DoD's F-35 Program Management Support Contract Awarded to Serco Inc. for $20.88 Million

Contract Overview

Contract Amount: $20,880,565 ($20.9M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2024-02-26

End Date: 2025-02-25

Contract Duration: 365 days

Daily Burn Rate: $57.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROGRAM MANAGMENT SUPPORT FOR THE F-35 JOINT PROGRAM OFFICE

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to SERCO INC for work described as: PROGRAM MANAGMENT SUPPORT FOR THE F-35 JOINT PROGRAM OFFICE Key points: 1. Contract focuses on essential program management support for the F-35 Joint Program Office. 2. Serco Inc. secured the contract through full and open competition. 3. The contract duration is one year, indicating a need for ongoing support. 4. Administrative Management and General Management Consulting Services are the primary focus. 5. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee. 6. This award represents a significant investment in maintaining the complex F-35 program.

Value Assessment

Rating: good

The contract value of $20.88 million for a one-year period for program management support appears reasonable given the complexity and scale of the F-35 program. Benchmarking against similar large-scale defense program support contracts would provide further context, but the scope suggests a significant operational requirement. The Cost Plus Fixed Fee (CPFF) contract type is common for services where costs are difficult to predict precisely, but it necessitates careful oversight to ensure 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 capable contractors had the opportunity to bid. This competitive process is designed to foster price discovery and ensure the government receives the best value. The fact that Serco Inc. was selected indicates they offered a compelling proposal in terms of technical capability, management approach, and price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider pool of potential service providers, leading to more competitive pricing.

Public Impact

The primary beneficiaries are the Department of Defense and the F-35 Joint Program Office, ensuring the continued efficient management of the F-35 program. Services delivered include administrative management and general management consulting, crucial for the operational success of a major defense acquisition program. The geographic impact is primarily within the United States, supporting the F-35 program's domestic operations and oversight. Workforce implications include the potential for Serco Inc. to utilize skilled management consultants and administrative professionals, contributing to employment in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently, requiring robust oversight.
The reliance on a single contractor for critical program management functions could pose a risk if performance falters.
The specific nature of 'program management support' can be broad, requiring clear performance metrics to ensure accountability.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The contract is for a defined period, allowing for periodic re-evaluation of needs and contractor performance.
Serco Inc. is a known entity in government contracting, suggesting a level of established capability.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on management consulting. The defense sector, particularly major weapons systems like the F-35, relies heavily on specialized program management support to navigate complex acquisition, development, and sustainment phases. Spending in this area is critical for ensuring the effective and efficient execution of multi-billion dollar defense programs, with comparable contracts often involving significant dollar values for specialized expertise.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false) or subcontracting goals explicitly stated in the provided data (sb: false). Therefore, the direct impact on small businesses through this specific award is likely minimal. However, Serco Inc., as a large prime contractor, may engage small businesses as subcontractors for specialized support, though this is not guaranteed or detailed in the award information. The focus on large-scale program management suggests a reliance on established, larger service providers.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, acting on behalf of the F-35 Joint Program Office. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee is justified. Accountability measures will be tied to the performance work statement and delivery orders issued under this contract. Transparency is typically maintained through contract reporting mechanisms, though specific public access to detailed performance data may be limited.

Related Government Programs

F-35 Joint Program Office Operations
Defense Acquisition Program Management
Aerospace Program Support
Government Consulting Services

Risk Flags

Potential for cost overruns under CPFF contract type.
Reliance on a single contractor for critical support functions.
Need for robust government oversight to ensure performance and cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to SERCO INC. PROGRAM MANAGMENT SUPPORT FOR THE F-35 JOINT PROGRAM OFFICE

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 $20.9 million.

What is the period of performance?

Start: 2024-02-26. End: 2025-02-25.

What is Serco Inc.'s track record with the Department of Defense and specifically with the F-35 program?

Serco Inc. has a significant history of contracting with the U.S. Department of Defense across various agencies and programs. While specific details on their involvement with the F-35 program prior to this award are not provided in the data, their extensive experience in providing professional, scientific, and technical services, including management and administrative support, suggests a capacity to handle complex defense contracts. Their broader portfolio includes support for naval systems, IT services, and operational support for various government entities. A deeper dive into their past performance ratings and any past issues or successes related to similar large-scale defense programs would offer more insight into their suitability for this critical role.

How does the $20.88 million value compare to similar program management support contracts for major defense platforms?

The $20.88 million value for one year of program management support for the F-35 program is substantial, reflecting the immense complexity and strategic importance of the platform. Benchmarking this against similar contracts requires access to data on other major defense acquisition programs (e.g., other fighter jet programs, naval shipbuilding, or large IT modernization efforts). However, it is generally understood that program management support for systems as complex as the F-35, which involves multiple international partners and advanced technology, commands significant investment. Contracts for similar roles on programs like the F-22, or large-scale IT system overhauls, can range from tens to hundreds of millions of dollars annually, depending on the scope and duration. This award appears to be within the expected range for specialized, high-level support for a program of this magnitude.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for program management support?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. While the fixed fee incentivizes efficiency, there's less direct financial incentive for the contractor to aggressively control costs compared to fixed-price contracts. This necessitates robust government oversight to scrutinize allowable costs, ensure efficient resource utilization, and prevent scope creep that could inflate expenses. For the government, the risk lies in potentially paying more than anticipated if cost controls are not stringent. For the contractor, the risk is that the fixed fee might not adequately compensate them if unforeseen costs arise, though the 'plus cost' element mitigates this significantly.

How effective is full and open competition in ensuring value for money for taxpayer-funded defense contracts?

Full and open competition is widely considered the most effective method for ensuring value for money in taxpayer-funded defense contracts. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This competitive pressure encourages contractors to propose their best technical approaches and most cost-effective strategies to win the contract. Furthermore, it provides the government with a clear benchmark against which to evaluate proposals, making it easier to identify the offer that represents the best overall value, not just the lowest price. While it requires more upfront effort in solicitation and evaluation, the long-term benefits in terms of cost savings and improved performance are substantial.

What are the implications of awarding program management support for the F-35 to a single contractor like Serco Inc.?

Awarding critical program management support for a complex system like the F-35 to a single contractor, even through competition, carries implications. On the positive side, it can foster a deep understanding of the program's intricacies by the contractor, leading to more integrated and efficient support. It also simplifies contract management for the government. However, the primary implication is the potential for reduced leverage if performance issues arise or if market conditions change. A sole provider might have less incentive to innovate or reduce costs over time compared to a market with multiple competing support providers. This underscores the importance of strong performance metrics, clear contract terms, and diligent government oversight to ensure the contractor remains accountable and delivers optimal value throughout the contract period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001921R0027

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: $25,061,687

Exercised Options: $25,061,687

Current Obligation: $20,880,565

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $4,599,259

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922D0026

IDV Type: IDC

Timeline