DoD's $61M contract for ATFP system sustainment awarded to Serco Inc. shows fair value

Contract Overview

Contract Amount: $61,094,759 ($61.1M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2022-05-02

End Date: 2023-05-01

Contract Duration: 364 days

Daily Burn Rate: $167.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GLOBAL SUSTAINMENT OF ATFP SYSTEMS YEAR TWO

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $61.1 million to SERCO INC for work described as: GLOBAL SUSTAINMENT OF ATFP SYSTEMS YEAR TWO Key points: 1. Contract value of $61.1 million over one year indicates significant investment in defense readiness. 2. Awarded under full and open competition, suggesting a robust market for security system services. 3. The contract's fixed-price nature aims to control costs and provide predictable spending. 4. Performance is monitored by the Department of the Navy, ensuring adherence to security standards. 5. This contract falls within the broader 'Security Systems Services' sector, crucial for national defense infrastructure. 6. The duration of 364 days suggests a focus on ongoing operational support rather than long-term development.

Value Assessment

Rating: good

The contract's value of $61.1 million for one year of sustainment services for ATFP systems appears reasonable given the critical nature of defense infrastructure. Benchmarking against similar large-scale security system maintenance contracts within the Department of Defense suggests that pricing is competitive. The firm fixed-price structure further supports value for money by shifting cost-overrun risks to the contractor, Serco Inc. Without specific performance metrics or detailed cost breakdowns, a definitive 'excellent' rating is difficult, but the overall financial outlay seems aligned with industry standards for such specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The process likely involved a thorough evaluation of technical capabilities and pricing. The presence of open competition generally fosters price discovery and encourages contractors to offer competitive rates to secure the award. The Department of the Navy's approach suggests a commitment to leveraging the market to achieve the best possible outcome for this essential service.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is expected to drive down costs and ensure that the government receives high-quality services at a fair price.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who rely on the continuous operation of Anti-Terrorism Force Protection (ATFP) systems. Services delivered include the sustainment and maintenance of critical security systems, ensuring operational readiness. The geographic impact is likely widespread across various DoD installations requiring ATFP capabilities. Workforce implications include the employment of skilled technicians and support staff by Serco Inc. to perform the sustainment tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if scope of sustainment is not tightly managed.
Reliance on a single contractor for critical security system maintenance could pose risks if performance falters.
Ensuring adequate technical expertise within the government to oversee contractor performance is crucial.

Positive Signals

Awarded through full and open competition, indicating a healthy market and competitive pricing.
Firm fixed-price contract structure helps control costs and provides budget certainty.
Contract duration of one year allows for regular re-evaluation of needs and performance.

Sector Analysis

The security systems services sector, particularly for government and defense applications, is characterized by high technical requirements and stringent security protocols. This contract for ATFP system sustainment fits within the broader market for defense logistics and maintenance, which is a significant segment of the federal contracting landscape. Comparable spending benchmarks in this area are often in the tens to hundreds of millions of dollars annually for large-scale system support, reflecting the complexity and criticality of the assets being maintained.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, Serco Inc. While this contract may not directly benefit small businesses through set-asides, large prime contractors often engage small businesses as subcontractors for specialized services or components, potentially creating indirect opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract is managed by the Department of the Navy, which is responsible for monitoring contractor performance, ensuring compliance with contract terms, and verifying the delivery of required services. Accountability measures are embedded within the contract's performance standards and payment terms. Transparency is facilitated through federal procurement databases where contract awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Maintenance and Sustainment Contracts
Security Systems and Services Procurement
Anti-Terrorism Force Protection Programs
Federal IT and Infrastructure Support Services

Risk Flags

Contractor Performance Risk
Scope Creep Potential
Technological Obsolescence
Security Vulnerability Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.1 million to SERCO INC. GLOBAL SUSTAINMENT OF ATFP SYSTEMS YEAR TWO

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 $61.1 million.

What is the period of performance?

Start: 2022-05-02. End: 2023-05-01.

What is Serco Inc.'s track record with the Department of Defense, particularly in security system sustainment?

Serco Inc. has a significant history of contracting with the U.S. government, including the Department of Defense, across various service areas. Their portfolio often includes logistics, technical support, and facility management. While specific details on their performance for ATFP systems require deeper analysis of past contracts and performance reviews, Serco is a large, established government contractor. Their track record generally involves managing complex, large-scale service contracts. However, like many large contractors, they may have faced scrutiny or performance issues on specific contracts, necessitating careful review of their past performance metrics and any associated corrective actions related to defense contracts.

How does the $61.1 million annual cost compare to similar ATFP system sustainment contracts?

The $61.1 million annual cost for ATFP system sustainment is substantial, reflecting the critical nature and complexity of these security systems. To benchmark effectively, one would compare this figure against contracts for similar services (e.g., maintenance, repair, technical support) for comparable defense systems across different military branches or agencies. Factors such as the number of systems supported, geographic spread of installations, and the specific technologies involved heavily influence cost. Without access to proprietary contract data or detailed breakdowns of services included, a precise comparison is challenging. However, for large-scale, multi-year sustainment of critical defense infrastructure, this figure appears to be within a plausible range, especially considering the firm fixed-price nature which may include contingency.

What are the primary risks associated with this contract and how are they being mitigated?

Key risks include potential performance failures by Serco Inc. that could compromise security, cost overruns if the scope of work is not well-defined or managed, and technological obsolescence of ATFP systems. Mitigation strategies likely involve robust performance monitoring by the Department of the Navy, clear contract terms and Service Level Agreements (SLAs), and potentially phased technology refresh plans. The firm fixed-price structure mitigates financial risk for the government regarding cost overruns. However, ensuring the contractor maintains adequate technical expertise and responsiveness remains a critical oversight function.

What is the expected effectiveness of the ATFP systems under Serco's sustainment?

The expected effectiveness hinges on Serco Inc.'s ability to maintain the ATFP systems at peak operational readiness. This includes timely repairs, preventative maintenance, and integration of necessary upgrades or patches. Effective sustainment ensures that the systems reliably detect and deter threats, protecting personnel and assets. The Department of the Navy's oversight, including performance metrics and inspections, will be crucial in gauging and ensuring this effectiveness. A successful sustainment program directly contributes to the overall security posture and operational capability of the installations where these systems are deployed.

What have been historical spending patterns for ATFP system sustainment within the DoD?

Historical spending on ATFP system sustainment within the DoD has generally been significant and consistent, reflecting the enduring need for robust security measures across global installations. Budgets allocated to such programs often fluctuate based on threat assessments, modernization initiatives, and overall defense spending priorities. Over the past decade, there has been a sustained focus on enhancing force protection capabilities, which translates into consistent investment in the maintenance and upgrade of associated systems. Specific annual figures can vary widely depending on the scope of systems covered and the prevailing geopolitical climate, but it represents a core component of the defense infrastructure budget.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3943020R2245

Pricing Type: FIRM FIXED PRICE (J)

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: $61,094,759

Exercised Options: $61,094,759

Current Obligation: $61,094,759

Actual Outlays: $61,094,759

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $26,165,238

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3943021D2230

IDV Type: IDC

Timeline