Navy awards $22.8M engineering services contract to Serco Inc. for training and project support

Contract Overview

Contract Amount: $22,841,140 ($22.8M)

Contractor: Serco Inc

Awarding Agency: Department of Defense

Start Date: 2024-07-08

End Date: 2026-07-07

Contract Duration: 729 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NAVAL SEA SYSTEMS COMMAND - INDUSTRIAL OPERATIONS MANAGEMENT OFFICE (SEA04X) HAS A CURRENT, RECURRING, AND GROWING NEED TO PROVIDE PROFESSIONAL AND ENGINEERING SERVICES IN SUPPORT OF TRAINING AND PROJECT SUPPORT (TPS) PROGRAM.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to SERCO INC for work described as: NAVAL SEA SYSTEMS COMMAND - INDUSTRIAL OPERATIONS MANAGEMENT OFFICE (SEA04X) HAS A CURRENT, RECURRING, AND GROWING NEED TO PROVIDE PROFESSIONAL AND ENGINEERING SERVICES IN SUPPORT OF TRAINING AND PROJECT SUPPORT (TPS) PROGRAM. Key points: 1. Contract provides essential professional and engineering services for the Training and Project Support (TPS) program. 2. The recurring and growing need indicates sustained demand for these specialized services. 3. The contract duration of 729 days suggests a significant, long-term requirement. 4. The Cost Plus Fixed Fee (CPFF) pricing structure allows for flexibility but requires careful cost monitoring. 5. This award is part of a broader Department of Defense strategy to enhance training capabilities. 6. The engineering services sector is critical for maintaining and advancing military operational readiness.

Value Assessment

Rating: good

The contract value of $22.8 million over approximately two years appears reasonable for specialized engineering and professional services supporting a critical training program. Benchmarking against similar contracts for TPS programs within the Navy or other branches would provide a more precise value-for-money assessment. The CPFF structure necessitates robust oversight to ensure costs remain aligned with the fixed fee and project scope, mitigating potential overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is expected to drive fair pricing and encourage innovation. The presence of 4 bids suggests a healthy level of interest from qualified contractors in this service area.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

Naval personnel and training programs will benefit from enhanced engineering and project support. Services delivered will directly contribute to the effectiveness and modernization of military training initiatives. The primary geographic impact is within Virginia, where the Naval Sea Systems Command is located, but the training support may extend to various naval installations. The contract supports specialized engineering and professional roles, potentially impacting the civilian workforce within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently.
The recurring nature of the need might indicate a lack of long-term strategic sourcing or potential for consolidation.
Reliance on a single contractor for recurring services could create vendor lock-in.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contract addresses a 'current, recurring, and growing need,' indicating alignment with operational requirements.
The duration of the contract (729 days) provides stability for both the government and the contractor.

Sector Analysis

The engineering services sector supporting the defense industry is highly specialized, focusing on complex technical solutions for military applications. This contract fits within the broader category of professional services procured by the Department of Defense to maintain and enhance its operational capabilities. Comparable spending benchmarks for similar training and project support services within the Navy or other military branches would be necessary for a precise comparison, but the $22.8 million value over two years is consistent with the scale of such specialized support.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. However, the prime contractor, Serco Inc., may engage small businesses as subcontractors, depending on their own subcontracting plans and the nature of the services required. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Naval Sea Systems Command (SEA04X), which has a stated 'current, recurring, and growing need.' Accountability measures will be embedded within the Cost Plus Fixed Fee (CPFF) structure, requiring detailed cost reporting and justification. Transparency is typically maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Training Systems
Defense Engineering Services
Professional and Technical Support Services
Department of the Navy IT and Engineering Support
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Potential for vendor lock-in if the recurring need is not periodically re-competed strategically.
Dependence on specialized engineering services highlights the need for consistent funding and program stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to SERCO INC. NAVAL SEA SYSTEMS COMMAND - INDUSTRIAL OPERATIONS MANAGEMENT OFFICE (SEA04X) HAS A CURRENT, RECURRING, AND GROWING NEED TO PROVIDE PROFESSIONAL AND ENGINEERING SERVICES IN SUPPORT OF TRAINING AND PROJECT SUPPORT (TPS) PROGRAM.

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 $22.8 million.

What is the period of performance?

Start: 2024-07-08. End: 2026-07-07.

What is Serco Inc.'s track record with the Department of Defense, particularly in providing training and project support services?

Serco Inc. has a significant history of contracting with the U.S. Department of Defense, providing a wide array of services including training, logistics, IT support, and facilities management. Their experience often involves large-scale, complex programs. For training and project support specifically, Serco has been involved in various initiatives across different military branches. A detailed review of their past performance on similar contracts, including any past performance evaluations or awards, would be crucial to assess their suitability and reliability for this specific Naval Sea Systems Command requirement. This includes examining their ability to manage CPFF contracts effectively and deliver within scope and budget on prior engagements.

How does the $22.8 million contract value compare to similar engineering services contracts for training and project support within the Navy?

The $22.8 million contract value for approximately two years of engineering and professional services for the Training and Project Support (TPS) program is within a typical range for specialized defense support contracts. To provide a precise comparison, one would need to analyze recent awards for similar services (NAICS code 541330 - Engineering Services) issued by the Department of the Navy or other DoD entities. Factors such as contract duration, scope of work complexity, and the number of bidders influence pricing. Given the 'recurring and growing need,' this value suggests a substantial but not extraordinary investment for sustained support of critical naval training initiatives. Benchmarking against contracts with similar durations and service requirements would confirm if this represents good value for money.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the fixed fee provides the contractor with a profit incentive, the government bears the risk of increased costs incurred during performance. If the contractor's actual costs exceed initial estimates, the government pays those costs plus the agreed-upon fixed fee. This necessitates robust government oversight, including detailed cost tracking, auditing, and verification of expenses to ensure they are reasonable, allocable, and necessary. Without diligent management, CPFF contracts can become more expensive than initially anticipated, impacting the overall value proposition.

What is the expected impact of this contract on the effectiveness of naval training programs?

This contract is expected to significantly enhance the effectiveness of naval training programs by providing essential professional and engineering services. These services likely support the development, maintenance, and modernization of training systems, curricula, and simulation technologies. By ensuring that the Training and Project Support (TPS) program has the necessary technical expertise and project management capabilities, the Navy can better prepare its personnel for operational readiness. The 'recurring and growing need' suggests that these services are critical for adapting training to evolving threats and technologies, ultimately contributing to a more skilled and capable naval force.

How has spending on engineering services for naval training programs evolved over the past five years?

Analyzing historical spending on engineering services for naval training programs over the past five years would require access to detailed federal procurement data. However, generally, spending in this area tends to fluctuate based on modernization initiatives, new platform acquisitions, and evolving geopolitical threats that necessitate updated training protocols. There has been a consistent trend across the DoD towards leveraging advanced technologies, including simulations and virtual reality, in training, which often requires specialized engineering support. A 'growing need' as stated in the contract description suggests an upward trend or sustained high level of investment in these services, possibly driven by increased operational tempo or strategic shifts in naval readiness.

What does the number of bids (4) indicate about the competitiveness and potential for innovation in this contract?

Receiving 4 bids for this contract, awarded under full and open competition, suggests a moderately competitive market for these specialized engineering and professional services. While more bids could indicate even greater competition, 4 is a solid number that likely provided the Naval Sea Systems Command with sufficient options to evaluate technical capabilities and pricing. This level of competition generally fosters price discovery and encourages bidders to offer competitive terms. It also provides a reasonable basis for the government to assess whether the chosen contractor offers the best value, balancing cost, technical merit, and past performance. The number of bidders can also be an indicator of market interest and the availability of qualified firms.

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: N6426722R3014

Offers Received: 4

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: $97,089,895

Exercised Options: $36,793,594

Current Obligation: $22,841,140

Actual Outlays: $763,615

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $285,197

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8498

IDV Type: IDC

Timeline