State Department's $96.6M contract for visa center operations awarded to Serco Inc. without competition

Contract Overview

Contract Amount: $96,603,571 ($96.6M)

Contractor: Serco Inc

Awarding Agency: Department of State

Start Date: 2012-08-01

End Date: 2014-06-22

Contract Duration: 690 days

Daily Burn Rate: $140.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPERATION OF THE NATIONAL VISA CENTER AND KENTUCKY CONSULAR CENTER

Place of Performance

Location: PORTSMOUTH, ROCKINGHAM County, NEW HAMPSHIRE, 03801

State: New Hampshire Government Spending

Plain-Language Summary

Department of State obligated $96.6 million to SERCO INC for work described as: OPERATION OF THE NATIONAL VISA CENTER AND KENTUCKY CONSULAR CENTER Key points: 1. The contract's value of $96.6 million over approximately two years indicates a significant investment in essential government services. 2. The absence of competition for this large contract raises questions about potential price efficiencies and the exploration of alternative service providers. 3. The firm-fixed-price contract type suggests that Serco Inc. bears the primary financial risk for cost overruns. 4. The contract's duration of 690 days (approximately 23 months) provides a stable operational period for the National Visa Center and Kentucky Consular Center. 5. The 'All Other Support Services' classification (NAICS 561990) is broad, making direct comparisons to highly specialized service contracts challenging. 6. The contract was awarded to Serco Inc., a company with a history of government contracting, suggesting established capabilities but also highlighting the lack of new market entrants.

Value Assessment

Rating: fair

Benchmarking the value of this contract is difficult due to the lack of competitive bidding and the broad service category. While $96.6 million over two years is substantial, without comparative bids, it's hard to definitively assess if this represents optimal value for money. The firm-fixed-price structure shifts risk to the contractor, which can be a positive indicator of cost control, but the absence of competition limits the ability to gauge pricing against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach bypasses the standard procurement process where multiple vendors submit bids. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they typically result in less price discovery and potentially higher costs for the government compared to fully competed contracts. The lack of bidders means the government did not benefit from the competitive pressure that drives down prices.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. Without multiple bids, it's harder to ensure the most cost-effective solution was secured.

Public Impact

Citizens and foreign nationals applying for visas benefit from the operational continuity and efficiency of the National Visa Center and Kentucky Consular Center. The contract supports the critical function of processing visa applications, facilitating international travel and immigration. The services delivered are essential for the Department of State's diplomatic and consular operations. The geographic impact is national, supporting the centralized processing of visa applications, with implications for individuals applying from all over the world.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
The broad service category makes it difficult to assess performance benchmarks and value for money.
Sole-source awards can reduce opportunities for new or smaller businesses to enter the federal contracting space.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, Serco Inc.
Contract provides stable funding for essential visa processing operations.
Award to an established contractor suggests a potentially lower risk of performance issues.

Sector Analysis

The federal IT and support services sector is vast, with significant spending on operational support for various government agencies. Contracts like this, supporting critical functions such as visa processing, fall under broader administrative and support services categories. The market for such services is competitive, but specific, large-scale operational contracts can sometimes be awarded without full and open competition if unique circumstances or contractor capabilities are cited. Benchmarking this contract's value is challenging without comparable sole-source or limited-competition awards in the same niche.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a single, presumably larger, entity like Serco Inc. means that opportunities for small businesses to participate in this specific contract are likely limited. This could represent a missed opportunity to leverage the agility and specialized services that small businesses often provide within the federal contracting ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. As a sole-source award, there might be heightened scrutiny from oversight bodies like the Government Accountability Office (GAO) or the Inspector General's office to ensure the justification for non-competition was sound and that the contractor is meeting performance requirements. Transparency is limited due to the lack of a competitive bidding process, making public assessment of the award's fairness more difficult.

Related Government Programs

Department of State Consular Services
Visa Application Processing Services
Federal Support Services Contracts
Government Operations Support

Risk Flags

Sole-source award lacks competitive justification.
Broad NAICS code hinders specific value assessment.
Potential for non-competitive pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $96.6 million to SERCO INC. OPERATION OF THE NATIONAL VISA CENTER AND KENTUCKY CONSULAR CENTER

Who is the contractor on this award?

The obligated recipient is SERCO INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $96.6 million.

What is the period of performance?

Start: 2012-08-01. End: 2014-06-22.

What is Serco Inc.'s track record with the Department of State and other federal agencies?

Serco Inc. has a significant history of contracting with various U.S. federal agencies, including the Department of State. Their portfolio often includes providing a wide range of support services, from IT and call centers to operational management for government facilities and programs. For the Department of State specifically, Serco has been involved in contracts related to visa processing, passport services, and other administrative functions. While their extensive experience suggests a capacity to handle large and complex contracts, it's also important to review past performance metrics, any documented issues or disputes, and overall client satisfaction across their federal engagements to fully assess their reliability and effectiveness for this specific visa center operation.

How does the $96.6 million cost compare to similar visa processing contracts, especially those that were competed?

Direct comparison of the $96.6 million cost is challenging because this contract was awarded sole-source, lacking the price discovery inherent in a competitive bidding process. Typically, competed contracts for similar large-scale operational support services might yield a range of pricing based on multiple vendor proposals. Without that competitive benchmark, it's difficult to ascertain if Serco's pricing is optimal. If comparable contracts for visa processing or similar government support functions were competed and awarded at a lower per-unit cost or overall value, it would suggest this sole-source award may not represent the best value for taxpayers. Further analysis would require identifying specific, comparable contracts and their awarded values.

What are the primary risks associated with a sole-source award for critical government operations like visa processing?

The primary risks associated with a sole-source award for critical operations like visa processing include: 1) Potential for inflated pricing: Without competition, the contractor may not feel pressured to offer the lowest possible price. 2) Reduced innovation: A lack of competitive pressure can disincentivize the contractor from seeking innovative or more efficient methods. 3) Limited accountability: While performance is still monitored, the absence of a competitive market can sometimes lessen the urgency for a contractor to exceed basic performance standards. 4) Contractor lock-in: The agency may become dependent on the sole provider, making future transitions more difficult and costly. For visa processing, operational continuity is paramount, but ensuring efficiency and cost-effectiveness through competition is a key principle of sound federal procurement.

What is the historical spending pattern for the operation of the National Visa Center and Kentucky Consular Center?

Historical spending data for the operation of the National Visa Center (NVC) and Kentucky Consular Center (KCC) would provide crucial context for evaluating the current $96.6 million contract. Analyzing past contract awards for these specific functions, including their values, durations, and whether they were competed or sole-source, can reveal trends in cost escalation, contractor performance, and the overall investment in these operations. For instance, if previous contracts for similar services were significantly lower in value or were awarded through competitive processes that resulted in cost savings, it would raise questions about the justification and value of this current sole-source award. Understanding the historical spending trajectory is essential for assessing whether the current investment is reasonable and aligned with past expenditures and market conditions.

How does the NAICS code 561990 ('All Other Support Services') impact the assessment of this contract's value and performance?

The classification under NAICS code 561990, 'All Other Support Services,' is very broad and encompasses a wide array of non-specific support activities. This broadness presents challenges for a detailed value-for-money assessment and performance benchmarking. It means the contract likely includes a diverse set of tasks that don't fit into more specialized categories. Consequently, finding directly comparable contracts or precise market rates for 'all other support services' is difficult. This lack of specificity can obscure the true nature of the services being procured and make it harder for analysts and oversight bodies to evaluate whether the contractor is delivering services efficiently and at a competitive price relative to specialized service providers.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Serco Group PLC (UEI: 298452707)

Address: 1818 LIBRARY ST STE 1000, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $135,130,360

Exercised Options: $135,130,360

Current Obligation: $96,603,571

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline