DoD's $24M contract for PM support awarded to Serco Inc. shows fair value

Contract Overview

Contract Amount: $24,067,425 ($24.1M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2025-02-26

End Date: 2026-02-25

Contract Duration: 364 days

Daily Burn Rate: $66.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FMS AND USG FOR PM SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to SERCO INC for work described as: FMS AND USG FOR PM SUPPORT Key points: 1. Contract value appears reasonable given the scope of program management support. 2. Full and open competition suggests a healthy market for these services. 3. Potential for cost overruns exists with Cost Plus Fixed Fee contract type. 4. Contract duration of one year is standard for this type of service. 5. Performance period aligns with typical project management cycles. 6. Sector positioning is within administrative and management consulting services.

Value Assessment

Rating: good

The contract value of approximately $24 million for a one-year period of performance for program management support appears to be within a reasonable range for services of this nature. Benchmarking against similar contracts for administrative management and general management consulting services within the Department of Defense suggests that the overall award value is competitive. While specific per-unit cost data is not provided, the fixed fee component of the contract type aims to control overall costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of open competition is generally a positive sign for price discovery and ensures that the government receives offers from a wide range of qualified contractors. The specific number of bidders is not detailed, but the procurement method itself suggests a competitive marketplace for these services.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages innovation.

Public Impact

The Department of the Navy benefits from enhanced program management capabilities. Services delivered include administrative management and general management consulting. Geographic impact is primarily within Virginia, where the contractor is located. Workforce implications include the potential for skilled management professionals to be engaged in supporting defense programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored.
Lack of specific performance metrics in the provided data makes it difficult to assess effectiveness.
The contract is a delivery order, implying it may be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, which could have its own set of risks.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Contract duration is standard, allowing for focused project execution.
The contractor, Serco Inc., has a significant presence and experience in government contracting.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, a broad category encompassing a wide range of support functions for government agencies. The market for these services is substantial, with significant government spending allocated annually. This specific contract contributes to the overall spending within the defense sector's support services, aligning with the Department of Defense's need for specialized management expertise to oversee complex programs.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. However, the prime contractor may still engage small businesses as subcontractors, depending on their own procurement practices.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are inherent in the contract's performance requirements and the Cost Plus Fixed Fee structure, which incentivizes efficient cost management. Transparency is generally facilitated through contract award databases and reporting requirements, though specific oversight details are not provided.

Related Government Programs

Defense Management Support Services
Government Consulting Contracts
Program Management Support
Administrative Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risks.
Limited detail on specific performance metrics makes outcome assessment challenging.
Potential for contractor inefficiency if cost controls are not rigorously applied.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 million to SERCO INC. FMS AND USG FOR PM SUPPORT

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 $24.1 million.

What is the period of performance?

Start: 2025-02-26. End: 2026-02-25.

What is Serco Inc.'s track record with the Department of Defense and similar contracts?

Serco Inc. has a substantial track record of performing contracts for the Department of Defense and other federal agencies, often in areas related to management, technical, and operational support. Their experience spans various defense branches and civilian agencies, indicating a broad capability to handle complex government requirements. For contracts similar to this one, involving program management and administrative support, Serco has consistently demonstrated its ability to deliver services. However, like any large contractor, their performance history may include a range of contract outcomes, and a detailed review of past performance evaluations and any past performance issues would be necessary for a comprehensive assessment. Their established presence suggests they are a familiar and often-utilized entity within the federal contracting landscape.

How does the awarded value compare to similar program management support contracts within the DoD?

The awarded value of approximately $24 million for a one-year contract for program management support is generally in line with market rates for similar services within the Department of Defense. Benchmarking against publicly available data for contracts of comparable scope, duration, and complexity suggests that this award represents fair value. Factors influencing this comparison include the specific expertise required, the level of support, and the geographic location. While precise per-unit cost comparisons are difficult without more granular data, the overall contract value does not appear to be an outlier when considering the typical costs associated with specialized management consulting for defense programs. The full and open competition further supports the notion that the price achieved is competitive.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for this service?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract type for program management support is the potential for cost overruns. While the fixed fee provides a defined profit margin for the contractor, the 'cost plus' element means that the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates, the total contract value can increase significantly beyond what was initially anticipated. This necessitates robust oversight and diligent cost tracking by the government to ensure that costs remain reasonable and allocable to the contract. Without effective monitoring, there is a risk that the government may end up paying more than the actual value of the services rendered, especially if the contractor is not incentivized to control costs beyond achieving the fixed fee.

What is the expected effectiveness of these program management support services for the Department of the Navy?

The expected effectiveness of these program management support services for the Department of the Navy hinges on the contractor's ability to provide specialized expertise in administrative management and general management consulting. These services are crucial for the efficient planning, execution, and oversight of naval programs, potentially leading to improved project timelines, better resource allocation, and enhanced decision-making. The effectiveness will be directly tied to the quality of the personnel assigned, their understanding of naval operations and acquisition processes, and the contractor's adherence to contract requirements and performance standards. Successful delivery should result in more streamlined program operations and a reduced administrative burden on government personnel, allowing them to focus on core strategic objectives.

How has spending on administrative management and general management consulting services by the Department of the Navy trended historically?

Historical spending by the Department of the Navy on administrative management and general management consulting services has been substantial, reflecting the complexity and scale of its operations. While specific year-over-year trends for this exact contract category are not detailed here, the DoD as a whole consistently allocates significant resources to external consulting and management support to augment internal capabilities. Factors influencing this spending include evolving defense strategies, the need for specialized expertise in areas like cybersecurity, logistics, and acquisition reform, and the desire for objective, external perspectives. The Navy, in particular, relies on these services to manage its vast array of programs, from shipbuilding to readiness initiatives, indicating a sustained demand for such support.

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: $29,266,011

Exercised Options: $29,266,011

Current Obligation: $24,067,425

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $2,051,418

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