Parsons Secures $21 Million Task Order to Advance NNSA Infrastructure

Rhea-AI Summary

Parsons Corporation (PSN) awarded $21 million task order by NNSA for design and construction management support at LANL, continuing its long-term construction management support to NNSA. The company is responsible for monitoring the design, construction, environmental, safety, health, and quality efforts on those projects and advising the federal government.

Market Research Analyst

Parsons Corporation's recent $21 million task order under the Enterprise Construction Management Services contract signifies a robust engagement with the National Nuclear Security Administration (NNSA). This development is noteworthy for investors as it represents a continuation and potential expansion of Parsons' existing relationship with the NNSA. The sizeable investment into Los Alamos National Laboratory (LANL) for capital line-item projects, exceeding $4 billion, underscores the long-term strategic value of this partnership.

From a market perspective, the three-year duration of the performance period provides a stable revenue outlook for Parsons in the medium term. This is particularly relevant given the current economic climate where long-term government contracts can mitigate market volatility and provide predictable cash flows. Furthermore, the specialized nature of the contract, involving project management and construction management in a high-stakes environment like national security, could position Parsons as a preferred vendor for future government contracts, potentially increasing their market share in this sector.

Financial Analyst

Assessing the financial implications of the $21 million task order for Parsons Corporation, one must consider the impact on the company's financial statements. The task order contributes to the company's backlog, a key indicator of future revenue. Given the contract's ceiling value of $160 million, there is room for additional task orders, which could further enhance revenue prospects.

In terms of profitability, the specialized nature of the services provided to the NNSA could command higher margins due to the complexity and security requirements. Investors should monitor the company's operating margin in subsequent quarters for any positive inflection attributable to this contract. It is also prudent to consider the capital expenditure and upfront costs associated with ramping up these projects and whether these will be offset by the contract's value over its term.

Legal Expert

The contract with NNSA requires Parsons to adhere to stringent federal regulations concerning environmental, safety, health and quality standards. Compliance with these regulations is not only critical for the successful execution of the contract but also has legal implications that could affect Parsons' operations and reputation. Non-compliance could lead to penalties, project delays, or even contract termination.

Investors should appreciate the importance of Parsons' expertise in navigating the complex legal landscape of federal contracts. The company's longstanding experience with the Department of Energy and its track record since 2012 in supporting NNSA's infrastructure projects suggest a competent understanding of the necessary legal requirements. This expertise potentially reduces legal risk exposure, which is a positive indicator for risk-averse investors.

CHANTILLY, Va., Jan. 08, 2024 (GLOBE NEWSWIRE) -- Parsons Corporation (NYSE: PSN) announced today that the company was awarded a $21 million task order by the National Nuclear Security Administration (NNSA) Office of Infrastructure. The task order, awarded through the $160 million ceiling-value Enterprise Construction Management Services contract, is for design and construction management support at Los Alamos National Laboratory (LANL) and has a three-year period of performance.

Under this task order, Parsons is providing project management, project control, and construction subject matter experts to the federal government for the more than $4 billion of capital line-item projects at LANL. The company is responsible for monitoring the design, construction, environmental, safety, health, and quality efforts on those projects and advising the federal government.

“Parsons has provided infrastructure and environmental solutions to the Department of Energy for more than seven decades, and this award continues our long-term construction management support to NNSA,” said Jon Moretta, president, Engineered Systems for Parsons. “We look forward to continuing to leverage our design and construction management expertise to further advance NNSA’s infrastructure.”

Parsons has provided services to NNSA since 2012, when the company was awarded the first ECMS contract, and has supported the LANL Project Management Office (PMO) since 2014. In June 2022, the company was awarded its third consecutive ECMS contract to continue its support of the LANL PMO.

To learn more about Parsons’ global infrastructure solutions, visit Parsons.com/infrastructure-capabilities.

About Parsons:
Parsons (NYSE: PSN) is a leading disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and intelligence, space and missile defense, transportation, environmental remediation, urban development, and critical infrastructure protection. Please visit parsons.com and follow us on LinkedIn and Facebook to learn how we're making an impact.

Forward-Looking Statements:
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of our addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. federal government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our Registration Statement on Form S-1 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

Media Contact:
Jonathan Larry
+1 706.832.7330
jonathan.larry@parsons.com

Investor Relations Contact:
Dave Spille
+1 703.775.6191
Dave.Spille@parsons.com

What contract was the task order awarded through?

The task order was awarded through the $160 million ceiling-value Enterprise Construction Management Services contract.

What is the period of performance for the task order?

The task order has a three-year period of performance.

What services is Parsons providing under the task order?

Parsons is providing project management, project control, and construction subject matter experts to the federal government for the more than $4 billion of capital line-item projects at LANL.

How long has Parsons been providing services to NNSA?

Parsons has provided services to NNSA since 2012, when the company was awarded the first ECMS contract.

What was Parsons awarded in June 2022?

In June 2022, the company was awarded its third consecutive ECMS contract to continue its support of the LANL PMO.