Commerce Department awards $28.6M for NOAA cloud services, with Parsons Inc. securing the contract

Contract Overview

Contract Amount: $28,639,335 ($28.6M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Commerce

Start Date: 2024-03-18

End Date: 2026-07-17

Contract Duration: 851 days

Daily Burn Rate: $33.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SYSTEM INTEGRATION AND CLOUD MANAGEMENT SUPPORT SERVICES FOR TRACSS

Place of Performance

Location: CENTREVILLE, FAIRFAX County, VIRGINIA, 20120

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $28.6 million to PARSONS GOVERNMENT SERVICES INC. for work described as: SYSTEM INTEGRATION AND CLOUD MANAGEMENT SUPPORT SERVICES FOR TRACSS Key points: 1. Value for money appears fair given the 2-year duration and scope of system integration and cloud management. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a Time and Materials contract type potentially leading to cost overruns if not closely managed. 4. Performance context is for critical NOAA systems, highlighting the importance of reliable IT support. 5. Sector positioning is within government IT services, a large and competitive market.

Value Assessment

Rating: fair

The contract's value of approximately $28.6 million over roughly two years for system integration and cloud management services for NOAA's TRACSS system is within a reasonable range for such specialized IT support. Benchmarking against similar government IT service contracts, the pricing appears to be in line with market rates, though a detailed cost breakdown would be necessary for a definitive value assessment. The Time and Materials (T&M) pricing structure, while common, introduces a degree of uncertainty regarding final costs compared to fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of four bidders suggests a reasonably competitive environment, which typically benefits the government by driving down prices and encouraging innovation. The specific details of the bidding process and the number of proposals received would provide further insight into the strength of the competition.

Taxpayer Impact: A full and open competition generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the National Oceanic and Atmospheric Administration (NOAA) and its various scientific and operational programs, which rely on the TRACSS system. Services delivered include system integration and cloud management, crucial for maintaining and enhancing NOAA's IT infrastructure. The geographic impact is national, supporting NOAA's nationwide operations and data dissemination. Workforce implications include the potential for employment opportunities within Parsons Government Services Inc. and its subcontractors, as well as ensuring the continued employment of government personnel who rely on these IT systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type carries inherent risk of cost escalation if not meticulously monitored.
The duration of the contract (over two years) necessitates ongoing vigilance to ensure continued value and performance.
Dependence on a single contractor for critical IT infrastructure management can create vendor lock-in risks.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Parsons Government Services Inc. is an established contractor with experience in government IT services.
The contract supports critical NOAA operations, indicating a focus on essential government functions.

Sector Analysis

This contract falls within the broader government IT services sector, specifically focusing on system integration and cloud management. This is a significant and growing segment of federal spending as agencies continue to modernize their infrastructure and migrate to cloud-based solutions. The market is characterized by a mix of large prime contractors and specialized subcontractors, with significant competition driven by the need for advanced technical expertise and security clearances. Comparable spending benchmarks for similar IT modernization and cloud support contracts can vary widely based on scope, duration, and specific technologies involved.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While Parsons Government Services Inc. is the prime contractor, there is no explicit information provided regarding subcontracting plans or goals for small businesses. Federal regulations often encourage prime contractors to utilize small businesses for subcontracting opportunities. The absence of a small business set-aside does not preclude subcontracting, but it means there was no specific requirement mandating it from the outset of the competition.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) contracting officers and program managers. The Time and Materials (T&M) nature of the contract necessitates close monitoring of labor hours and material costs to ensure compliance with the contract terms and prevent cost overruns. Transparency is typically facilitated through contract reporting mechanisms and performance reviews. Depending on the specific IG jurisdiction for NOAA, the Inspector General's office may also provide oversight to ensure program integrity and prevent fraud, waste, and abuse.

Related Government Programs

NOAA IT Modernization Efforts
Federal Cloud Computing Strategy
System Integration Services
IT Infrastructure Support Contracts
Department of Commerce IT Spending

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Reliance on a single contractor for critical IT infrastructure.
Need for stringent oversight to ensure performance and value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $28.6 million to PARSONS GOVERNMENT SERVICES INC.. SYSTEM INTEGRATION AND CLOUD MANAGEMENT SUPPORT SERVICES FOR TRACSS

Who is the contractor on this award?

The obligated recipient is PARSONS GOVERNMENT SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2024-03-18. End: 2026-07-17.

What is Parsons Government Services Inc.'s track record with similar federal IT contracts, particularly those involving system integration and cloud management for scientific agencies?

Parsons Government Services Inc. has a substantial track record in providing IT services to the federal government, including system integration and cloud management. They have been involved in numerous contracts across various agencies, often focusing on complex infrastructure and mission-critical systems. For scientific agencies like NOAA, their experience would likely encompass managing large datasets, ensuring system uptime for research and operational continuity, and adhering to specific data security and compliance requirements. A review of their past performance evaluations (e.g., CPARS) and contract history would reveal specific successes and challenges in delivering similar services, providing a clearer picture of their capabilities and reliability in this domain.

How does the awarded amount of $28.6 million compare to the estimated value or previous spending on TRACSS system support?

Without specific historical spending data for the TRACSS system or a publicly disclosed independent government cost estimate (IGCE) for this specific contract action, a direct comparison is challenging. However, the $28.6 million award over approximately 2 years (851 days duration) suggests an average annual spend of roughly $14.3 million. This figure needs to be contextualized against the complexity and criticality of NOAA's TRACSS system. If TRACSS is a foundational system for data collection, processing, or dissemination, this level of investment could be considered reasonable. Conversely, if previous support costs were significantly lower, or if the scope has not demonstrably increased, it might warrant further scrutiny regarding the value proposition.

What are the primary risks associated with the Time and Materials (T&M) contract type for this specific service, and what mitigation strategies are in place?

The primary risk with a Time and Materials (T&M) contract is the potential for cost overruns, as the government pays for the actual labor hours and materials used, rather than a fixed price. This can be exacerbated if work is inefficiently performed or if scope creep occurs without proper controls. For system integration and cloud management, risks include extended development or troubleshooting times, unexpected technical challenges requiring more labor, and the potential for less stringent cost control by the contractor. Mitigation strategies typically involve robust oversight by the government, including detailed review of timesheets and invoices, setting ceiling prices, requiring regular progress reports, and clearly defining the scope of work. Strong contract administration and communication are crucial to managing T&M contracts effectively.

How does the performance of Parsons Government Services Inc. on this contract align with NOAA's mission objectives for data management and environmental monitoring?

The alignment of Parsons' performance with NOAA's mission hinges on the successful delivery of reliable and secure system integration and cloud management for the TRACSS system. TRACSS (presumably a system supporting NOAA's mission-critical data and operational needs) requires robust IT infrastructure to function effectively. If Parsons ensures high system availability, efficient data processing, secure cloud operations, and seamless integration with other NOAA systems, their performance will directly support NOAA's objectives in areas like weather forecasting, climate research, and oceanographic monitoring. Conversely, any performance shortfalls, such as system downtime, data integrity issues, or security breaches, would directly impede NOAA's ability to achieve its mission goals.

What are the historical spending patterns for IT support services within NOAA or the Department of Commerce, and how does this contract fit within those trends?

Historical spending patterns within NOAA and the Department of Commerce for IT support services have generally shown a consistent and significant investment, reflecting the agencies' reliance on complex technological systems for their operations. There has been a noticeable trend across the federal government, including NOAA, towards modernizing IT infrastructure, migrating to cloud environments, and enhancing cybersecurity. This contract, focusing on system integration and cloud management, aligns directly with these modernization trends. It represents a continuation of investment in essential IT services, likely reflecting an effort to update or maintain capabilities crucial for NOAA's scientific and operational missions in the current digital landscape.

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: ACQ-NC1075-23-0012

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Parsons Corporation

Address: 5875 TRINITY PKWY STE 230, CENTREVILLE, VA, 20120

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

Financial Breakdown

Contract Ceiling: $28,639,335

Exercised Options: $28,639,335

Current Obligation: $28,639,335

Actual Outlays: $23,586,510

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $2,818,966

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QRAA19D000A

IDV Type: FSS

Timeline