DoD Awards $33.5M for Satellite Communications Support to Serco Inc

Contract Overview

Contract Amount: $33,525,153 ($33.5M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2016-08-01

End Date: 2021-07-31

Contract Duration: 1,825 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF MILITARY SATELLITE COMMUNICATIONS SUPPORT

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to SERCO INC for work described as: IGF::OT::IGF MILITARY SATELLITE COMMUNICATIONS SUPPORT Key points: 1. Contract awarded to Serco Inc. for military satellite communications support. 2. Total value of $33.5 million over a 5-year period. 3. Competition type was full and open, suggesting market availability. 4. Contract type is Cost Plus Fixed Fee, which can pose cost control risks. 5. Sector is Defense, specifically engineering services for satellite communications.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee contract type allows for cost reimbursement plus a fixed fee, which can incentivize contractors to increase costs. Benchmarking against similar satellite communications support contracts is needed to assess if the fixed fee and overall cost structure are competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely considered. This method generally promotes competitive pricing, but the Cost Plus Fixed Fee structure may still lead to higher-than-expected costs if not closely managed.

Taxpayer Impact: Taxpayer funds are being used for essential military satellite communications support. While competition was present, the contract type warrants careful oversight to ensure cost efficiency and value for money.

Public Impact

Ensures critical military satellite communication capabilities remain operational. Supports national defense infrastructure and readiness. Potential for cost overruns due to the CPFF contract type. Impacts the defense contracting sector and associated supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Long contract duration (5 years)
No indication of small business participation

Positive Signals

Full and open competition
Essential service for national defense

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting military satellite communications. Spending in this area is critical for national security, and benchmarks often vary widely based on technological complexity and specific requirements.

Small Business Impact

The data indicates that small businesses were not directly involved as the prime contractor. Further analysis would be needed to determine if small businesses were included as subcontractors, which is common in large defense contracts.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial, especially with a Cost Plus Fixed Fee structure, to monitor costs, performance, and ensure adherence to contract terms.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of transparency on small business subcontracting.
Potential for contractor performance issues over a long duration.
Need for robust oversight to manage costs and ensure value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to SERCO INC. IGF::OT::IGF MILITARY SATELLITE COMMUNICATIONS SUPPORT

Who is the contractor on this award?

The obligated recipient is SERCO INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $33.5 million.

What is the period of performance?

Start: 2016-08-01. End: 2021-07-31.

What is the typical profit margin for similar Cost Plus Fixed Fee satellite communication support contracts awarded by the DoD?

Profit margins for CPFF contracts in the satellite communications support sector can vary significantly based on contract complexity, risk, and the specific services provided. Generally, fixed fees are negotiated to represent a reasonable profit, often ranging from 7-15% of the estimated cost. However, without specific benchmarks for this particular service niche and contract size, it's difficult to provide a precise comparison. Further analysis of historical DoD contracts for similar services would be necessary.

What are the specific performance metrics and key performance indicators (KPIs) used to evaluate Serco Inc.'s performance under this contract?

The provided data does not detail the specific performance metrics or KPIs established for this contract. Effective oversight would require clearly defined metrics related to satellite uptime, communication reliability, response times for technical issues, and adherence to security protocols. The contracting officer's representative (COR) would typically monitor these KPIs to ensure Serco Inc. meets its contractual obligations and delivers the required level of service.

How does the $33.5 million total award compare to the estimated cost of similar satellite communication support services procured by the DoD in recent years?

Direct comparison of the $33.5 million total award to similar contracts is challenging without more granular data on the scope of services and specific technological requirements. However, given the 5-year duration and the critical nature of military satellite communications, this figure appears within a plausible range for comprehensive support. A detailed cost-benefit analysis, including benchmarking against other full and open competition awards for comparable services, would be necessary to definitively assess its value.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002415R3426

Offers Received: 2

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: $37,400,935

Exercised Options: $37,400,935

Current Obligation: $33,525,153

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $10,949,845

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D8007

IDV Type: IDC

Timeline