DoD Awards $22.9M for CVN 74 IC Installation Labor to Serco Inc

Contract Overview

Contract Amount: $22,902,930 ($22.9M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2022-07-13

End Date: 2026-10-06

Contract Duration: 1,546 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CVN 74 IC INSTALLATION LABOR

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to SERCO INC for work described as: CVN 74 IC INSTALLATION LABOR Key points: 1. Significant contract value of $22.9 million for specialized engineering services. 2. Competition was full and open, suggesting a competitive bidding process. 3. Contract type is Cost Plus Fixed Fee, which can carry cost overrun risks. 4. Services fall under Engineering Services (NAICS 541330), a critical sector for defense infrastructure.

Value Assessment

Rating: good

The contract value of $22.9 million appears reasonable for specialized engineering services related to aircraft carrier installations. Benchmarking against similar large-scale naval engineering contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a robust process for selecting the contractor. This method generally promotes competitive pricing and ensures the best value is sought.

Taxpayer Impact: The use of full and open competition aims to secure the most cost-effective solution for taxpayers, although the Cost Plus Fixed Fee structure warrants monitoring for potential cost escalations.

Public Impact

Ensures continued operational readiness and maintenance of a key naval asset (CVN 74). Supports specialized engineering jobs within the defense sector. Impacts the supply chain for naval shipbuilding and repair services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs if not managed closely.
Long contract duration (over 4 years) requires ongoing performance monitoring.

Positive Signals

Awarded under full and open competition.
Supports critical naval infrastructure.

Sector Analysis

This contract falls within the Engineering Services sector, which is vital for the Department of Defense's operational capabilities. Spending in this sector is often high due to the complexity and specialized nature of defense projects.

Small Business Impact

The data does not indicate if small businesses were involved as subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of the Navy awarded this contract, implying oversight from this agency. The contract's duration and value suggest a need for diligent performance and financial oversight to ensure taxpayer funds are used efficiently.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns due to CPFF contract type.
Long-term contract duration requires sustained oversight.
Complexity of 'IC INSTALLATION LABOR' implies high risk of performance issues.
Lack of small business participation data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to SERCO INC. CVN 74 IC INSTALLATION LABOR

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 $22.9 million.

What is the period of performance?

Start: 2022-07-13. End: 2026-10-06.

What is the typical profit margin for Cost Plus Fixed Fee contracts in the defense engineering sector, and how does Serco Inc.'s fee compare?

Cost Plus Fixed Fee (CPFF) contracts typically allow the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Profit margins in defense engineering can vary but often range from 7-15%. A detailed review of Serco Inc.'s fee structure within this specific contract, compared to industry averages and historical data for similar services, would be necessary to assess if it is competitive and reasonable.

What specific 'IC INSTALLATION LABOR' tasks are covered under this contract, and what are the associated risks if these are not performed adequately?

The contract likely covers labor for installing Integrated Combat Systems or similar critical electronic and combat systems aboard the USS John C. Stennis (CVN 74). Inadequate performance could lead to significant delays in the carrier's modernization or repair schedule, compromise combat readiness, necessitate costly rework, and potentially impact the safety of the vessel and its crew. The risk is high given the complexity of these systems.

How does the awarded amount of $22.9 million compare to the estimated value or budget for similar aircraft carrier installation labor contracts?

Without specific benchmark data for comparable CVN installation labor contracts, it's difficult to definitively assess the $22.9 million award. However, considering the scale and complexity of aircraft carrier modernization and maintenance, this figure appears within a plausible range for a multi-year effort involving specialized engineering services. A comparative analysis with historical contracts for similar work on other carriers would provide a more precise valuation.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003917R0043

Offers Received: 3

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: $22,902,930

Exercised Options: $22,902,930

Current Obligation: $22,902,930

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $1,817,213

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003919D0032

IDV Type: IDC

Timeline