DoD Awards $1.1B Missile Defense Systems Engineering Contract to Parsons
Contract Overview
Contract Amount: $1,107,379,176 ($1.1B)
Contractor: Parsons Government Services Inc.
Awarding Agency: Department of Defense
Start Date: 2021-07-16
End Date: 2029-01-15
Contract Duration: 2,740 days
Daily Burn Rate: $404.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: EO14042 TEAMS-NEXT MISSILE DEFENSE SYSTEMS ENGINEERING
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $1.11 billion to PARSONS GOVERNMENT SERVICES INC. for work described as: EO14042 TEAMS-NEXT MISSILE DEFENSE SYSTEMS ENGINEERING Key points: 1. Parsons Government Services Inc. secured a significant contract for missile defense systems engineering. 2. The contract falls under Research and Development in Physical, Engineering, and Life Sciences. 3. Awarded via full and open competition, indicating a competitive bidding process. 4. The contract duration is substantial, spanning over 7 years, suggesting long-term program needs. 5. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully.
Value Assessment
Rating: good
The contract value of $1.1 billion over approximately 7.5 years suggests a significant investment in critical defense capabilities. Benchmarking against similar large-scale R&D contracts in defense engineering is challenging due to unique system requirements, but the value appears commensurate with the scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, which generally promotes competitive pricing and ensures the government receives the best value. This method allows all eligible contractors to bid, fostering a robust price discovery process.
Taxpayer Impact: Full and open competition aims to maximize taxpayer value by ensuring fair pricing and access to the most capable providers for complex defense systems.
Public Impact
Enhances national security through advanced missile defense capabilities. Supports technological innovation in a critical defense sector. Creates high-skilled jobs in research and development. Potential for spin-off technologies benefiting other industries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractor spending without strict cost controls.
- Long contract duration increases exposure to potential scope creep and evolving requirements.
- Missile defense systems are highly complex and subject to technological obsolescence.
- Sole reliance on one contractor for critical systems can pose supply chain risks.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Parsons is a well-established government contractor with relevant expertise.
- Contract supports a critical national security mission.
- Long-term contract provides stability for program development.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced physical and engineering sciences for missile defense. Spending in this area is crucial for maintaining technological superiority and national security, often involving significant investment due to the complexity and cutting-edge nature of the work.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). While large prime contractors often subcontract to small businesses, this specific award does not directly benefit them. Further analysis would be needed to determine the extent of small business participation through subcontracting.
Oversight & Accountability
The Department of Defense and the Missile Defense Agency are responsible for overseeing this contract. Given the contract type (CPFF) and long duration, robust oversight is crucial to manage costs, ensure performance, and prevent waste, fraud, and abuse.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Cost Plus Fixed Fee contract type can lead to higher costs if not managed effectively.
- Long contract duration increases risk of scope creep and evolving technological requirements.
- Complexity of missile defense systems presents inherent technical and integration challenges.
- Potential for contractor performance issues impacting critical national security capabilities.
- Lack of direct small business award may limit broader economic impact.
- Dependence on a single contractor for critical R&D could pose strategic risks.
Tags
research-and-development-in-the-physical, department-of-defense, al, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.11 billion to PARSONS GOVERNMENT SERVICES INC.. EO14042 TEAMS-NEXT MISSILE DEFENSE 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 $1.11 billion.
What is the period of performance?
Start: 2021-07-16. End: 2029-01-15.
What is the projected return on investment for this missile defense system development, considering the significant R&D expenditure?
Quantifying the ROI for R&D in advanced defense systems is complex, as value is often measured in terms of threat deterrence and national security rather than direct financial returns. The investment aims to mitigate catastrophic risks, making the 'return' the prevention of loss. Metrics might include threat assessment reduction, improved response times, and technological superiority, which are difficult to monetize but critical for strategic advantage.
What are the specific performance metrics and milestones used to assess the effectiveness of the missile defense systems being developed under this contract?
Performance metrics likely include successful interception rates against various threat simulations, system reliability under stress, integration capabilities with existing defense networks, and adherence to stringent technical specifications. Milestones would involve phased development, testing, and validation stages, with penalties or incentives tied to meeting these targets. The Missile Defense Agency would establish these based on operational requirements and threat assessments.
How does the Cost Plus Fixed Fee structure incentivize Parsons to control costs and deliver the most efficient solution for missile defense?
The CPFF structure provides Parsons with reimbursement for allowable costs plus a predetermined fixed fee. While the fee is fixed, the incentive to control costs is primarily driven by the desire for future contracts and maintaining a good reputation. However, this structure can sometimes lead to less aggressive cost management compared to fixed-price contracts, necessitating strong government oversight to ensure efficiency and prevent cost overruns.
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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ085820R0014
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: $2,281,871,061
Exercised Options: $1,234,370,752
Current Obligation: $1,107,379,176
Actual Outlays: $393,028,067
Subaward Activity
Number of Subawards: 151
Total Subaward Amount: $1,249,367,828
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-07-16
Current End Date: 2029-01-15
Potential End Date: 2029-01-15 00:00:00
Last Modified: 2026-01-14
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