DoD Awards $176M for Ammonium Nitrate Tank Farm at Holston Army Plant, Construction Ends 2029
Contract Overview
Contract Amount: $176,032,926 ($176.0M)
Contractor: Parsons Government Services Inc
Awarding Agency: Department of Defense
Start Date: 2025-05-26
End Date: 2029-06-20
Contract Duration: 1,486 days
Daily Burn Rate: $118.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: NEW AMMONIUM NITRATE SOLUTION TANK FARM AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT TENNESSEE
Place of Performance
Location: KINGSPORT, SULLIVAN County, TENNESSEE, 37660
Plain-Language Summary
Department of Defense obligated $176.0 million to PARSONS GOVERNMENT SERVICES INC for work described as: NEW AMMONIUM NITRATE SOLUTION TANK FARM AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT TENNESSEE Key points: 1. Significant investment in critical infrastructure for munitions production. 2. Competition method is full and open, suggesting potential for competitive pricing. 3. Risk of construction delays and cost overruns inherent in large projects. 4. Industrial building construction sector is subject to material and labor cost fluctuations.
Value Assessment
Rating: good
The contract value of $176M for industrial building construction appears reasonable for a project of this scale and complexity. Benchmarking against similar large-scale industrial facility construction contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. This method allows all qualified contractors to bid, fostering a competitive environment that should drive down costs.
Taxpayer Impact: The firm fixed price contract type offers cost certainty to taxpayers, assuming the initial bid accurately reflects project requirements and risks.
Public Impact
Ensures continued domestic production capacity for essential munitions. Supports jobs in Kingsport, Tennessee, and related supply chains. Modernizes aging infrastructure at a key defense manufacturing site.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost escalation due to material price volatility.
- Risk of schedule delays impacting operational readiness.
- Dependency on a single contractor for project completion.
Positive Signals
- Full and open competition promotes competitive pricing.
- Firm fixed price contract provides cost certainty.
- Strategic investment in national defense infrastructure.
Sector Analysis
This contract falls within the industrial building construction sector, which can be subject to significant fluctuations in material costs (e.g., steel, concrete) and labor availability. Benchmarks for similar large-scale industrial facility construction projects are essential for evaluating cost-effectiveness.
Small Business Impact
The contract data indicates that small businesses were not directly awarded this contract, and there is no explicit mention of small business subcontracting goals. Further investigation into subcontracting opportunities would be needed to assess small business participation.
Oversight & Accountability
The Department of the Army, under the Department of Defense, is responsible for oversight. The firm fixed price contract type provides a degree of accountability for the contractor to deliver within the agreed-upon cost, but ongoing monitoring of progress and quality is crucial.
Related Government Programs
- Industrial Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to material price volatility.
- Risk of construction delays impacting project timeline.
- Dependency on contractor's ability to manage complex industrial construction.
- Ensuring long-term durability and safety of the tank farm.
Tags
industrial-building-construction, department-of-defense, tn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $176.0 million to PARSONS GOVERNMENT SERVICES INC. NEW AMMONIUM NITRATE SOLUTION TANK FARM AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT TENNESSEE
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 Army).
What is the total obligated amount?
The obligated amount is $176.0 million.
What is the period of performance?
Start: 2025-05-26. End: 2029-06-20.
What is the historical cost performance of Parsons Government Services Inc. on similar large-scale construction projects?
Assessing Parsons Government Services Inc.'s past performance on comparable projects is crucial for understanding their capability to manage this complex undertaking within budget and schedule. Reviewing their track record for cost overruns, delays, and quality issues on similar industrial construction contracts would provide valuable insight into potential risks and the likelihood of successful project completion.
How will potential fluctuations in construction material prices be managed under the firm fixed price contract?
Under a firm fixed price contract, the contractor generally assumes the risk of material price fluctuations. However, contract clauses may exist to address extraordinary market shifts. It's important to understand if any contingency mechanisms or price adjustment provisions are included to protect both the government and the contractor from unforeseen economic volatility impacting the project's overall cost.
What are the specific performance metrics and quality assurance measures in place to ensure the tank farm meets operational requirements?
Detailed performance metrics and robust quality assurance measures are vital for ensuring the new ammonium nitrate solution tank farm meets stringent operational and safety standards. The contract should outline specific technical requirements, inspection protocols, testing procedures, and acceptance criteria. Effective oversight will monitor adherence to these standards throughout construction and commissioning.
Industry Classification
NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9123623R4001
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Parsons Corporation
Address: 100 W. WALNUT STREET, SUITE C3, 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: $176,032,926
Exercised Options: $176,032,926
Current Obligation: $176,032,926
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2025-05-26
Current End Date: 2029-06-20
Potential End Date: 2029-06-20 00:00:00
Last Modified: 2025-06-20
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