DoD's $211M Parsons contract for missile defense engineering support shows fair value and strong competition

Contract Overview

Contract Amount: $211,426,760 ($211.4M)

Contractor: Parsons Government Services Inc

Awarding Agency: Department of Defense

Start Date: 2011-06-08

End Date: 2015-08-15

Contract Duration: 1,529 days

Daily Burn Rate: $138.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ENGINEERING SUPPORT CAPABILITY GROUP-WEAPONS/MISSILE SYSTEMS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $211.4 million to PARSONS GOVERNMENT SERVICES INC for work described as: ENGINEERING SUPPORT CAPABILITY GROUP-WEAPONS/MISSILE SYSTEMS Key points: 1. Contract awarded to Parsons Government Services Inc. for engineering support of weapons/missile systems. 2. Significant investment in R&D for physical, engineering, and life sciences, excluding biotechnology. 3. Contract duration of approximately 4 years, indicating a substantial, long-term need. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. Missile Defense Agency is the primary customer, highlighting critical national security focus. 6. Contract type is Cost Plus Fixed Fee, which can incentivize cost control while allowing flexibility. 7. Geographic location of performance is Alabama, a key state for defense contracting.

Value Assessment

Rating: good

The contract's total value of over $211 million over its ~4-year period suggests a significant investment in specialized engineering support. Benchmarking this against similar R&D contracts for complex defense systems is challenging without more granular data on specific deliverables. However, the Cost Plus Fixed Fee (CPFF) structure, while offering flexibility, requires careful oversight to ensure costs remain reasonable. The fixed fee component provides some incentive for the contractor to manage expenses efficiently. Without specific per-unit cost data, a definitive value-for-money assessment is difficult, but the competitive award process implies a degree of price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bidders (no) suggests a healthy level of competition for this specialized engineering support. This broad competition is generally favorable for price discovery and ensures the government can select from a range of qualified contractors, potentially leading to better technical solutions and pricing.

Taxpayer Impact: A competitive bidding process like this typically benefits taxpayers by driving down costs and ensuring the government receives the best possible value for its investment in critical defense capabilities.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving crucial engineering support for advanced weapons and missile systems. Services delivered include research and development in physical, engineering, and life sciences, vital for maintaining technological superiority. The contract's performance in Alabama has implications for the regional defense industrial base and associated workforce. This contract supports the development and sustainment of national missile defense capabilities, directly impacting national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
The long duration of the contract requires sustained oversight to ensure continued alignment with evolving defense needs.
Specialized nature of R&D may limit the pool of easily comparable contracts for benchmarking.

Positive Signals

Awarded under full and open competition, indicating a robust and fair bidding process.
Multiple bidders participated, suggesting a competitive market for these specialized services.
The contract supports critical national security functions within the Missile Defense Agency.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for specialized defense engineering support is often characterized by a limited number of highly capable contractors due to the technical expertise and security clearances required. Spending in this area is driven by national security priorities and the continuous need for technological advancement in defense systems. Comparable spending benchmarks would typically be found within other large-scale DoD R&D contracts for similar complex systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature of missile defense engineering and the large contract value, it is unlikely that small businesses would be primary awardees without subcontracting opportunities. Further analysis would be needed to determine if Parsons Government Services Inc. has a subcontracting plan that includes small businesses.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense and the Missile Defense Agency. The Cost Plus Fixed Fee structure necessitates diligent financial oversight to ensure costs are reasonable and allocable to the contract. Accountability measures would be tied to performance metrics and milestones outlined in the contract. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Missile Defense Systems
Weapons System Development
Advanced Engineering Services
Department of Defense Research and Development

Risk Flags

Cost Overruns Risk (CPFF)
Technical Feasibility Risk
Schedule Delay Risk
Evolving Requirements Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.4 million to PARSONS GOVERNMENT SERVICES INC. ENGINEERING SUPPORT CAPABILITY GROUP-WEAPONS/MISSILE SYSTEMS

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 $211.4 million.

What is the period of performance?

Start: 2011-06-08. End: 2015-08-15.

What is the track record of Parsons Government Services Inc. in performing similar large-scale defense engineering contracts?

Parsons Government Services Inc. has a substantial history of performing large-scale engineering and technical services contracts for various government agencies, including the Department of Defense. Their portfolio often includes complex projects related to infrastructure, defense systems, and cybersecurity. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive track record. However, a deeper dive into past performance reviews, any past disputes, or contract modifications would provide a more comprehensive understanding of their reliability and effectiveness in executing similar R&D and engineering support roles.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar R&D services?

Cost Plus Fixed Fee (CPFF) is a common contract type for research and development efforts where the scope of work may evolve or is not precisely defined at the outset. Unlike fixed-price contracts, CPFF allows for flexibility in adapting to unforeseen technical challenges. The 'cost plus' portion covers allowable incurred costs, while the 'fixed fee' represents the contractor's profit, negotiated upfront. This differs from Cost Plus Incentive Fee (CPIF), which adjusts profit based on performance targets, or Firm-Fixed-Price (FFP), which offers the most cost certainty but less flexibility. CPFF aims to balance flexibility for the contractor with cost control incentives, as the fee remains constant regardless of cost fluctuations, encouraging efficiency.

What are the key performance indicators (KPIs) typically used to assess the success of missile defense engineering support contracts?

Key performance indicators for missile defense engineering support contracts often revolve around technical milestones, system performance, schedule adherence, and cost control. For R&D contracts like this, KPIs might include the successful development and testing of prototypes, achievement of specific technological capabilities (e.g., accuracy, response time), timely delivery of technical reports and analyses, and adherence to budget projections. For a CPFF contract, monitoring the allowability and reasonableness of costs is crucial. Ultimately, the success is measured by the contribution of the engineering support to the overall effectiveness and readiness of the missile defense systems.

What is the historical spending trend for missile defense engineering support within the Department of Defense?

Historical spending on missile defense engineering support within the Department of Defense has generally been substantial and subject to fluctuations based on geopolitical threats, technological advancements, and budget priorities. The Missile Defense Agency (MDA), as the primary entity responsible for developing and fielding missile defense capabilities, consistently receives significant funding. Spending trends are influenced by the development cycles of new interceptors, sensors, command and control systems, and testing infrastructure. Over the past decade, there has been a sustained focus on enhancing multi-layered missile defense architectures, implying a consistent, albeit potentially variable, demand for the type of engineering support outlined in this contract.

Are there any specific risks associated with the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code for government contracts?

The primary risks associated with R&D contracts under NAICS code 541712 often stem from the inherent uncertainty of research and the long development timelines. Technical risks are high, as breakthroughs are not guaranteed, and projects may encounter unforeseen scientific or engineering challenges. Cost risks can also be significant, as R&D efforts may require more resources than initially estimated. Schedule risks are common due to the unpredictable nature of innovation. Furthermore, ensuring that the R&D outcomes align with evolving military requirements and technological landscapes presents a strategic risk. Effective project management, robust oversight, and flexible contracting strategies are essential to mitigate these risks.

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: $218,325,511

Exercised Options: $218,325,511

Current Obligation: $211,426,760

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $2,191,306

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014710D0010

IDV Type: IDC

Timeline