Parsons Government Services awarded $395M for R&D, with 2 bids received under full and open competition

Contract Overview

Contract Amount: $395,314,508 ($395.3M)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Defense

Start Date: 2017-04-16

End Date: 2023-03-15

Contract Duration: 2,159 days

Daily Burn Rate: $183.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF SYSTEMS ENGINEERING

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $395.3 million to PARSONS GOVERNMENT SERVICES INC. for work described as: IGF::OT::IGF SYSTEMS ENGINEERING Key points: 1. Contract awarded to a single vendor, indicating potential for limited competition. 2. Research and Development focus suggests innovation and future capability development. 3. Long contract duration of nearly 6 years implies significant project scope. 4. Cost-plus-fixed-fee structure may incentivize cost overruns. 5. High dollar value suggests a critical program for the Missile Defense Agency. 6. Performance period ending in March 2023 indicates recent completion or ongoing closeout.

Value Assessment

Rating: fair

The contract's value of $395 million over nearly six years for R&D services is substantial. Benchmarking this against similar large-scale R&D contracts within the defense sector is challenging without more specific service details. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost escalation compared to fixed-price contracts. The number of bids (2) suggests some level of competition, but the ultimate value for money depends heavily on the successful outcomes and innovations achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bids received. While two bidders indicate some level of market engagement, it is on the lower end for a contract of this magnitude. This suggests that the market for specialized R&D services in this area might be concentrated among a few key players, or that the solicitation requirements were highly specific, potentially limiting the pool of eligible bidders. The competition level may have influenced pricing, but without knowing the other bid details, it's difficult to definitively assess.

Taxpayer Impact: A limited number of bidders for a large contract means taxpayers may not have benefited from the most competitive pricing possible. While competition existed, it could have been more robust to drive down costs further.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving advanced research and development services. The contract supports the development of technologies crucial for national security and missile defense capabilities. Geographic impact is primarily concentrated in Alabama, where the contract was administered. Workforce implications include employment for highly skilled researchers, engineers, and technical staff within Parsons Government Services and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to higher costs if not managed tightly.
Limited competition (2 bidders) may have resulted in a higher price than a more competitive scenario.
The long duration of the contract could introduce risks related to technological obsolescence or changing requirements.

Positive Signals

Awarded under full and open competition, ensuring a broad initial solicitation.
Focus on R&D suggests investment in critical future defense capabilities.
Parsons Government Services is a known entity in the defense contracting space, implying some level of established capability.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. The defense R&D market is characterized by high specialization, significant government investment, and long development cycles. Comparable spending benchmarks would typically involve other large-scale R&D efforts within the Department of Defense, particularly those related to advanced weapon systems and defense technologies. The market size for such specialized R&D is substantial, driven by national security imperatives.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses and the prime contractor is a large entity. There is no explicit information on subcontracting plans for small businesses. This suggests that the bulk of the work was likely performed by the prime contractor or other large subcontractors, potentially limiting opportunities for small businesses in this specific contract's ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, with potential involvement from the Missile Defense Agency's Inspector General. Accountability measures are embedded in the contract's performance requirements and reporting obligations. Transparency is generally maintained through contract award databases and public reporting, though specific project details may be classified or sensitive.

Related Government Programs

Missile Defense Systems
Advanced Research and Development Programs
Department of Defense Research Contracts
Engineering Services Contracts

Risk Flags

Cost-plus contract type
Limited competition (2 bidders)
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $395.3 million to PARSONS GOVERNMENT SERVICES INC.. IGF::OT::IGF SYSTEMS ENGINEERING

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 $395.3 million.

What is the period of performance?

Start: 2017-04-16. End: 2023-03-15.

What specific R&D activities were undertaken under this contract?

The contract, awarded to Parsons Government Services Inc., focused on Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology), with the North American Industry Classification System (NAICS) code 541712. While the specific R&D activities are not detailed in the provided data, the context of the Missile Defense Agency (MDA) suggests that the work likely pertained to the development, testing, and integration of advanced technologies for missile defense systems. This could encompass areas such as sensor development, advanced materials, propulsion systems, guidance and control technologies, or system architecture improvements aimed at enhancing the effectiveness and survivability of U.S. missile defense capabilities.

How does the $395 million contract value compare to other R&D spending by the Missile Defense Agency?

The $395 million contract value represents a significant investment by the Missile Defense Agency (MDA). To provide a precise comparison, one would need to analyze the MDA's total R&D budget and the distribution of funds across various contracts over the contract's performance period (April 2017 to March 2023). However, as a single contract award of this magnitude, it likely represents a substantial portion of funding allocated to a specific, critical R&D initiative within the MDA. It suggests a high priority placed on the research objectives outlined in this contract, potentially related to a key component or system upgrade within the broader missile defense architecture.

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

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Parsons Government Services, present specific risks, particularly in R&D contexts. The primary risk is cost overrun; the government agrees to pay the contractor's actual costs plus a fixed fee, which incentivizes the contractor to incur costs to complete the work. If costs escalate beyond initial estimates, the total expenditure for the government can increase significantly. For R&D, where outcomes are inherently uncertain, this structure can be particularly risky as unforeseen technical challenges may drive up costs substantially. Effective oversight and robust cost controls are crucial to mitigate these risks and ensure value for taxpayer money.

Given only two bids, what does this imply about the contractor's track record and market position?

The fact that only two bids were received for this $395 million R&D contract suggests that the market for this specific type of specialized research and development may be concentrated among a limited number of highly capable firms. Parsons Government Services Inc. being one of the bidders, and presumably the awardee, indicates they possess the necessary expertise, security clearances, and infrastructure required by the Missile Defense Agency. This limited competition could imply that Parsons has a strong track record and established relationship with the MDA, making them a preferred or one of the few viable candidates. It also highlights the specialized nature of the work, potentially requiring unique skill sets or technologies not widely available.

How does the contract's duration (2159 days) impact its risk profile?

A contract duration of 2159 days (approximately 5.9 years) for a Research and Development project introduces several risk factors. Firstly, the extended timeline increases the potential for scope creep or evolving requirements as technology and strategic needs change over nearly six years. Secondly, there's a risk of technological obsolescence; the technologies being researched today might be outdated by the time the project concludes. Thirdly, maintaining consistent project focus and team continuity over such a long period can be challenging. Finally, the longer the contract, the greater the cumulative financial exposure for the government, necessitating rigorous ongoing oversight to ensure the project remains aligned with its objectives and delivers value.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014716R0009

Offers Received: 2

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: $542,601,675

Exercised Options: $411,185,963

Current Obligation: $395,314,508

Actual Outlays: $19,818,685

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $4,873,222

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline