX PROGRAM. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is substantial, spanning over 2100 days, indicating a long-term need for these services. 4. The awardee, Serco-IPS Corporation, has secured a significant portion of the contract value. 5. The contract is for engineering services, a critical component for complex defense programs like FFGX. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.
Value Assessment
Rating: fair
Benchmarking the value of this $70 million contract for engineering services is challenging without specific performance metrics or detailed cost breakdowns. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control. While CPFF can be appropriate for research and development or when costs are uncertain, it requires robust oversight to ensure value for money. Comparing this to similar engineering services contracts within the Department of Defense would provide a clearer picture of its cost-effectiveness.
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 bids. The presence of 5 bids suggests a reasonable level of competition for these specialized engineering services. A competitive process generally helps in achieving fair market prices and encourages contractors to offer their best value propositions.
Taxpayer Impact: Taxpayers benefit from a competitive process as it is intended to drive down costs and ensure the government receives the best possible services for the allocated funds.
Public Impact
The primary beneficiaries are the Department of the Navy and the FFGX program, which will receive essential engineering support. Services delivered include critical engineering expertise for the FFGX program, likely encompassing design, development, testing, and integration. The geographic impact is centered in Washington D.C., where the contract is managed and likely where some services will be performed. The contract supports a specialized workforce of engineers and technical professionals, contributing to the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize cost overruns if not closely monitored.
- Long contract duration (2112 days) requires sustained oversight to ensure continued value and performance.
- Specific details on the engineering tasks and deliverables are not fully elaborated, making direct performance assessment difficult.
Positive Signals
- Awarded through full and open competition, indicating a robust and fair bidding process.
- Multiple bidders (5) suggest a healthy competitive environment for this type of service.
- Engineering services are crucial for the success of complex defense acquisition programs like FFGX.
Sector Analysis
This contract falls within the Engineering Services sector, a vital component of the broader defense industrial base. The FFGX program represents a significant investment in naval capabilities, requiring specialized technical expertise. Spending on engineering services for major defense platforms can range from millions to billions of dollars, depending on the program's complexity and lifecycle stage. This $70 million award is a substantial but not extraordinary sum for such a critical support role within a major naval shipbuilding program.
Small Business Impact
The data indicates 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 set-aside provision. However, the prime contractor, Serco-IPS Corporation, may engage small businesses as subcontractors for specialized support, though this is not explicitly detailed in the provided information.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial and performance monitoring is expected to ensure costs remain justified and deliverables are met. Transparency is facilitated through contract award databases, but detailed performance reports and Inspector General involvement would depend on specific program requirements and any identified issues.
Related Government Programs
- Naval Shipbuilding Programs
- Defense Engineering Services
- FFGX Frigate Program
- Department of the Navy Contracts
- Cost Plus Fixed Fee Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires vigilant oversight to manage cost risks.
- Long contract duration necessitates sustained monitoring for performance and value.
- Potential for scope creep in complex engineering projects.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, full-and-open-competition, cost-plus-fixed-fee, delivery-order, washington-dc, major-contract, shipbuilding, ffgx-program
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $70.0 million to SERCO-IPS CORPORATION. ENGINEERING SERVICES FOR PMS515 FFGX PROGRAM.
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 $70.0 million.
What is the period of performance?
Start: 2019-08-19. End: 2025-05-31.
What is the track record of Serco-IPS Corporation with similar Department of Defense engineering contracts?
Serco-IPS Corporation has a history of performing various service contracts for the U.S. government, including those within the defense sector. While specific details on their track record with FFGX-like programs require deeper database analysis, their presence as a bidder and awardee on significant contracts suggests established capabilities. Reviewing past performance evaluations, contract modifications, and any disputes or terminations associated with Serco-IPS's prior defense engineering contracts would provide a more comprehensive understanding of their reliability and expertise in delivering complex technical solutions. This includes assessing their ability to manage budgets, adhere to schedules, and meet technical specifications on comparable projects.
How does the $70 million value compare to other engineering service contracts for naval programs of similar scale?
The $70 million value for engineering services on the FFGX program appears to be within a reasonable range for a major naval platform development, especially considering the contract's duration extending to May 2025. However, a precise comparison requires benchmarking against contracts for similar frigates or other major surface combatants, factoring in the specific engineering phases (e.g., design, prototyping, testing). Without access to detailed cost breakdowns and scope of work for comparable contracts, it's difficult to definitively assess if this represents superior or inferior value. The Cost Plus Fixed Fee structure also adds a layer of complexity to direct value comparisons, as the final cost can fluctuate based on actual expenses incurred.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for complex engineering services?
The primary risk with a CPFF contract for complex engineering services is the potential for cost overruns. While the contractor receives a fixed fee, the 'cost plus' component means the government reimburses the contractor's allowable costs. If the contractor's costs exceed initial estimates, the government pays more, potentially exceeding the anticipated budget. This structure can reduce the contractor's incentive to control costs rigorously, as their profit (the fixed fee) remains constant regardless of cost efficiency. Effective risk mitigation requires robust government oversight, detailed cost tracking, and clear definition of allowable costs to ensure the government is not paying for inefficiencies or unnecessary expenses.
How effective are the current oversight mechanisms for this contract, given its CPFF structure and long duration?
The effectiveness of oversight for this CPFF contract hinges on the diligence of the Department of the Navy's program management and contracting officers. Robust oversight involves continuous monitoring of the contractor's incurred costs against the contract ceiling, regular reviews of technical progress, and validation of the necessity and reasonableness of all expenses. For a long-duration contract like this (over 2100 days), periodic re-evaluations of the program's direction and cost projections are crucial. The presence of an Inspector General's office within the DoD provides an additional layer of accountability, capable of conducting audits and investigations into potential fraud, waste, or abuse. However, the ultimate effectiveness depends on resource allocation and the proactive engagement of the government team.
What is the historical spending trend for engineering services related to naval shipbuilding programs within the Department of the Navy?
Historical spending on engineering services for naval shipbuilding programs within the Department of the Navy is substantial and fluctuates based on the number and scale of active shipbuilding initiatives. Major programs like destroyers, carriers, and submarines, as well as new classes like the FFGX, necessitate significant investments in design, systems engineering, integration, and lifecycle support. Trends often show increased spending during the design and initial construction phases, with ongoing needs for modernization and upgrades throughout a vessel's service life. Analyzing historical data reveals patterns of reliance on both internal government expertise and external contractors, with contract values often in the tens to hundreds of millions of dollars for critical engineering support roles.
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: N0016419R3002
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12930 WORLDGATE DR STE 600, HERNDON, VA, 20170
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $70,068,878
Exercised Options: $70,068,878
Current Obligation: $69,980,071
Actual Outlays: $2,468,190
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $29,595,296
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4066
IDV Type: IDC
Timeline
Start Date: 2019-08-19
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 00:00:00
Last Modified: 2025-07-01
More Contracts from Serco-Ips Corporation
- Support Services for PEO Subs — $311.1M (Department of Defense)
- Ship Design Services — $300.2M (Department of Defense)
- Base Year Support — $247.8M (Department of Defense)
- Support to the Program Office Will Assist in Their Efforts to Satisfy Both Current and Future Navy/Marine Corps Needs for Amphibious Warfare. the Contractor Shall Supply a Full Range of Professional Support Services Across ALL of PMS377 S Highly Interrelated Product Lines in the Areas of Program Management, Engineering, Logistics, Test and Evaluation (T&E), Business/Financial Management and Government Furnished Equipment/Government Furnished Information (gfe/Gfi) — $227.3M (Department of Defense)
- PMS 377, Professional Support Services (PSS) in the Areas of T&E, Technical Management Support, Acquisition and Life Cycle Management Support, Landing Craft Planning Yard Support, Integrated Logistics Support (ILS), GFE Support, and Fleet Support — $209.9M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)