DoD's $30.3M IT contract to Parsons Government Services Inc. shows strong competition and fair value

Contract Overview

Contract Amount: $30,323,099 ($30.3M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-30

End Date: 2023-11-30

Contract Duration: 1,095 days

Daily Burn Rate: $27.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: GARDEM RESEARCH AND DEVELOPMENT

Place of Performance

Location: CENTREVILLE, FAIRFAX County, VIRGINIA, 20120

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to PARSONS GOVERNMENT SERVICES INC. for work described as: GARDEM RESEARCH AND DEVELOPMENT Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar custom computer programming services. 3. The contract duration of 1095 days suggests a need for sustained IT support. 4. Performance is managed by the Defense Contract Management Agency, a key oversight body. 5. The contract falls within the IT sector, specifically custom computer programming services. 6. No small business set-aside was utilized, but subcontracting opportunities may exist.

Value Assessment

Rating: good

The contract's total value of $30.3 million for custom computer programming services over three years appears reasonable. Benchmarking against similar contracts for IT services within the Department of Defense suggests that the pricing is within an acceptable range. The cost-plus-fixed-fee structure allows for flexibility while maintaining cost control, though it requires diligent oversight to ensure efficiency. The award amount of $27,692 for this specific delivery order is a component of the larger contract value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 3 bidders indicates a healthy level of competition for this requirement. This competitive environment generally leads to better price discovery and encourages contractors to offer their best value propositions to secure the award.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for the services rendered. The multiple bids received suggest that the pricing is likely market-driven and efficient.

Public Impact

The Department of Defense is the primary beneficiary, receiving custom computer programming services. These services likely support critical defense operations and IT infrastructure. The contract is geographically focused on Virginia, where the contractor is located. The contract supports skilled IT professionals within the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed tightly.
The specific details of the custom computer programming services are not fully elaborated, making a precise value assessment challenging.
Reliance on a single contractor for a significant duration may pose risks if performance issues arise.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential providers.
The contract is managed by a specialized agency (DCMA) for effective oversight.
The fixed-fee component provides a degree of cost certainty for the government.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under the North American Industry Classification System (NAICS) code 541511 for Custom Computer Programming Services. This is a significant and growing market within federal contracting, supporting a wide array of government functions. Comparable spending in this category often involves software development, system integration, and IT consulting, with contract values varying widely based on scope and duration.

Small Business Impact

This contract was not awarded as a small business set-aside, and the contractor, Parsons Government Services Inc., is a large business. While there is no explicit requirement for small business subcontracting mentioned in the provided data, large federal contractors often engage small businesses for specialized services or to meet broader subcontracting goals. Further investigation into the contractor's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Cost Plus Fixed Fee) necessitates close monitoring of costs and adherence to the fixed fee. Transparency is generally maintained through contract databases, but specific performance metrics and detailed spending breakdowns would require access to more granular government reporting.

Related Government Programs

Department of Defense IT Modernization Programs
Custom Software Development Contracts
IT Services for National Security
Defense Contract Management Agency Oversight

Risk Flags

Cost-plus-fixed-fee contract type requires diligent cost oversight.
Contract duration of 3 years may pose long-term vendor lock-in risks.
Limited public information on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to PARSONS GOVERNMENT SERVICES INC.. GARDEM RESEARCH AND DEVELOPMENT

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 $30.3 million.

What is the period of performance?

Start: 2020-11-30. End: 2023-11-30.

What is the track record of Parsons Government Services Inc. in delivering similar IT services to the federal government?

Parsons Government Services Inc. has a substantial history of contracting with the U.S. federal government, particularly within the Department of Defense and other agencies requiring complex IT and engineering solutions. Their track record typically includes large-scale system integration, software development, cybersecurity, and infrastructure support. While specific performance metrics for this particular contract are not detailed here, Parsons generally holds a reputation for undertaking significant government projects. Past performance reviews and contract award histories available through federal procurement data platforms would offer a more granular view of their success rates, any past issues, and their overall reliability in delivering complex IT services within budget and schedule constraints.

How does the awarded amount compare to the initial estimated value or ceiling of the contract?

The provided data indicates an 'award amount' (aw) of $27,692 for a specific delivery order, and a total contract value (a) of $30,323,098.55. Without knowing the initial ceiling or estimated value of the base contract or the specific delivery order, a direct comparison is difficult. However, the total value suggests this is a significant contract. The fact that it's a Cost Plus Fixed Fee (CPFF) contract implies that the final cost could fluctuate based on actual costs incurred, up to a certain limit. The delivery order amount being a small fraction of the total contract value suggests this is one of many orders placed against the contract over its duration.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

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 guaranteed profit margin, the 'cost plus' element means the government pays the contractor's allowable costs, which can be unpredictable. If the contractor is not efficient or if unforeseen technical challenges arise, the total cost to the government could exceed initial projections. This necessitates robust oversight from the contracting agency (in this case, DCMA) to scrutinize incurred costs, ensure they are reasonable and allocable, and prevent scope creep that inflates the cost base without commensurate value.

How effective is the Defense Contract Management Agency (DCMA) in overseeing contracts of this nature?

The Defense Contract Management Agency (DCMA) is specifically tasked with providing contract administration services for the Department of Defense and other federal agencies, including overseeing performance, payment, and compliance for complex contracts like this one. DCMA's effectiveness relies on its resources, expertise, and the specific contract clauses in place. For a CPFF contract, DCMA's role would involve auditing costs, monitoring progress, ensuring adherence to technical specifications, and managing any contract modifications. Their established processes and experienced personnel are generally considered effective in managing the risks inherent in such contracts, though the ultimate success always depends on the diligence of the assigned contract administrators and the cooperation of the contractor.

What is the historical spending trend for custom computer programming services within the Department of Defense?

Historical spending by the Department of Defense (DoD) on custom computer programming services (NAICS 541511) has been substantial and generally increasing over the years, reflecting the growing reliance on sophisticated IT systems for defense operations, intelligence, and administrative functions. The DoD consistently ranks as one of the largest federal buyers in this category. Spending trends are influenced by factors such as modernization initiatives, cybersecurity needs, the development of new defense platforms, and the outsourcing of IT functions. While specific annual figures fluctuate, the overall trajectory indicates a sustained and significant investment in this area to maintain technological superiority and operational effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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: FA875021R0503

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

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: $34,039,629

Exercised Options: $34,039,629

Current Obligation: $30,323,099

Actual Outlays: $1,999,953

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $4,295,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA875019D0004

IDV Type: IDC

Timeline