Parsons Government Services awarded $36M for NTS-3 Ground Segment, a 7-year R&D contract

Contract Overview

Contract Amount: $35,973,850 ($36.0M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Defense

Start Date: 2017-06-22

End Date: 2024-09-30

Contract Duration: 2,657 days

Daily Burn Rate: $13.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF NTS-3 GROUND SEGMENT

Place of Performance

Location: CENTREVILLE, FAIRFAX County, VIRGINIA, 20120

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $36.0 million to PARSONS GOVERNMENT SERVICES INC. for work described as: IGF::OT::IGF NTS-3 GROUND SEGMENT Key points: 1. Contract value of $35.97M over 7 years suggests a moderate annual spend. 2. Competition was full and open after exclusion of sources, indicating a competitive process. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Performance period of 2657 days (approx. 7 years) allows for long-term project development. 5. The contract is categorized under Research and Development, aligning with innovation goals. 6. The primary contractor, Parsons Government Services Inc., has a significant presence in federal contracting.

Value Assessment

Rating: fair

The contract value of $35.97M over approximately 7 years averages to about $5.14M annually. Benchmarking this against similar R&D contracts in the physical and engineering sciences requires detailed market analysis, but the duration suggests a substantial, long-term project. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation if initial estimates are inaccurate or scope changes significantly. Without specific performance metrics or comparable contract data, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on pre-defined criteria. The number of bidders is not provided, but the 'full and open' designation generally suggests a competitive environment that should drive price discovery and potentially better value for the government.

Taxpayer Impact: The competitive nature of this award, despite potential source exclusions, suggests that taxpayers likely benefited from a process designed to solicit multiple proposals and achieve a reasonable price point.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving critical ground segment support for the NTS-3 program. Services delivered include research and development essential for advancing the NTS-3 mission. The geographic impact is primarily within Virginia, where the contract is managed or performed. Workforce implications include employment opportunities for scientists, engineers, and support staff involved in R&D.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type introduces risk of cost overruns if not closely monitored.
The 'after exclusion of sources' clause in the competition type warrants further investigation into the rationale for exclusions.
Long contract duration (7 years) requires sustained oversight to ensure continued alignment with program objectives and budget.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor efficiency and effectiveness.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The contract supports a significant Department of Defense program (NTS-3), indicating strategic importance.
Parsons Government Services Inc. is an established contractor with experience in complex government projects.
The contract duration allows for in-depth research and development, potentially leading to significant technological advancements.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for R&D services supporting defense and aerospace programs is substantial, with numerous firms competing for government contracts. This award to Parsons Government Services Inc. for the NTS-3 Ground Segment aligns with broader trends of outsourcing complex R&D functions to specialized contractors to leverage expertise and manage program costs.

Small Business Impact

The data indicates that small business participation (sb) was false, and there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses, and opportunities for small business subcontracting are not explicitly detailed in this summary. Further review of the contract's subcontracting plan would be necessary to understand the potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, with potential involvement from the Department of Defense's Inspector General. The CPFF contract type necessitates rigorous financial oversight to track costs and ensure adherence to the fixed fee. Transparency would be enhanced through regular reporting requirements mandated by the contract and public availability of contract award data.

Related Government Programs

NTS-3 Program
Department of Defense Research and Development Contracts
Air Force Satellite Programs
Ground Segment Development Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Potential for limited competition due to 'exclusion of sources' clause.
Long contract duration requires sustained oversight.
Lack of publicly available performance metrics hinders assessment.
No explicit small business set-aside or subcontracting details provided.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to PARSONS GOVERNMENT SERVICES INC.. IGF::OT::IGF NTS-3 GROUND SEGMENT

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $36.0 million.

What is the period of performance?

Start: 2017-06-22. End: 2024-09-30.

What is the historical spending pattern for the NTS-3 Ground Segment program with Parsons Government Services Inc.?

The provided data represents a single definitive contract awarded on 2017-06-22 with an end date of 2024-09-30, totaling $35,973,849.59. This suggests that this specific contract is the primary or sole vehicle for the NTS-3 Ground Segment work performed by Parsons Government Services Inc. within this timeframe. Without access to broader contract databases or historical procurement records for the NTS-3 program, it's difficult to ascertain if there were prior contracts or if this represents the entirety of the program's spending with this contractor. The duration and value indicate a significant, long-term investment in this specific R&D effort.

How does the annual cost of this contract compare to similar R&D contracts in the defense sector?

The annual cost for this contract averages approximately $5.14 million ($35.97M / 7 years). Benchmarking this against similar R&D contracts in the defense sector requires access to a comprehensive database of federal procurements, including contract type, scope, and duration. However, for a 7-year R&D effort supporting a major defense program like NTS-3, this annual spend is within a plausible range. Contracts for advanced research and development, especially those involving complex systems and long lead times, can vary widely. A more precise comparison would necessitate identifying contracts with similar North American Industry Classification System (NAICS) codes (like 541712) and similar agencies (like the Department of the Air Force).

What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?

The provided data summary does not include specific Key Performance Indicators (KPIs) or performance ratings for this contract. Contracts of this nature, particularly Cost Plus Fixed Fee (CPFF) R&D awards, typically include detailed performance metrics related to technical milestones, budget adherence, schedule compliance, and quality of deliverables. Assessing contractor performance would require access to contract performance reports, award fee determinations, or any formal evaluations conducted by the contracting agency. Without this information, it is impossible to evaluate how effectively Parsons Government Services Inc. has met the program's objectives.

What is the risk profile associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how is it managed?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development where the scope of work may evolve and precise cost estimation is difficult. The primary risk for the government is cost overrun, as the contractor is reimbursed for all allowable costs plus a fixed fee. The risk for the contractor is that their actual costs exceed the estimated costs, reducing their profit margin (the fixed fee). Effective management involves stringent cost monitoring, regular audits of incurred costs, clear definition and control of scope changes, and robust communication between the contractor and the government. The fixed fee incentivizes the contractor to control costs to some extent, but the government bears the majority of the cost risk.

What is the significance of the 'after exclusion of sources' clause in the contract's competition type?

The 'Full and Open Competition After Exclusion of Sources' clause indicates that while the competition was intended to be broad, certain potential sources were deliberately excluded. This exclusion must be justified based on specific criteria outlined in federal acquisition regulations, such as national security concerns, unique capabilities, or prior investments. The implication is that the competition was not entirely unrestricted, and the government had reasons for limiting the pool of eligible bidders. Understanding the rationale behind these exclusions is crucial for assessing the true level of competition and whether it potentially impacted price discovery or innovation.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,671,212

Exercised Options: $39,671,212

Current Obligation: $35,973,850

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $1,316,959

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline