DoD's $70M Physical Security System contract awarded to Serco Inc. for enterprise architecture services
Contract Overview
Contract Amount: $69,938,648 ($69.9M)
Contractor: Serco Inc
Awarding Agency: Department of Defense
Start Date: 2023-08-28
End Date: 2028-08-27
Contract Duration: 1,826 days
Daily Burn Rate: $38.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PHYSICAL SECURITY SYSTEM-ENTERPRISE ARCHITECTURE (PS2-EA)
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92152
Plain-Language Summary
Department of Defense obligated $69.9 million to SERCO INC for work described as: PHYSICAL SECURITY SYSTEM-ENTERPRISE ARCHITECTURE (PS2-EA) Key points: 1. The contract value of approximately $70 million over five years suggests a significant investment in the Navy's physical security infrastructure. 2. The 'Delivery Order' award type indicates this is part of a larger, pre-existing contract vehicle, potentially limiting immediate competition. 3. The 'Cost Plus Fixed Fee' pricing structure carries inherent risk of cost overruns if not closely managed. 4. The 'Engineering Services' NAICS code points to a focus on technical design and planning rather than direct physical security implementation. 5. The contract's duration of 1826 days (5 years) allows for long-term planning and development of the enterprise architecture. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific details on the scope of 'enterprise architecture' for physical security systems. However, a $70 million investment over five years for system design and planning indicates a substantial commitment. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility, requires diligent oversight to ensure costs remain reasonable and do not escalate beyond initial expectations. Comparing this to similar large-scale IT or engineering services contracts for defense agencies would provide better context on value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this method generally fosters competitive pricing and encourages a wider range of solutions. The 'Delivery Order' nature implies it was awarded against an existing contract, which might have had its own competitive history.
Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it aims to secure the best value through a broad range of offers, potentially driving down costs compared to less competitive methods.
Public Impact
The Department of the Navy benefits from enhanced physical security planning and design through the development of an enterprise architecture. This contract supports the modernization and integration of physical security systems across Navy installations. The primary service delivered is engineering and architectural design for complex security systems. The geographic impact is likely nationwide, affecting various Navy facilities requiring robust physical security. Workforce implications may include specialized engineering and cybersecurity roles within Serco Inc. and potentially within the Navy's acquisition and oversight teams.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not meticulously managed and monitored.
- The 'Delivery Order' award type might indicate a pre-competed contract vehicle, potentially limiting the scope of competition for this specific order.
- Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance trajectory.
- The broad nature of 'enterprise architecture' can sometimes lead to scope creep if not clearly defined and managed.
Positive Signals
- Awarded under 'Full and Open Competition,' suggesting a robust bidding process that should yield competitive pricing.
- The contract duration of five years allows for sustained focus and development of a comprehensive security architecture.
- The contractor, Serco Inc., likely possesses relevant experience in large-scale government contracting and engineering services.
- The focus on enterprise architecture implies a strategic approach to long-term security system planning and integration.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense and government contracting industry. The market for specialized engineering and architectural services supporting national security infrastructure is substantial, driven by the need for advanced technological solutions and robust system integration. Serco Inc. operates in a competitive landscape with numerous firms offering similar capabilities. This contract represents a significant investment in the foundational planning and design phase for the Navy's physical security systems, aiming for a cohesive and effective enterprise-wide approach.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary competition was open to all eligible large and small businesses. Consequently, there are no direct subcontracting requirements for small businesses mandated by a set-aside provision within this specific award. The impact on the small business ecosystem is therefore indirect, relying on Serco Inc.'s potential voluntary inclusion of small businesses in its supply chain or through other contracting vehicles.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to monitor expenditures against the fixed fee and ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the Inspector General (IG) if performance or cost issues arise. The specific oversight mechanisms would be detailed within the contract's terms and conditions.
Related Government Programs
- Department of Defense Physical Security Systems
- Navy IT and Infrastructure Modernization Programs
- Enterprise Architecture Development Contracts
- Engineering Services for Federal Agencies
- Cost Plus Fixed Fee Contracts
Risk Flags
- Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to mitigate cost overrun risks.
- Delivery Order award type may limit the scope of competition compared to a standalone contract.
- Long contract duration (5 years) increases the risk of evolving requirements and potential technological obsolescence.
- Lack of specific performance metrics in the provided data hinders real-time performance assessment.
Tags
defense, department-of-the-navy, engineering-services, physical-security, enterprise-architecture, cost-plus-fixed-fee, full-and-open-competition, delivery-order, serco-inc, california, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.9 million to SERCO INC. PHYSICAL SECURITY SYSTEM-ENTERPRISE ARCHITECTURE (PS2-EA)
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 $69.9 million.
What is the period of performance?
Start: 2023-08-28. End: 2028-08-27.
What is the historical spending pattern for physical security systems enterprise architecture within the Department of the Navy?
Analyzing historical spending on physical security systems enterprise architecture within the Department of the Navy requires access to detailed budget and contract databases. Generally, such investments fluctuate based on modernization needs, threat assessments, and technological advancements. Large-scale enterprise architecture projects, like the PS2-EA, are typically multi-year endeavors, often awarded through competitive processes. Spending in this area would likely show periods of increased investment during major system overhauls or the implementation of new security mandates, followed by periods of sustainment and incremental upgrades. Without specific historical data for this particular program or similar EA initiatives, it's difficult to provide precise figures, but it represents a strategic allocation of resources towards long-term security infrastructure planning.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar engineering services in the defense sector?
The Cost Plus Fixed Fee (CPFF) structure is common for complex, research-intensive, or developmental projects where the scope may evolve, and precise cost estimation is challenging upfront. In the defense sector, it allows contractors to cover all allowable costs while earning a predetermined fixed fee, incentivizing them to control costs to maximize their profit margin (fee percentage of costs). Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but carries higher risk for the government regarding cost certainty. Cost-Reimbursement contracts (like Cost Plus Incentive Fee or Cost Plus Award Fee) offer different risk-reward profiles, often with more direct performance incentives. For mature, well-defined engineering services, FFP might be preferred for cost predictability, but for developing an enterprise architecture with inherent uncertainties, CPFF can be a suitable, albeit closely monitored, choice.
What are the key performance indicators (KPIs) typically used to evaluate the success of an enterprise architecture contract for physical security systems?
Key Performance Indicators (KPIs) for an enterprise architecture contract in physical security typically focus on the successful development, integration, and adoption of the architecture itself. These might include: 1. **Completeness and Accuracy of Architecture Documentation:** Measured by adherence to standards, clarity, and comprehensiveness of blueprints, models, and specifications. 2. **Interoperability and Integration:** Assessed by the degree to which the proposed architecture enables seamless data exchange and functional integration between disparate physical security systems (e.g., access control, surveillance, intrusion detection). 3. **Scalability and Flexibility:** Evaluated based on the architecture's capacity to accommodate future growth, technological changes, and evolving security requirements without major redesign. 4. **Compliance and Standardization:** Measured by adherence to relevant DoD, Navy, and industry security standards and policies. 5. **Stakeholder Adoption and Satisfaction:** Gauged through feedback from key Navy personnel and system operators on the usability and effectiveness of the architecture's guidance. 6. **Cost-Effectiveness Projections:** While not directly measuring cost savings yet, KPIs might assess the architecture's potential to reduce long-term operational and maintenance costs.
What is Serco Inc.'s track record with large Department of Defense (DoD) contracts, particularly in engineering or IT services?
Serco Inc. has a significant and extensive track record of performing large-scale contracts for the Department of Defense and other federal agencies. They are known for providing a wide range of services, including IT, systems engineering, technical support, and operational support across various military branches. Their portfolio often includes complex projects requiring deep technical expertise and program management capabilities. While specific details on their performance for every contract require in-depth review, Serco is a well-established government contractor that regularly competes for and wins substantial awards. Their experience suggests they possess the organizational capacity and technical proficiency to manage a contract of this magnitude, focused on developing enterprise architecture for critical systems like physical security.
What are the potential risks associated with a five-year 'Delivery Order' contract for enterprise architecture development?
A five-year 'Delivery Order' contract for enterprise architecture development presents several potential risks. Firstly, the 'Delivery Order' nature implies it was awarded against a pre-existing contract vehicle, which might have had its own competitive history and terms. If that vehicle was not recently competed or had limited participants, the actual competition for this specific order might be less robust than 'Full and Open Competition' implies for the initial vehicle. Secondly, a five-year duration for an evolving field like enterprise architecture carries the risk of technological obsolescence or changing requirements. The architecture developed early in the contract might need significant adaptation or revision by the end, potentially leading to scope creep or increased costs if not managed proactively. Thirdly, the CPFF structure, as mentioned, carries inherent cost overrun risks if oversight is insufficient. Finally, ensuring consistent quality and alignment with the Navy's strategic goals over such a long period requires sustained program management focus and effective communication.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N6600123R3503
Offers Received: 1
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: $201,690,990
Exercised Options: $201,690,990
Current Obligation: $69,938,648
Subaward Activity
Number of Subawards: 45
Total Subaward Amount: $5,453,638
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
Start Date: 2023-08-28
Current End Date: 2028-08-27
Potential End Date: 2028-08-27 00:00:00
Last Modified: 2026-02-12
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