DoD Awards $146M Engineering Services Contract to Serco Inc. for Ship Production Planning and Systems Support

Contract Overview

Contract Amount: $146,136,136 ($146.1M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2022-08-25

End Date: 2026-08-24

Contract Duration: 1,460 days

Daily Burn Rate: $100.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SHIP PRODUCTION PLANNING AND ENGINEERING SYSTEMS, COMBAT SYSTEMS TEST ENGINEERING POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT ENGINEERING, CONFIGURATION AND DATA MANAGEMENT AND DDG 51 CLASS PROGRAM INFORMATION SYSTEM SUPPORT TO ASSIST PMS 400D

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20002

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $146.1 million to SERCO INC for work described as: SHIP PRODUCTION PLANNING AND ENGINEERING SYSTEMS, COMBAT SYSTEMS TEST ENGINEERING POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT ENGINEERING, CONFIGURATION AND DATA MANAGEMENT AND DDG 51 CLASS PROGRAM INFORMATION SYSTEM SUPPORT TO ASSIST PMS 400D Key points: 1. Contract awarded to Serco Inc. for critical ship production and combat systems engineering. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract has a duration of 1460 days, indicating a long-term need. 4. Potential risks include cost overruns given the Cost Plus Fixed Fee structure.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee structure introduces risk for cost overruns. Benchmarking against similar engineering services contracts is difficult without more granular cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically promotes competitive pricing. However, the Cost Plus Fixed Fee pricing arrangement can lead to less predictable final costs.

Taxpayer Impact: Taxpayer funds are being used for essential defense engineering services. The competitive award aims to ensure value, but cost control will be crucial.

Public Impact

Supports the U.S. Navy's shipbuilding and combat systems development. Ensures continued engineering and management support for the DDG 51 class program. Aims to maintain critical systems engineering and data management capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee pricing can lead to cost overruns.
Long contract duration may not adapt well to rapidly changing technology.
Specific performance metrics are not detailed, making accountability assessment difficult.

Positive Signals

Awarded through full and open competition.
Supports a critical defense program (DDG 51 class).
Long-term contract provides stability for essential services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval shipbuilding and defense systems. Spending in this sector is substantial, driven by national security requirements and complex technological development.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract award. Large prime contractors may subcontract, but direct small business participation is not evident.

Oversight & Accountability

The Department of the Navy is the contracting agency, responsible for oversight. The contract's duration and complexity necessitate robust oversight to ensure performance and manage costs effectively.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee pricing model.
Potential for scope creep and cost overruns.
Long contract duration may not align with evolving technological needs.
Lack of specific performance metrics in the provided data.
Limited visibility into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.1 million to SERCO INC. SHIP PRODUCTION PLANNING AND ENGINEERING SYSTEMS, COMBAT SYSTEMS TEST ENGINEERING POST DELIVERY PLANNING, ENGINEERING AND MANAGEMENT ENGINEERING, CONFIGURATION AND DATA MANAGEMENT AND DDG 51 CLASS PROGRAM INFORMATION SYSTEM SUPPORT TO ASSIST PMS 400D

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 $146.1 million.

What is the period of performance?

Start: 2022-08-25. End: 2026-08-24.

What is the projected total cost for the entire contract duration, and how does it compare to similar engineering support contracts for naval programs?

The current award is for $146,136,136.30. Without detailed breakdowns of labor categories, hours, and overhead rates, a direct comparison to similar contracts is challenging. Benchmarking would require access to more granular cost data and an understanding of the specific technical requirements and complexities involved in supporting the DDG 51 class program.

What are the key performance indicators (KPIs) and risk mitigation strategies in place to manage the Cost Plus Fixed Fee structure and ensure effective service delivery?

The provided data does not specify the key performance indicators (KPIs) or detailed risk mitigation strategies. For a Cost Plus Fixed Fee contract, effective oversight typically involves rigorous monitoring of costs, regular performance reviews, and clear contractual clauses for managing scope changes and ensuring deliverables meet quality standards.

How will the effectiveness of the engineering and management support be measured throughout the contract's four-year period to ensure optimal value for taxpayer investment?

Effectiveness is typically measured through defined milestones, quality of deliverables, adherence to schedules, and successful resolution of engineering challenges. The Department of the Navy's contracting officers and technical representatives would be responsible for monitoring Serco Inc.'s performance against contract requirements and ensuring the support provided aligns with program objectives and delivers value.

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: N0016421R3009

Offers Received: 2

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, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $190,078,345

Exercised Options: $150,703,742

Current Obligation: $146,136,136

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $17,645,762

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8498

IDV Type: IDC

Timeline