DoD awards $35.4M contract to Parsons Government Services for guided missile and space vehicle manufacturing

Contract Overview

Contract Amount: $35,399,230 ($35.4M)

Contractor: Parsons Government Services Inc

Awarding Agency: Department of Defense

Start Date: 2000-12-04

End Date: 2009-12-30

Contract Duration: 3,313 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Place of Performance

Location: LAKE FOREST, ORANGE County, CALIFORNIA, 92630

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to PARSONS GOVERNMENT SERVICES INC for work described as: Key points: 1. Contract value of $35.4M over 9 years suggests significant long-term investment in defense manufacturing capabilities. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. The contract type (Cost Plus Award Fee) incentivizes performance but requires careful oversight to manage costs. 4. The duration of 3313 days (approx. 9 years) points to a strategic, long-term need for these specialized services. 5. The contractor, Parsons Government Services Inc., has a substantial contract history with the federal government. 6. The specific NAICS code (336414) highlights a niche but critical area of defense industrial base.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the $35.4 million award over nearly nine years averages to approximately $4 million annually. This figure needs to be compared against the cost of similar services for guided missile and space vehicle manufacturing, which can vary widely based on complexity and technological requirements. The Cost Plus Award Fee structure means the final cost could be higher or lower than the initial estimate, depending on performance, making a definitive value assessment difficult at this stage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The presence of 3 bidders indicates a moderate level of competition for this specialized defense manufacturing requirement. While more than one bidder is positive, a higher number of competitors typically leads to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive environment, which can lead to better pricing and innovative solutions. However, the actual savings depend on the number of bids received and the government's negotiation strategy.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical components and services for guided missile and space vehicle programs. This contract supports the manufacturing and development of advanced defense technologies essential for national security. The contract's geographic impact is primarily linked to the contractor's facilities, likely within the United States, supporting domestic manufacturing. It implies a need for a skilled workforce in specialized engineering, manufacturing, and technical roles within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not managed diligently, as the government pays costs plus a fee that can be adjusted based on performance.
The long duration of the contract (over 9 years) increases the risk of scope creep or the need for contract modifications.
Reliance on a single contractor for such a critical defense manufacturing area could pose supply chain risks if the contractor faces operational issues.

Positive Signals

Awarding under full and open competition suggests a deliberate effort to ensure a competitive marketplace and potentially achieve best value.
The contractor, Parsons Government Services Inc., has a history of performing government contracts, indicating experience and established processes.
The Cost Plus Award Fee structure, while carrying risks, is designed to incentivize high performance and achieve specific program objectives.

Sector Analysis

The guided missile and space vehicle manufacturing sector is a highly specialized segment of the aerospace and defense industry. This contract falls under NAICS code 336414. The market is characterized by high barriers to entry due to technological complexity, stringent regulatory requirements, and significant capital investment. Spending in this sector is driven by national security priorities and technological advancements. Comparable spending benchmarks would typically be found within large defense procurement programs, where costs for similar systems can range from millions to billions of dollars depending on scale and sophistication.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were explicitly mandated within the provided data. This means that the prime contractor, Parsons Government Services Inc., has the discretion to subcontract portions of the work. While this offers flexibility, it also means that the direct impact on the small business ecosystem is not guaranteed unless the contractor actively seeks out and engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily be managed by the awarding agency, the Department of Defense, through its contract administration components, such as the Defense Contract Management Agency (DCMA). The Cost Plus Award Fee (CPAF) structure necessitates robust oversight to monitor costs, evaluate performance against award criteria, and ensure the contractor meets all contractual obligations. Transparency is typically maintained through regular reporting requirements from the contractor and agency oversight reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems Procurement
Space Systems Development Contracts
Advanced Weapons Manufacturing
Aerospace Component Production
Defense Industrial Base Sustainment

Risk Flags

Contract Duration Risk
Cost Overrun Potential (CPAF)
Performance Metric Definition Clarity
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to PARSONS GOVERNMENT SERVICES INC. See the official description on USAspending.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2000-12-04. End: 2009-12-30.

What is the historical performance record of Parsons Government Services Inc. on similar Cost Plus Award Fee contracts with the Department of Defense?

Assessing the historical performance of Parsons Government Services Inc. on similar Cost Plus Award Fee (CPAF) contracts requires a deep dive into their past performance evaluations and award data. CPAF contracts are common in defense procurement, incentivizing contractors to meet or exceed performance targets. Generally, Parsons Government Services has a significant track record with the federal government, undertaking complex projects across various domains. To evaluate their specific performance on CPAF contracts, one would look for metrics related to cost control, schedule adherence, technical achievement, and the frequency and magnitude of award fees received. A review of past performance questionnaires (PPQs) and contract data would reveal patterns of success or areas where they may have faced challenges. Without access to specific historical CPAF contract data for Parsons, a definitive assessment is not possible, but their longevity suggests a capacity to manage such complex agreements effectively.

How does the annual cost of this contract ($~4M/year) compare to industry benchmarks for guided missile and space vehicle manufacturing services?

The average annual cost of approximately $4 million for this contract requires careful benchmarking against industry standards for guided missile and space vehicle manufacturing. This sector is highly specialized, with costs heavily influenced by the specific technologies involved, the complexity of the components, research and development intensity, and production volumes. Benchmarking requires comparing this figure to the costs incurred by other government agencies or private sector entities for similar services, considering factors like the type of missiles or space vehicles, the stage of development (e.g., R&D vs. full-rate production), and the specific manufacturing processes employed. Given the high-tech nature and defense criticality, costs can fluctuate significantly. A direct comparison would necessitate access to detailed cost breakdowns and data on comparable contracts, which are often proprietary or classified. However, for context, major defense programs involving advanced missile systems can involve annual expenditures in the hundreds of millions or even billions.

What are the primary risks associated with the Cost Plus Award Fee (CPAF) contract type for this specific defense manufacturing requirement?

The primary risks associated with the Cost Plus Award Fee (CPAF) contract type for guided missile and space vehicle manufacturing revolve around cost control and performance definition. For the government, the risk is that costs could escalate beyond initial projections, even with the award fee incentive, if performance targets are poorly defined or if the contractor inflates costs. The 'cost plus' element means the government bears the cost risk. The 'award fee' component introduces subjectivity; defining objective and measurable performance criteria that accurately reflect the desired outcomes for complex manufacturing is challenging. If criteria are too vague, the contractor may receive higher fees without commensurate improvements in value. Conversely, if criteria are too stringent or unattainable, the incentive may be diminished. For the contractor, the risk lies in not achieving the performance targets necessary to earn the maximum award fee, potentially impacting profitability.

What is the projected impact of this contract on the overall defense industrial base, particularly concerning specialized manufacturing capabilities?

This contract is likely to have a positive impact on the defense industrial base by sustaining and potentially enhancing specialized manufacturing capabilities for guided missiles and space vehicles. Such long-term contracts provide a stable demand signal, encouraging investment in advanced manufacturing technologies, skilled labor, and supply chain resilience. By awarding this under full and open competition, the Department of Defense signals its commitment to leveraging a broad base of industry capabilities, potentially fostering innovation and competition among manufacturers. The duration of the contract suggests a strategic focus on maintaining or developing critical national security assets. This can help prevent erosion of specialized skills and infrastructure within the defense sector, ensuring the U.S. maintains a technological edge and readiness in these vital areas.

How has federal spending in the guided missile and space vehicle manufacturing sector (NAICS 336414) trended over the past decade, and how does this award fit into that trend?

Federal spending in the guided missile and space vehicle manufacturing sector (NAICS 336414) has historically been substantial, driven by national defense priorities and evolving technological requirements. Over the past decade, spending in this sector has likely seen fluctuations influenced by geopolitical events, budget cycles, and the introduction of new weapon systems and space exploration initiatives. While specific aggregate spending data for NAICS 336414 is not provided here, it is generally understood that this is a high-value, technology-intensive segment of the defense budget. This $35.4 million award, spread over approximately nine years, represents a consistent, albeit not massive, investment within this sector. It suggests a continued need for the specific capabilities provided by Parsons Government Services Inc., fitting into the broader trend of sustained federal investment in advanced defense manufacturing and space capabilities.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Parsons Corporation (UEI: 030866545)

Address: 23041 AVE DE LA CARLOTA,, LAGUNA HILLS, CA, 40

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline