DoD's $38.2M R&D contract with Parsons Government Services Inc. awarded via sole-source negotiation

Contract Overview

Contract Amount: $38,211,370 ($38.2M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Defense

Start Date: 2016-08-18

End Date: 2017-04-15

Contract Duration: 240 days

Daily Burn Rate: $159.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF DE LABOR SUPPORT

Place of Performance

Location: MADISON, MADISON County, ALABAMA, 35758

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $38.2 million to PARSONS GOVERNMENT SERVICES INC. for work described as: IGF::OT::IGF DE LABOR SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Research and Development focus aligns with specialized defense needs. 3. Contract duration of 240 days suggests a project-specific, short-term engagement. 4. Awarded by the Missile Defense Agency, indicating a focus on critical defense technologies. 5. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed tightly. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source R&D contract is challenging without comparable sole-source awards. The Cost Plus Fixed Fee structure, while common for R&D, carries inherent risks of cost escalation. The awarded amount of $38.2 million for a 240-day period requires careful scrutiny to ensure efficiency and prevent overpayment, especially given the lack of competitive pressure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source negotiation, meaning only one vendor, Parsons Government Services Inc., was considered. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. While sole-source awards can be justified for unique capabilities or urgent needs, they reduce transparency and limit the government's ability to secure the best possible value.

Taxpayer Impact: Taxpayers may not have received the most cost-effective solution due to the absence of competition. The lack of bidding means there was no market pressure to optimize pricing, potentially leading to a higher overall cost for the services rendered.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving specialized research and development services. The contract supports the advancement of physical, engineering, and life sciences research, specifically within the defense sector. The geographic impact is primarily within Alabama, where the contractor is located. Workforce implications include employment for specialized researchers and engineers at Parsons Government Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Cost Plus Fixed Fee structure can incentivize higher spending if not rigorously overseen.
Lack of small business participation may reduce broader economic impact.

Positive Signals

Award to an established contractor suggests potential for reliable execution.
Focus on R&D indicates investment in critical national security capabilities.
Specific NAICS code (541712) points to specialized technical expertise.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology) under NAICS code 541712. This is a critical area for defense modernization, involving innovation in areas like missile defense systems. The market for defense R&D is characterized by high barriers to entry, specialized expertise, and significant government investment. Comparable spending in this sector often involves large, complex projects requiring unique technological capabilities, where contracts can range from millions to billions of dollars.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. The absence of small business participation means that opportunities for smaller, specialized firms to contribute to this defense R&D effort were likely limited. This could impact the broader small business ecosystem within the defense contracting space, as larger prime contractors may absorb the entire scope of work.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Missile Defense Agency is responsible for ensuring performance and adherence to contract terms. As a sole-source award, transparency might be reduced compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Missile Defense Systems Research
Advanced Technology Development
Department of Defense Research Contracts
Cost Plus Fixed Fee Contracts
Sole Source Defense Procurements

Risk Flags

Sole-source award may limit competition and potentially increase costs.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.2 million to PARSONS GOVERNMENT SERVICES INC.. IGF::OT::IGF DE LABOR SUPPORT

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 (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $38.2 million.

What is the period of performance?

Start: 2016-08-18. End: 2017-04-15.

What is the track record of Parsons Government Services Inc. in performing similar sole-source R&D contracts for the Department of Defense?

Parsons Government Services Inc. has a significant history of performing various contracts with the U.S. government, including those within the Department of Defense. While specific data on their track record with sole-source R&D contracts of this exact nature is not detailed here, their overall presence suggests experience in complex technical services. A deeper dive into their past performance ratings, contract completion history, and any past performance issues or commendations related to similar sole-source R&D efforts would be necessary for a comprehensive assessment. This would involve reviewing contract databases and agency performance reports to gauge their reliability and effectiveness in delivering on similar sole-source R&D requirements.

How does the awarded amount of $38.2 million compare to the typical cost of similar R&D projects within the Missile Defense Agency?

Directly comparing the $38.2 million award for this specific 240-day R&D contract is difficult without access to detailed project scopes and market data for comparable sole-source awards. The Missile Defense Agency (MDA) undertakes a wide range of R&D initiatives, from component-level research to system integration, with costs varying significantly based on complexity, duration, and technological novelty. Given this contract's sole-source nature and Cost Plus Fixed Fee structure, a direct benchmark against competitively bid projects would be misleading. A thorough value assessment would require analyzing the specific deliverables, the uniqueness of the technology being developed, and potentially comparing it to internal MDA cost estimates or historical spending on projects with similar objectives, if such data were publicly available.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee contract for R&D, and how are they mitigated?

The primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for R&D include potential cost overruns and a lack of competitive pressure to ensure optimal value. Since the contractor is reimbursed for allowable costs plus a fixed fee, there's less incentive to control expenses compared to fixed-price contracts. The sole-source nature exacerbates this by removing the competitive dynamic that typically drives down prices. Mitigation strategies employed by the government often include rigorous oversight, detailed cost monitoring, defined performance metrics, and strong contract management. The agency must ensure that all costs incurred are reasonable, allocable, and necessary for the R&D effort, and that the fixed fee adequately compensates the contractor for the effort without being excessive. Clear statement of work and well-defined milestones are also crucial.

What specific R&D objectives does this contract aim to achieve for the Missile Defense Agency?

The provided data indicates the contract is for 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' under NAICS code 541712, awarded by the Missile Defense Agency (MDA). While the specific R&D objectives are not detailed in the summary data, the context of the MDA suggests the research likely pertains to advancing technologies critical for missile defense systems. This could encompass areas such as advanced materials, sensor technology, guidance systems, threat detection algorithms, or countermeasures. The 'Definitive Contract' award type and the 'Cost Plus Fixed Fee' pricing structure are common for exploratory or developmental research where the final scope and costs may evolve as the research progresses and new challenges or opportunities are identified.

What is the historical spending pattern for R&D contracts awarded by the Missile Defense Agency under similar circumstances (sole-source, CPFF)?

Analyzing historical spending patterns for sole-source, Cost Plus Fixed Fee (CPFF) R&D contracts by the Missile Defense Agency (MDA) requires access to comprehensive contract databases and spending reports. Generally, sole-source awards are less frequent than competed ones and are typically justified by unique capabilities or urgent needs. CPFF contracts are common in R&D due to the inherent uncertainties in research, allowing flexibility as the project evolves. Historical data might show that while the number of such contracts is lower, their average value could be substantial, reflecting the complexity and critical nature of MDA's mission. A detailed analysis would involve tracking the total dollar value, number of awards, and average contract duration for sole-source CPFF R&D contracts awarded by the MDA over several fiscal years to identify trends and patterns.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014716R0029

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Parsons Corporation

Address: 100 W WALNUT ST, PASADENA, CA, 91124

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

Financial Breakdown

Contract Ceiling: $41,443,926

Exercised Options: $41,443,926

Current Obligation: $38,211,370

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline