Army awards $63.5M for staff augmentation services, with Serco Inc. as prime contractor

Contract Overview

Contract Amount: $63,547,578 ($63.5M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-05

End Date: 2024-11-12

Contract Duration: 2,260 days

Daily Burn Rate: $28.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: Other

Official Description: STAFF SERVICES AUGMENTATION (SSA)FOR ARMY SUSTAINMENT COMMAND

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $63.5 million to SERCO INC for work described as: STAFF SERVICES AUGMENTATION (SSA)FOR ARMY SUSTAINMENT COMMAND Key points: 1. Contract provides essential staff augmentation to support Army sustainment command operations. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Duration of over 6 years indicates a long-term need for these specialized services. 4. The contract type is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The services procured fall under engineering services, highlighting a need for technical and professional expertise. 6. The contract value of $63.5 million over its lifecycle suggests significant investment in operational support.

Value Assessment

Rating: good

The contract value of $63.5 million over approximately six years for staff augmentation services appears reasonable given the scope and duration. Benchmarking against similar contracts for specialized staff support within the Department of Defense indicates that pricing is likely competitive, especially considering the full and open competition. The delivery order structure suggests that pricing was negotiated under an existing IDIQ, which typically incorporates competitive pricing mechanisms. Without specific per-unit labor rates, a precise value-for-money assessment is challenging, but the overall award amount aligns with the sustained need for experienced personnel in critical sustainment functions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific delivery order. While two bidders indicate some level of market interest, a higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government. The agency's decision to use full and open competition is a positive indicator for achieving fair market value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The presence of multiple bidders, even if only two, suggests that the government is likely receiving a fair price for the services rendered, preventing potential overcharges that could occur with less competitive solicitations.

Public Impact

The primary beneficiaries are the U.S. Army Sustainment Command, which receives critical support to maintain operational readiness and efficiency. Services delivered include specialized staff augmentation, likely encompassing administrative, technical, and professional support roles. The geographic impact is centered around the Army Sustainment Command's operational areas, primarily within the United States. Workforce implications include the creation of specialized support jobs, potentially filled by experienced professionals and former military personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency or reduced urgency if not actively managed.
Reliance on external staff augmentation may indicate internal capacity challenges within the Army Sustainment Command.
Potential for knowledge transfer gaps if key personnel depart without adequate succession planning.

Positive Signals

Full and open competition suggests a commitment to obtaining best value and competitive pricing.
The contract supports critical sustainment operations, ensuring the Army's logistical backbone remains functional.
Serco Inc. has a track record in government contracting, implying experience in managing such requirements.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically engineering services. This sector is characterized by a high demand for specialized expertise to support complex government operations. The market size for such services is substantial, with numerous firms competing for federal contracts. The Army Sustainment Command's need for staff augmentation highlights the ongoing reliance of large government entities on external support to manage specialized functions and maintain operational tempo, a common trend across various federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Serco Inc., is a large business. This suggests that small businesses are unlikely to be directly involved as prime contractors on this specific award. However, there may be opportunities for small businesses to participate as subcontractors to Serco Inc., depending on the subcontracting plan negotiated for this delivery order. The absence of a direct set-aside means the primary focus was on full and open competition.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers responsible for the Sustainment Command. The contract's performance would be monitored through regular reporting, performance reviews, and adherence to delivery schedules and quality standards. Transparency is facilitated through contract databases like FPDS. While no specific Inspector General (IG) jurisdiction is mentioned, the DoD IG would have oversight authority over potential fraud, waste, or abuse related to this contract.

Related Government Programs

Army Logistics Modernization
Defense-wide Logistics Support Services
Professional Services Contracts
Staff Augmentation Services
Sustainment Operations Support

Risk Flags

Potential for over-reliance on contractor personnel
Risk of knowledge transfer gaps
Contract duration may exceed actual need if not actively managed

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.5 million to SERCO INC. STAFF SERVICES AUGMENTATION (SSA)FOR ARMY SUSTAINMENT COMMAND

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 Army).

What is the total obligated amount?

The obligated amount is $63.5 million.

What is the period of performance?

Start: 2018-09-05. End: 2024-11-12.

What is Serco Inc.'s track record with the Department of Defense, particularly in providing staff augmentation services?

Serco Inc. has a significant history of contracting with the Department of Defense (DoD) across various service areas, including IT, professional services, and operational support. Their experience with staff augmentation is substantial, often involving providing skilled personnel to support complex government functions. Analyzing their past performance on similar DoD contracts would reveal their ability to meet performance requirements, manage personnel effectively, and adhere to budgetary constraints. Past performance reviews and contract award histories within the DoD provide insights into Serco's reliability and capability in delivering these types of services, which is a key factor in assessing the risk associated with this contract.

How does the $63.5 million contract value compare to similar staff augmentation contracts awarded by the Army or other DoD branches?

The $63.5 million contract value over approximately six years for staff augmentation services for the Army Sustainment Command appears to be within a reasonable range when compared to similar contracts. The average annual value is roughly $10.5 million. Contracts for specialized staff augmentation within the DoD can vary widely based on the number of personnel, skill sets required, and duration. Given the critical nature of sustainment operations, which require experienced personnel, this value suggests a substantial requirement. Benchmarking against other large-scale logistics and operational support contracts within the DoD would provide a more precise comparison, but the overall figure indicates a significant, long-term need for these services.

What are the primary risks associated with relying on external staff augmentation for critical sustainment functions?

Key risks associated with relying on external staff augmentation for critical sustainment functions include potential loss of institutional knowledge if augmented staff depart without proper knowledge transfer, over-reliance on contractors that could hinder internal capability development, and challenges in maintaining consistent quality and security if contractor personnel are not adequately vetted or trained. There's also a risk of increased costs over time if contract terms are not managed effectively or if scope creep occurs. Ensuring robust oversight, clear performance metrics, and strong knowledge management processes are crucial to mitigate these risks and ensure the sustained effectiveness of sustainment operations.

What is the historical spending pattern for staff augmentation services within the Army Sustainment Command or similar commands?

Historical spending patterns for staff augmentation within the Army Sustainment Command and similar commands typically show a consistent need for external support to supplement organic capabilities, especially during periods of high operational tempo or force structure changes. Spending often fluctuates based on specific sustainment initiatives, modernization efforts, or readiness requirements. Analyzing past contract awards for staff augmentation, professional services, and technical support within these commands would reveal trends in contract values, durations, and the types of services most frequently procured. This historical data is essential for understanding the long-term demand and budgeting for such services.

How does the 'Delivery Order' contract type impact price negotiation and flexibility compared to a standalone contract?

A 'Delivery Order' is typically issued under an existing Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. This means the underlying IDIQ contract has already established terms, conditions, and often pre-negotiated pricing structures or ceiling rates. The price for a specific delivery order is then negotiated based on these established terms, often for a specific quantity or task. This can lead to more efficient procurement for recurring needs. However, it might offer less flexibility in negotiating entirely new terms or prices compared to a standalone, newly competed contract. The government benefits from pre-vetted contractors and established processes, while contractors have a degree of guaranteed work, influencing their pricing strategies.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 12930 WORLDGATE DR STE 600, HERNDON, VA, 20170

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

Financial Breakdown

Contract Ceiling: $63,547,578

Exercised Options: $63,547,578

Current Obligation: $63,547,578

Actual Outlays: $1,425,002

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $4,622,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU132

IDV Type: IDC

Timeline