DoD's $20.5M hardware installation contract for USS Makin Island's C4ISR network awarded to Serco Inc

Contract Overview

Contract Amount: $20,494,342 ($20.5M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2023-05-26

End Date: 2025-08-01

Contract Duration: 798 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: HARDWARE INSTALLATION OF C4ISR NETWORK RELATED SYSTEMS ONBOARD USS MAKIN ISLAND (LHD 8), SAN DIEGO CA

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92152

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to SERCO INC for work described as: HARDWARE INSTALLATION OF C4ISR NETWORK RELATED SYSTEMS ONBOARD USS MAKIN ISLAND (LHD 8), SAN DIEGO CA Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control but also carries inherent risk. 3. The duration of 798 days indicates a significant, long-term project. 4. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The prime contractor, Serco Inc., has a history of performing similar defense-related services. 6. The work is geographically concentrated in San Diego, California, a major naval hub.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the broader IDIQ contract's terms and the specific scope of work. The CPIF contract type means the final cost is subject to performance incentives, making direct price comparisons difficult. However, the base contract value of $20.5 million for hardware installation and C4ISR network systems on a major naval vessel appears within a reasonable range for such complex military projects, though detailed cost breakdowns and comparisons to similar installations would be needed for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought proposals from all responsible sources. The presence of 4 bidders (as indicated by 'no': 4) suggests a degree of competition, which is generally favorable for price discovery. However, the specific details of the bidding process, including the number of proposals received and the evaluation criteria, are not provided, limiting a full assessment of the competition's effectiveness.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, potentially reducing overall program costs.

Public Impact

The primary beneficiaries are the U.S. Navy and its personnel, who will operate the enhanced C4ISR systems. The services delivered include the installation of critical hardware for command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) networks. The geographic impact is focused on San Diego, California, a key location for naval operations and maintenance. This contract supports the defense industrial workforce, particularly those skilled in C4ISR systems integration and hardware installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee (CPIF) contracts can lead to cost overruns if not managed tightly, as the government bears the cost plus an incentive fee.
The complexity of C4ISR systems integration presents inherent technical risks that could impact performance and schedule.
Reliance on a single delivery order under a potentially larger IDIQ structure might limit flexibility if requirements evolve significantly.
The concentration of work in a single geographic location (San Diego) could pose logistical challenges or risks if unforeseen local issues arise.

Positive Signals

Awarded through full and open competition, which typically drives better value and wider industry participation.
The contractor, Serco Inc., is an established entity with experience in defense contracting, suggesting a degree of reliability.
The delivery order is part of a structured procurement process, likely within an existing framework designed for efficiency.
The specific C4ISR systems are crucial for naval operational effectiveness, indicating a high-priority investment.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically supporting defense-related C4ISR systems. The market for defense C4ISR integration is substantial, driven by continuous technological advancements and the need for modernizing military platforms. Comparable spending benchmarks would involve analyzing other contracts for similar system installations on naval vessels or other defense platforms, considering factors like vessel size, system complexity, and the specific technologies involved.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. This suggests that the prime contract was not specifically targeted towards small businesses, and there is no explicit indication of subcontracting goals for small businesses within the provided data. Further analysis would be needed to determine if subcontracting opportunities exist and how they might impact the small business ecosystem.

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 Incentive Fee (CPIF) contract, rigorous financial oversight is crucial to monitor costs and ensure incentive targets are met appropriately. Transparency is typically managed through contract reporting mechanisms and potentially through the Government Accountability Office (GAO) if protests or audits occur. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Naval C4ISR Modernization Programs
Shipboard Systems Integration Contracts
Defense Hardware Procurement
Engineering Services for Military Platforms
USS Makin Island (LHD 8) Specific Upgrades

Risk Flags

CPIF contract type requires careful cost monitoring.
Complexity of C4ISR integration poses technical risks.
Potential for cost overruns inherent in CPIF structure.
Dependence on specific delivery order scope within a larger framework.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to SERCO INC. HARDWARE INSTALLATION OF C4ISR NETWORK RELATED SYSTEMS ONBOARD USS MAKIN ISLAND (LHD 8), SAN DIEGO CA

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 $20.5 million.

What is the period of performance?

Start: 2023-05-26. End: 2025-08-01.

What is Serco Inc.'s track record with similar C4ISR installation contracts for the U.S. Navy?

Serco Inc. has a significant history of performing various services for the U.S. military, including IT, communications, and systems integration. While specific details on C4ISR hardware installation contracts of this exact scope and value for the Navy are not immediately available in this dataset, the company's broader experience in defense contracting suggests a foundational capability. A deeper dive into Serco's past performance evaluations, contract history databases (like FPDS or SAM.gov), and any publicly available project reports would be necessary to fully assess their specific track record and suitability for this particular C4ISR installation task on the USS Makin Island.

How does the $20.5 million cost compare to similar C4ISR installation projects on naval vessels?

Directly comparing the $20.5 million cost is challenging without detailed scope and system specifications for both this contract and comparable projects. However, the value appears within a plausible range for installing complex C4ISR hardware on a large naval platform like an LHD (Landing Helicopter Dock). Factors influencing cost include the specific C4ISR suite being installed (e.g., radar, communication systems, data links), the extent of integration required with existing ship systems, the labor rates in San Diego, and the specific performance incentives tied to the CPIF structure. Benchmarking would require access to data on similar installations, considering vessel class, age, and the technological sophistication of the C4ISR upgrades.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for C4ISR hardware installation?

The primary risks with a CPIF contract for C4ISR hardware installation revolve around cost control and defining achievable performance incentives. While CPIF aims to incentivize efficiency by sharing cost savings or overruns between the contractor and the government, it inherently means the government bears the base cost plus potential incentives. Risks include: 1) Difficulty in accurately estimating initial costs, leading to potential overruns that are shared. 2) The complexity of C4ISR systems can make it hard to define objective, measurable performance metrics for incentives, potentially leading to disputes or ineffective motivation. 3) The government may end up paying more than anticipated if the contractor achieves high performance targets, even if costs are managed reasonably. Robust oversight is critical to mitigate these risks.

What is the expected impact of these C4ISR system upgrades on the USS Makin Island's operational effectiveness?

The installation of upgraded C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) hardware is expected to significantly enhance the USS Makin Island's operational effectiveness. Improved C4ISR capabilities allow for better situational awareness, more secure and reliable communication, enhanced data processing and dissemination, and more precise targeting and intelligence gathering. This translates to improved coordination with other naval units, joint forces, and potentially allied nations. Ultimately, these upgrades are crucial for maintaining the vessel's ability to perform its mission effectively in complex and evolving threat environments, supporting its role as a key platform in naval operations.

How has federal spending on C4ISR systems for naval platforms trended in recent years?

Federal spending on C4ISR systems for naval platforms has generally trended upwards over recent years, driven by a strategic focus on maintaining technological superiority and modernizing aging fleets. The increasing complexity of global security challenges and the rapid pace of technological advancement necessitate continuous upgrades to ensure platforms like the USS Makin Island possess cutting-edge communication, intelligence, and command capabilities. This includes investments in areas like network-centric warfare, cybersecurity, artificial intelligence integration, and advanced sensor technologies. Budgetary allocations within the Department of Defense, particularly for the Navy's shipbuilding and conversion, and research, development, test, and evaluation (RDT&E) accounts, reflect this ongoing commitment to enhancing C4ISR capabilities across naval assets.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $20,494,342

Exercised Options: $20,494,342

Current Obligation: $20,494,342

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $5,756,155

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003919D0024

IDV Type: IDC

Timeline