DoD's $38.3M Naval Surface Warfare Center contract for fleet modernization services awarded to Serco-IPS Corporation

Contract Overview

Contract Amount: $38,300,047 ($38.3M)

Contractor: Serco-Ips Corporation

Awarding Agency: Department of Defense

Start Date: 2017-08-18

End Date: 2024-08-17

Contract Duration: 2,556 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE INSTALLATION DESIGN SERVICES ALLOCATION (DSA), SYSTEM HARDWARE DESIGN, INSTALLATION SUPPORT, AND MATERIAL KITTING SERVICES IN SUPPORT OF FLEET MODERNIZATION PROGRAM (FMP) PLANS OF THE LAND ATTACK DEPARTMENT AND SELF DEFENSE TEST SHIP AT THE NAVAL SURFACE WARFARE CENTER PORT HUENEME DIVISION.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to SERCO-IPS CORPORATION for work described as: IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE INSTALLATION DESIGN SERVICES ALLOCATION (DSA), SYSTEM HARDWARE DESIGN, INSTALLATION SUPPORT, AND MATERIAL KITTING SERVICES IN SUPPORT OF FLEET MODERNIZATION PROGRAM (FMP) PLANS OF THE LAND ATTACK DEPARTMENT AND SELF DEFENSE TEST SHIP AT T… Key points: 1. Contract focuses on critical installation design, hardware, and material kitting for fleet modernization. 2. Services support the Land Attack Department and Self Defense Test Ship at Port Hueneme. 3. The contract duration spans over seven years, indicating a long-term need for these services. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight of costs. 6. This contract is part of a broader effort to modernize naval capabilities.

Value Assessment

Rating: good

The contract's total value of $38.3 million over seven years suggests a significant investment in fleet modernization. Benchmarking this against similar engineering services contracts for naval modernization is challenging without more specific data on the scope of services. However, the duration and breadth of support indicate a substantial requirement. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex projects, necessitates diligent cost tracking to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive environment is generally expected to drive better pricing and service quality. The presence of two bidders, as indicated by the 'no' field, suggests a reasonable level of competition, though more bidders would typically indicate a stronger competitive dynamic.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it promotes a market-driven price discovery process, potentially leading to more cost-effective outcomes compared to sole-source or limited competition awards.

Public Impact

Naval Surface Warfare Center Port Hueneme Division benefits from modernized fleet capabilities. The contract supports the Land Attack Department and Self Defense Test Ship. Modernization efforts enhance the operational readiness and effectiveness of naval assets. This contract contributes to the technological advancement and sustainment of the U.S. Navy's fleet. The services provided are crucial for maintaining a technological edge in naval warfare.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed tightly.
Long contract duration requires sustained oversight to ensure performance remains high.
Dependence on a single contractor for critical modernization services poses a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contract supports a critical national defense mission (fleet modernization).
The contractor, Serco-IPS Corporation, likely has experience in defense contracting.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related modernization efforts. The market for defense engineering services is substantial, driven by continuous technological evolution and the need to maintain a modern military. Comparable spending benchmarks would involve analyzing other large-scale naval modernization programs and the engineering support contracts associated with them. The $38.3 million value positions this as a significant, but not unprecedented, contract within the defense engineering landscape.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Serco-IPS Corporation, may engage small businesses as subcontractors for specialized services, which would contribute to the small business ecosystem. Further analysis would be needed to determine the extent of any small business subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Surface Warfare Center. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate. Transparency is typically managed through contract reporting mechanisms and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Fleet Modernization Programs
Naval Surface Warfare Center Contracts
Defense Engineering Services
Shipbuilding and Repair Contracts
Military Hardware Procurement

Risk Flags

Potential for cost overruns due to CPFF structure.
Long contract duration requires sustained oversight.
Limited competition (2 bidders) may impact price optimization.
Dependence on contractor for critical modernization services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to SERCO-IPS CORPORATION. IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE INSTALLATION DESIGN SERVICES ALLOCATION (DSA), SYSTEM HARDWARE DESIGN, INSTALLATION SUPPORT, AND MATERIAL KITTING SERVICES IN SUPPORT OF FLEET MODERNIZATION PROGRAM (FMP) PLANS OF THE LAND ATTACK DEPARTMENT AND SELF DEFENSE TEST SHIP AT THE NAVAL SURFACE WARFARE CENTER PORT HUENEME DIVISION.

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 $38.3 million.

What is the period of performance?

Start: 2017-08-18. End: 2024-08-17.

What is Serco-IPS Corporation's track record with the Department of Defense, particularly in similar fleet modernization projects?

Serco-IPS Corporation has a history of performing various services for the Department of Defense. While specific details on their involvement in fleet modernization projects require deeper database searches, their engagement in this $38.3 million contract suggests a level of established capability and trust. Analyzing past performance reviews, contract awards, and any reported issues on previous DoD contracts would provide a more comprehensive understanding of their track record. Their ability to secure and execute a multi-year, high-value contract like this indicates a capacity to handle complex defense requirements, but a detailed review of their past performance metrics is essential for a complete assessment.

How does the $38.3 million total contract value compare to similar fleet modernization support contracts awarded by the Navy?

The $38.3 million total contract value for installation design, system hardware design, installation support, and material kitting services is a significant sum, reflecting the complexity and duration of the support required for fleet modernization. To benchmark this value, one would compare it against other contracts for similar engineering and logistical support services for naval vessels, particularly those focused on modernization or upgrade programs. Factors such as the number of ships supported, the scope of modernization (e.g., electronic systems, weapons platforms, hull upgrades), and the contract duration are critical for a fair comparison. Without access to a comprehensive database of comparable contracts, it's difficult to definitively state if this represents high, low, or average spending, but it signifies a substantial commitment to the program.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for a long-term project like fleet modernization?

The primary risks associated with a CPFF contract for a long-term project like fleet modernization revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' element means the government bears the risk of cost overruns. If the contractor's actual costs exceed initial estimates, the government pays these higher costs, plus the agreed-upon fixed fee. This can lead to the total contract value increasing beyond initial projections. For the government, effective oversight is paramount to ensure costs are reasonable and allocable. For the contractor, the risk is that their actual costs might exceed what they anticipated, reducing their overall profit margin if they cannot manage expenses efficiently. This structure requires robust government oversight to prevent inefficiencies from driving up costs.

How effective are the current oversight mechanisms in place for this contract to ensure performance and prevent cost overruns?

Oversight for this contract is managed by the Naval Surface Warfare Center Port Hueneme Division, a key entity within the Department of the Navy. As a CPFF contract, oversight would typically involve detailed review of incurred costs, performance metrics, and adherence to technical specifications. The effectiveness hinges on the resources and diligence applied by the contracting officer's representatives (CORs) and the program management team. Regular progress reports, site inspections, and audits are standard mechanisms. The long duration (over 7 years) necessitates sustained oversight. Without specific details on the oversight plan or performance reviews conducted to date, it's challenging to definitively assess effectiveness, but the structure implies standard DoD oversight protocols are in place.

What is the historical spending trend for fleet modernization support services at the Naval Surface Warfare Center Port Hueneme Division?

Analyzing historical spending trends for fleet modernization support services at the Naval Surface Warfare Center Port Hueneme Division would require access to historical contract databases and budget allocations. This specific contract, valued at $38.3 million over seven years, represents a significant portion of spending in this category during its performance period. To understand trends, one would look at the total annual or multi-year spending on similar engineering, installation, and kitting services for modernization efforts over the past decade or more. This would reveal whether spending in this area is increasing, decreasing, or remaining stable, and how this particular contract fits within that pattern. Such analysis helps in forecasting future needs and budgeting.

What are the implications of awarding this contract under 'full and open competition' with only two bidders for price discovery?

Awarding this contract under 'full and open competition' with only two bidders suggests a moderately competitive environment. While 'full and open' implies the solicitation was broadly advertised, the limited number of actual bidders (two) can impact price discovery. Ideally, more bidders would lead to greater price pressure and potentially a lower final award price. With only two bidders, there's a risk that the competition might not be as robust as possible, potentially allowing the winning bidder to secure a less aggressive price than if there were, for example, five or more competitors. However, 'full and open' still provides a better chance for competitive pricing than limited or sole-source procurements. The specific pricing structure (CPFF) also influences how competition affects the final cost.

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: N0002417R3057

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, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,398,109

Exercised Options: $39,936,230

Current Obligation: $38,300,047

Actual Outlays: $1,195,284

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $6,577,015

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