DoD's $36M R&D Contract for C3BM with Parsons Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $35,954,812 ($36.0M)

Contractor: Parsons Government Services Inc

Awarding Agency: Department of Defense

Start Date: 2011-05-24

End Date: 2014-03-21

Contract Duration: 1,032 days

Daily Burn Rate: $34.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MIDAESS FUNCTIONAL CAPABILITY GROUP DE-08-10, C3BM

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $36.0 million to PARSONS GOVERNMENT SERVICES INC for work described as: MIDAESS FUNCTIONAL CAPABILITY GROUP DE-08-10, C3BM Key points: 1. The contract awarded to Parsons Government Services Inc. for C3BM capabilities represents a significant investment in missile defense R&D. 2. Competition was full and open, suggesting a potentially competitive pricing environment, but the final price is still a key factor. 3. Potential risks include the complexity of C3BM technology and ensuring the fixed-fee structure adequately controls costs. 4. The R&D sector, particularly in defense, often involves high costs due to innovation and specialized expertise.

Value Assessment

Rating: fair

The contract's value of $35.95 million for a 3-year period needs careful evaluation against similar R&D efforts in advanced defense systems. Benchmarking against comparable contracts is crucial to determine if the pricing reflects fair market value for the delivered capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the effectiveness of this competition in achieving optimal price discovery for complex R&D services needs to be assessed based on the final negotiated price and the number of bids received.

Taxpayer Impact: The use of taxpayer funds for this contract necessitates rigorous oversight to ensure value for money and that the competitive process yielded a fair price, minimizing waste.

Public Impact

Taxpayers are funding advanced missile defense research, aiming to enhance national security. The contract supports technological innovation within the defense sector, potentially leading to future advancements. The success of this project could impact the effectiveness and cost of future defense procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed-fee contracts can incentivize cost overruns if not managed tightly.
The specific R&D outcomes and their long-term value are inherently uncertain.
Potential for scope creep in complex research and development projects.

Positive Signals

Awarded through full and open competition, indicating a potentially robust bidding process.
Contract addresses a critical national security need in missile defense.
The contractor, Parsons Government Services Inc., has experience in government contracting.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences for missile defense. Spending in this area is often characterized by high upfront investment, long development cycles, and significant technological risk, with benchmarks varying widely based on project scope and innovation level.

Small Business Impact

The provided data does not indicate any specific subcontracting goals or participation by small businesses in this contract. Further investigation would be needed to determine if small businesses were involved or had opportunities to participate.

Oversight & Accountability

Oversight of this contract is primarily the responsibility of the Department of Defense, specifically the Missile Defense Agency. Ensuring accountability will involve monitoring project milestones, cost expenditures, and the achievement of technical objectives throughout the contract's duration.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Cost-plus fixed-fee contract type can lead to cost overruns if not managed properly.
The inherent uncertainty and complexity of R&D projects pose a risk to achieving desired outcomes within budget.
Lack of specific performance metrics or clear deliverables in the provided data makes assessing success difficult.
The duration of the contract (over 3 years) increases the potential for scope creep and evolving requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to PARSONS GOVERNMENT SERVICES INC. MIDAESS FUNCTIONAL CAPABILITY GROUP DE-08-10, C3BM

Who is the contractor on this award?

The obligated recipient is PARSONS GOVERNMENT SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $36.0 million.

What is the period of performance?

Start: 2011-05-24. End: 2014-03-21.

What specific technological advancements or capabilities are expected from this $36 million R&D investment in C3BM?

The contract aims to develop and enhance Command, Control, Communications, and Battle Management (C3BM) capabilities for missile defense. Expected outcomes likely include improved sensor integration, faster decision-making processes, enhanced threat assessment, and more effective engagement coordination. The specific advancements are tied to the evolving landscape of missile threats and the need for a more integrated and responsive defense architecture.

How does the cost-plus fixed-fee structure mitigate or exacerbate the inherent risks in R&D projects like C3BM?

Cost-plus fixed-fee (CPFF) contracts allow the contractor to recover all allowable costs plus a predetermined fixed fee. For R&D, this can incentivize innovation by covering exploratory expenses. However, it also carries the risk of cost overruns if the contractor's costs exceed estimates, as the fixed fee doesn't adjust. Effective oversight is crucial to manage costs and ensure the fee remains appropriate for the work performed.

What is the long-term strategic value of investing in C3BM capabilities through this contract for the Department of Defense?

Investing in C3BM is strategically vital for maintaining a robust missile defense posture. It enables better situational awareness, faster response times, and more effective integration of various defense assets. This contract contributes to modernizing critical command and control systems, ensuring the DoD can counter increasingly sophisticated missile threats and protect national interests.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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: HQ014709R0002

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Parsons Corporation (UEI: 030866545)

Address: 25531 COMMERCENTRE DR STE 120, LAKE FOREST, CA, 92630

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,921,502

Exercised Options: $38,921,502

Current Obligation: $35,954,812

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $8,808,281

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014710D0010

IDV Type: IDC

Timeline