Transportation contract for business support services awarded to SERCO MANAGEMENT SERVICES, INC. for over $23 million

Contract Overview

Contract Amount: $23,238,169 ($23.2M)

Contractor: Serco Management Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2010-02-01

End Date: 2015-06-30

Contract Duration: 1,975 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SERCO AREA 7

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $23.2 million to SERCO MANAGEMENT SERVICES, INC. for work described as: SERCO AREA 7 Key points: 1. Contract value of $23.2M over 5 years suggests a significant investment in business support services. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. The contract's duration of nearly 2000 days points to a long-term need for these services. 4. Fixed-price contract type may offer cost certainty but could limit flexibility for evolving needs. 5. The North American Industry Classification System (NAICS) code 561499 covers a broad range of 'All Other Business Support Services'. 6. The contract was awarded by the Federal Aviation Administration, suggesting a focus on aviation-related support. 7. The geographic location of the award (Virginia) may indicate a concentration of FAA operations or personnel in that region.

Value Assessment

Rating: fair

The contract value of $23.2 million over approximately five years averages to about $4.6 million annually. Without specific details on the services rendered, it's challenging to benchmark against similar contracts. However, the fixed-price nature suggests an attempt to control costs, but the broad NAICS code could imply a wide range of potential service costs. Further analysis would require understanding the specific deliverables and comparing them to industry standards for business support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' which typically means that all responsible sources were permitted to submit a bid. With 3 bidders, this suggests a moderate level of competition. While more than one bidder is positive, a higher number of bidders generally leads to more robust price discovery and potentially lower prices for the government. The specific details of the solicitation and evaluation process would further clarify the effectiveness of this competition.

Taxpayer Impact: A competitive bidding process, even with three bidders, is generally favorable for taxpayers as it encourages lower pricing and better service offerings compared to sole-source awards.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving business support services essential for its operations. The contract likely supports administrative, logistical, or other business functions within the FAA. The geographic impact is concentrated in Virginia, where the contractor SERCO MANAGEMENT SERVICES, INC. is located and likely performs the services. Workforce implications may include employment opportunities for individuals with skills in business support, administration, and potentially specialized areas depending on the exact services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Broad NAICS code (561499) could lead to scope creep or performance issues if not clearly defined.
Fixed-price contract may not adequately account for unforeseen changes in service requirements.
Limited competition (3 bidders) might have resulted in a higher-than-optimal price.
Contract duration of nearly 5 years could lead to contractor complacency or outdated service delivery methods.

Positive Signals

Awarded under full and open competition, indicating an effort to secure the best value.
Fixed-price contract provides cost certainty for the government.
Contractor SERCO MANAGEMENT SERVICES, INC. has a track record, implying experience in delivering services.
The contract duration suggests a stable and ongoing need for the services provided.

Sector Analysis

This contract falls within the Business Support Services sector, specifically under NAICS code 561499. This broad category encompasses a wide array of services such as collection agencies, credit bureaus, mailing services, and telemarketing. The Federal Aviation Administration's use of such services indicates a need for operational efficiency and administrative support. Comparable spending benchmarks would depend heavily on the specific services procured, but the overall market for business support services is substantial, with numerous providers ranging from small specialized firms to large diversified companies like Serco.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses are unlikely to be direct beneficiaries of this award. However, there may be subcontracting opportunities if Serco chooses to engage small businesses for specific tasks, though this is not explicitly stated. The overall impact on the small business ecosystem would be minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Federal Aviation Administration. As a firm-fixed-price contract, oversight would focus on ensuring that the services delivered meet the contract's specifications and performance standards. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Federal Aviation Administration Operations
Business Support Services Contracts
Department of Transportation Procurement
Firm Fixed Price Contracts
Contracting with Serco

Risk Flags

Broad NAICS code may indicate unclear service definition.
Moderate competition level could impact price optimization.
Fixed-price contract risks for evolving service needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $23.2 million to SERCO MANAGEMENT SERVICES, INC.. SERCO AREA 7

Who is the contractor on this award?

The obligated recipient is SERCO MANAGEMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2010-02-01. End: 2015-06-30.

What specific business support services were provided under this contract?

The contract falls under NAICS code 561499, 'All Other Business Support Services.' This is a very broad category that can include services such as administrative support, mail processing, call center operations, document management, and other general business functions. Without access to the detailed contract statement of work (SOW), it is impossible to specify the exact services rendered. The Federal Aviation Administration (FAA) likely utilized these services to enhance operational efficiency, manage administrative tasks, or support specific programs. The nature of these services would dictate their impact on FAA's mission and operational effectiveness.

How does the $23.2 million contract value compare to similar FAA contracts for business support services?

Benchmarking this $23.2 million contract requires comparing it to other FAA contracts for 'All Other Business Support Services' (NAICS 561499) awarded over a similar timeframe (2010-2015) and duration (approximately 5 years). A preliminary review of federal procurement data suggests that contracts within this category can range significantly in value, from tens of thousands to tens of millions of dollars, depending on the scope and duration. Given the 5-year period, an average annual spend of approximately $4.6 million is substantial but not necessarily out of line for a large federal agency like the FAA. However, a more precise comparison would necessitate identifying contracts with highly similar SOWs and performance metrics.

What are the potential risks associated with a firm-fixed-price contract for broad business support services?

A firm-fixed-price (FFP) contract, while offering cost certainty to the government, carries risks when applied to broad service categories like 'All Other Business Support Services.' One primary risk is scope creep; if the government's needs evolve beyond the initial SOW, the contractor may be hesitant to perform additional work without a contract modification, potentially leading to delays or disputes. Conversely, if the SOW is too vague, the contractor might under-deliver on services they deem outside the scope, leading to performance issues. The FFP structure can also disincentivize innovation or efficiency improvements by the contractor, as they are locked into a price regardless of how efficiently they perform. For the government, the risk lies in potentially paying a premium if the contractor's costs are lower than anticipated, or facing performance shortfalls if the price is too low to incentivize quality.

What was the track record of SERCO MANAGEMENT SERVICES, INC. prior to this award?

Serco Management Services, Inc. is a subsidiary of the larger Serco Group plc, a global provider of public services. Prior to this 2010 award, Serco had established a significant presence in the US federal contracting space, often winning large contracts across various civilian and defense agencies. Their track record typically involved managing complex operations, providing IT services, and delivering support functions. The company has historically been involved in contracts related to transportation, defense, and citizen services. The award of this FAA contract suggests that Serco met the agency's requirements for experience, financial stability, and technical capability at that time. However, like many large contractors, Serco has also faced scrutiny and contract disputes on various programs throughout its history.

How did the competition level (3 bidders) impact the potential value for taxpayers?

Having three bidders for this contract represents a moderate level of competition. While it's better than a sole-source award, it may not be as competitive as solicitations attracting five or more bids. With three bidders, there's a reasonable chance that the pricing submitted reflected competitive pressures, potentially leading to a fair market price. However, it also increases the possibility that the winning bid was not the absolute lowest price achievable in a more crowded field. Taxpayers benefit from competition by generally receiving lower prices and higher quality services. The specific impact here depends on the nature of the services and the market dynamics for those specific business support functions. A more robust competition could have potentially driven the price down further.

What is the significance of the contract being awarded by the Federal Aviation Administration (FAA)?

The awarding agency, the Federal Aviation Administration (FAA), is a critical component of the U.S. Department of Transportation responsible for ensuring the safety of civil aviation. This contract, valued at over $23 million, indicates that the FAA required substantial business support services to fulfill its mission. These services could range from administrative functions supporting air traffic control operations, regulatory compliance, or personnel management, to logistical support for the agency's vast infrastructure. The FAA's specific needs and operational environment would dictate the precise nature and importance of the business support services procured from Serco Management Services, Inc.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $23,238,169

Exercised Options: $23,238,169

Current Obligation: $23,238,169

Contract Characteristics

Cost or Pricing Data: NO

Timeline