Parsons Government Services Inc. awarded $1.5B for R&D services, spanning over 11 years

Contract Overview

Contract Amount: $1,499,977,355 ($1.5B)

Contractor: Parsons Government Services Inc.

Awarding Agency: Department of Transportation

Start Date: 2012-08-23

End Date: 2024-02-20

Contract Duration: 4,198 days

Daily Burn Rate: $357.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: THE CONTRACTOR MUST FURNISH ALL PROFESSIONAL, TECHNICAL AND SUPPORT LABOR, MATERIAL, SUPPLIES, MANAGEMENT SERVICES, DATA, AND FACILITIES REQUIRED TO ACCOMPLISH THE WORK TO BE ORDERED UNDER TECHNICAL F IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $1.50 billion to PARSONS GOVERNMENT SERVICES INC. for work described as: THE CONTRACTOR MUST FURNISH ALL PROFESSIONAL, TECHNICAL AND SUPPORT LABOR, MATERIAL, SUPPLIES, MANAGEMENT SERVICES, DATA, AND FACILITIES REQUIRED TO ACCOMPLISH THE WORK TO BE ORDERED UNDER TECHNICAL F IGF::OT::IGF Key points: 1. Contract value of $1.5 billion over 11 years suggests significant long-term investment in R&D. 2. Full and open competition indicates a broad market engagement, potentially leading to competitive pricing. 3. The contract type (Cost Plus Award Fee) allows for flexibility but requires robust oversight to manage costs and incentivize performance. 4. Performance period extending to February 2024 suggests ongoing and evolving research needs. 5. The R&D focus (NAICS 541712) places this contract within a critical sector for technological advancement. 6. The contract's significant duration and value may indicate a strategic, foundational role for Parsons in supporting FAA's research objectives.

Value Assessment

Rating: good

The contract's total value of $1.5 billion over more than a decade represents a substantial investment. Benchmarking this against similar large-scale R&D contracts is challenging without more specific service details. However, the Cost Plus Award Fee structure implies that pricing is tied to performance, which can be a good value if performance targets are met and costs are managed effectively. The absence of specific cost breakdowns makes a direct per-unit cost comparison difficult, but the overall scale suggests a significant commitment to the research objectives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This approach generally fosters a competitive environment, which can lead to better pricing and innovation. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition was sought. The agency's decision to use this method implies confidence in the market's ability to provide qualified offerors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through market forces. It ensures that the government isn't limited to a single provider, potentially driving down costs and improving service quality.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving advanced research and development services. This contract supports the development of new technologies and methodologies within the physical, engineering, and life sciences. The services delivered are crucial for advancing aviation safety, efficiency, and technological capabilities. While the geographic impact is primarily tied to the FAA's operational needs, the R&D outcomes can have national and international implications for air travel. The contract likely supports a workforce of scientists, engineers, and technical professionals within Parsons Government Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) contract type can lead to cost overruns if not managed with stringent oversight, as contractor incentives are tied to performance rather than strict cost control.
The long duration of the contract (over 11 years) presents a risk of scope creep or misalignment with evolving technological needs if not regularly reviewed and potentially re-competed or modified.
Lack of specific details on performance metrics and award fee criteria makes it difficult to assess the effectiveness of the incentive structure.
The broad nature of 'Research and Development in the Physical, Engineering, and Life Sciences' could lead to undefined or expanding requirements over time.

Positive Signals

Awarding under full and open competition suggests a competitive process that likely secured a qualified contractor at a reasonable price point.
The CPAF structure, when managed well, can incentivize high performance and innovation, leading to superior research outcomes.
The significant investment indicates a commitment by the FAA to critical R&D, potentially leading to substantial advancements in aviation technology.
The long-term nature of the contract allows for sustained focus and development, fostering deeper expertise and more impactful research.

Sector Analysis

This contract falls under the Research and Development (R&D) sector, specifically within NAICS code 541712. This sector is characterized by innovation, scientific inquiry, and the pursuit of new knowledge and applications. The market size for R&D services is substantial, with significant government investment driven by national security, technological advancement, and economic competitiveness. This contract with the FAA represents a significant portion of federal spending dedicated to advancing aviation-related technologies, fitting within the broader landscape of government-funded scientific and engineering research.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale R&D contract awarded through full and open competition, it is unlikely to have specific small business subcontracting goals mandated unless explicitly included in the contract terms. The primary focus appears to be on securing specialized R&D capabilities from a large contractor. This means the direct impact on the small business ecosystem may be limited, though subcontractors could potentially be engaged by Parsons Government Services Inc.

Oversight & Accountability

Oversight for this Cost Plus Award Fee contract would typically involve rigorous monitoring of performance against defined criteria and careful review of incurred costs. The FAA's contracting officers and technical representatives are responsible for ensuring that the contractor meets performance objectives and that award fees are justified. Transparency is facilitated through contract reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

FAA Research, Engineering, and Development
Department of Transportation R&D Contracts
Federal Aviation Research Programs
Advanced Technology Development Contracts
Scientific and Technical Services Contracts

Risk Flags

Long contract duration may lead to evolving requirements.
Cost Plus Award Fee structure requires diligent oversight to manage costs.
Broad R&D scope could lead to undefined requirements.
Performance metrics and award criteria not specified.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $1.50 billion to PARSONS GOVERNMENT SERVICES INC.. THE CONTRACTOR MUST FURNISH ALL PROFESSIONAL, TECHNICAL AND SUPPORT LABOR, MATERIAL, SUPPLIES, MANAGEMENT SERVICES, DATA, AND FACILITIES REQUIRED TO ACCOMPLISH THE WORK TO BE ORDERED UNDER TECHNICAL F IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is PARSONS GOVERNMENT SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $1.50 billion.

What is the period of performance?

Start: 2012-08-23. End: 2024-02-20.

What is the historical spending trend for this specific contract vehicle or similar R&D services provided by Parsons Government Services Inc. to the FAA?

Analyzing historical spending for this specific contract (awarded 2012-08-23, ending 2024-02-20) reveals a total obligated amount of $1,499,977,355.14. This represents a consistent and substantial investment over its 11-year duration. Without access to detailed annual obligation data, it's difficult to pinpoint specific spending trends year-over-year. However, the near-maximum obligation suggests sustained funding throughout the contract's life. Comparing this to other R&D contracts awarded by the FAA to Parsons or other large R&D providers would require a broader market analysis. Generally, large, long-term R&D contracts like this indicate a stable, strategic relationship where the agency relies on the contractor's expertise for ongoing research initiatives.

How does the per-unit cost or average annual cost of this contract compare to industry benchmarks for similar R&D services?

Determining a precise per-unit cost for this contract is challenging due to its nature as a broad R&D services agreement under a Cost Plus Award Fee structure. The contract covers a wide range of potential research activities (NAICS 541712) over more than 11 years, with a total value of approximately $1.5 billion. This averages to roughly $130 million per year. Benchmarking this requires detailed knowledge of the specific R&D tasks performed, labor categories, overhead rates, and profit margins, which are not publicly available. Industry benchmarks for large-scale, long-term government R&D contracts vary significantly based on specialization, complexity, and required expertise. Given the full and open competition and the long duration, the pricing is likely competitive within its specific domain, but direct comparisons are difficult without more granular data on the services rendered.

What are the key performance indicators (KPIs) and award fee criteria used to evaluate Parsons Government Services Inc.'s performance under this contract?

The specific Key Performance Indicators (KPIs) and award fee criteria for this Cost Plus Award Fee (CPAF) contract are not detailed in the provided data. Typically, for R&D contracts, KPIs would focus on milestones achieved, quality of research findings, adherence to project timelines, innovation demonstrated, and effective management of resources. Award fee criteria are designed to incentivize superior performance beyond basic requirements. The FAA contracting officer and technical team would assess performance against these pre-defined criteria to determine the amount of award fee earned. The absence of this information makes it difficult to quantitatively assess how well Parsons Government Services Inc. has been incentivized or has performed against expectations.

What specific types of R&D projects has Parsons Government Services Inc. undertaken for the FAA under this contract?

The contract specifies 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' under NAICS code 541712. While the broad category is defined, the specific projects undertaken by Parsons Government Services Inc. for the FAA under this contract are not detailed in the provided summary. Given the FAA's mission, these R&D efforts likely encompass areas such as air traffic management systems, aviation safety enhancements, new materials for aircraft, environmental impact reduction technologies, cybersecurity for aviation infrastructure, and advanced sensor technologies. The long duration and significant funding suggest a portfolio of evolving research projects rather than a single, static objective.

What is the track record of Parsons Government Services Inc. in delivering similar large-scale R&D contracts for federal agencies?

Parsons Government Services Inc. has a substantial track record in delivering large-scale engineering, construction, and technical services for various federal agencies, including defense and transportation sectors. While the provided data focuses on a single FAA contract, Parsons' broader portfolio includes complex R&D, infrastructure development, and program management. Their experience often involves high-value, long-term contracts requiring specialized technical expertise. Assessing their specific R&D performance requires reviewing past performance evaluations and contract awards across different agencies. Generally, companies of Parsons' size and scope are accustomed to the rigorous oversight and performance expectations associated with major federal R&D procurements.

What are the potential risks associated with the long duration (over 11 years) and cost-plus nature of this contract?

The long duration of this contract (over 11 years) presents several risks. Firstly, technological advancements or shifts in agency priorities could render the original research objectives obsolete or less relevant over time, potentially leading to inefficiencies or the need for costly contract modifications. Secondly, maintaining consistent oversight and performance management over such an extended period can be challenging for the government. The Cost Plus Award Fee (CPAF) structure introduces risks related to cost control; while it incentivizes performance, it can also lead to higher overall costs compared to fixed-price contracts if not managed diligently. There's a risk of 'cost-plus creep,' where costs escalate, and the award fee mechanism might not sufficiently mitigate this without robust government oversight and clearly defined, measurable performance metrics.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

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: $1,886,466,998

Exercised Options: $1,499,977,355

Current Obligation: $1,499,977,355

Actual Outlays: $747,076,907

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline