DoD's $46.7M Satellite Tech Contract Awarded to Parsons Government Services Shows Mixed Value and Limited Competition

Contract Overview

Contract Amount: $46,760,831 ($46.8M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Defense

Start Date: 2017-12-08

End Date: 2022-12-08

Contract Duration: 1,826 days

Daily Burn Rate: $25.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SATELLITE TECHNOLOGY FOR OPERATIONAL MANAGEMENT (STORM)

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80919

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $46.8 million to PARSONS GOVERNMENT SERVICES INC. for work described as: SATELLITE TECHNOLOGY FOR OPERATIONAL MANAGEMENT (STORM) Key points: 1. The contract's value proposition appears fair, with a cost-plus-fixed-fee structure that incentivizes contractor efficiency. 2. Competition was limited, raising questions about optimal price discovery and potential for higher costs. 3. Performance risks are moderate, given the R&D nature of satellite technology development. 4. The contract duration of five years suggests a significant, long-term investment in this capability. 5. This contract positions the DoD to advance its operational management through satellite technology. 6. The lack of small business involvement warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The total award of $46.7 million over five years for satellite technology development represents a substantial investment. While the cost-plus-fixed-fee (CPFF) structure allows for flexibility in R&D, it also carries inherent risks of cost overruns if not managed tightly. Benchmarking this specific R&D effort against similar, highly specialized satellite technology contracts is challenging due to unique technical requirements. However, the overall spending level is consistent with significant defense modernization initiatives.

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 offers. However, the data shows only one award was made, which could imply that while the competition was open, the number of capable bidders was limited. This scenario can sometimes lead to less aggressive pricing than a multi-bidder scenario, though the CPFF structure aims to control costs.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it theoretically maximizes the pool of potential offerors, driving down prices. However, if only one or very few entities possess the highly specialized capabilities required, the benefit to taxpayers may be diminished.

Public Impact

The Department of Defense is the primary beneficiary, gaining enhanced capabilities in operational management through advanced satellite technology. Services delivered include research and development in physical, engineering, and life sciences related to satellite systems. The geographic impact is likely national, supporting defense operations across various theaters. Workforce implications may include specialized roles in aerospace engineering, software development, and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition, despite being full and open, could result in suboptimal pricing.
The CPFF contract type can lead to cost overruns if not rigorously monitored.
Lack of explicit small business set-aside or reported subcontracting data raises concerns about broader economic impact.

Positive Signals

Awarded under full and open competition, maximizing the potential bidder pool.
The contract duration of five years suggests a stable, long-term commitment to developing critical capabilities.
The specific NAICS code (541715) indicates a focus on advanced R&D, aligning with technological advancement goals.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This area is critical for defense modernization, enabling advancements in areas like intelligence, surveillance, reconnaissance, and command and control. Spending in this sector is often characterized by long development cycles, high technical risk, and significant investment. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of satellite technology, but R&D contracts of this magnitude are common within the DoD's strategic investment portfolio.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business entity. Without specific subcontracting plans or reported data, it is difficult to assess the extent to which small businesses will participate in fulfilling this contract. This could represent a missed opportunity to leverage the innovation and agility of the small business ecosystem within the defense technology sector.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (CPFF) necessitates close monitoring of costs and progress. Transparency is generally maintained through contract reporting mechanisms, though specific details of R&D progress may be subject to security classifications. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

DoD Satellite Modernization Programs
Advanced Reconnaissance Technology Development
Space-Based Command and Control Systems
National Reconnaissance Office (NRO) Contracts
Defense Advanced Research Projects Agency (DARPA) Projects

Risk Flags

Limited competition despite full and open solicitation.
Cost-plus-fixed-fee contract type carries inherent cost overrun risk.
Lack of explicit small business participation noted.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.8 million to PARSONS GOVERNMENT SERVICES INC.. SATELLITE TECHNOLOGY FOR OPERATIONAL MANAGEMENT (STORM)

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 $46.8 million.

What is the period of performance?

Start: 2017-12-08. End: 2022-12-08.

What is the track record of Parsons Government Services Inc. in delivering similar satellite technology R&D contracts for the Department of Defense?

Parsons Government Services Inc. has a significant history of supporting defense and intelligence agencies with complex technology solutions, including those related to space and satellite systems. While specific details on past satellite technology R&D contracts of this exact nature are proprietary, their broader portfolio includes systems engineering, integration, and technical support for various defense platforms. Their experience suggests a capability to handle the technical demands of the STORM contract. However, a deeper dive into past performance metrics, including on-time delivery, budget adherence, and technical success rates on comparable projects, would provide a more robust assessment of their track record for this specific R&D endeavor.

How does the awarded amount of $46.7 million compare to other R&D contracts for satellite technology within the DoD?

The $46.7 million award for the STORM contract is a substantial sum, indicative of a significant R&D effort. Within the DoD's vast R&D portfolio, this amount is moderate to significant, depending on the specific technological advancement targeted. Larger, more established satellite programs or foundational research initiatives can command hundreds of millions or even billions of dollars. Conversely, smaller, more focused research projects might be in the tens of millions. To provide a precise comparison, one would need to analyze the scope and technical maturity of other satellite R&D contracts awarded over similar periods, considering factors like system complexity, technological risk, and development phase.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for satellite technology R&D?

The primary risks associated with a CPFF contract for satellite technology R&D revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a defined profit margin, the cost-reimbursement aspect means the government bears the majority of the financial risk if development costs exceed estimates. This can lead to cost overruns if the contractor does not manage resources efficiently or if unforeseen technical challenges arise, which are common in R&D. Effective oversight is crucial to ensure the contractor maintains cost discipline and that the government is not unduly burdened by escalating expenses. The government's risk is mitigated by the contractor's incentive to complete the work within projected cost parameters to maximize their fee relative to effort.

What is the expected program effectiveness and impact of the Satellite Technology for Operational Management (STORM) contract?

The expected program effectiveness of the STORM contract hinges on its ability to deliver advanced satellite technologies that enhance the Department of Defense's operational management capabilities. This could translate to improved intelligence, surveillance, and reconnaissance (ISR) data, more resilient command and control (C2) networks, or enhanced situational awareness for deployed forces. The ultimate impact is expected to be a modernization of DoD's space-based assets, providing a strategic advantage. The success will be measured by the successful development, testing, and integration of these new technologies into existing operational frameworks, leading to tangible improvements in mission effectiveness and decision-making speed.

How has federal spending on satellite technology R&D evolved over the past five years, and where does this contract fit in?

Federal spending on satellite technology R&D has generally seen a consistent, and often increasing, trend over the past five years, driven by national security imperatives and the growing importance of space-based capabilities. Agencies like the DoD, NASA, and the NRO are major contributors to this spending. This $46.7 million contract fits within this broader trend as a specific investment aimed at advancing operational management through satellite technology. It represents a component of the larger strategic effort to maintain technological superiority in the space domain, complementing other investments in satellite acquisition, launch services, and ground systems.

What are the implications of awarding a definitive contract for R&D that spans five years?

Awarding a definitive contract for R&D that spans five years signifies a long-term commitment by the government to a specific technological development path. For the contractor, it provides a degree of stability and predictability, allowing for sustained investment in personnel and resources. For the R&D effort itself, a multi-year duration is often necessary to navigate the complexities, iterative processes, and potential setbacks inherent in developing cutting-edge technologies like those related to satellites. This extended timeline allows for thorough research, prototyping, testing, and refinement, increasing the likelihood of achieving the desired technological outcomes, although it also necessitates robust oversight to ensure continued alignment with evolving requirements and budget realities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

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

Financial Breakdown

Contract Ceiling: $48,960,194

Exercised Options: $48,960,194

Current Obligation: $46,760,831

Actual Outlays: $4,349,557

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $5,927,186

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline