DoD's $20.16M DEFCON AI contract awarded to Red Cell Partners, LLC for R&D

Contract Overview

Contract Amount: $20,157,982 ($20.2M)

Contractor: RED Cell Partners, LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2025-09-29

Contract Duration: 1,095 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: DEFCON AI, SBIR PHASE III

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to RED CELL PARTNERS, LLC for work described as: DEFCON AI, SBIR PHASE III Key points: 1. Contract awarded as a sole-source definitive contract, raising questions about competition. 2. Focus on Research and Development in Physical, Engineering, and Life Sciences. 3. Contract duration of 1095 days suggests a significant, long-term project. 4. Awarded by the Department of the Air Force, indicating a specific military need. 5. Firm Fixed Price contract type aims to control costs, but initial price needs benchmarking. 6. No small business set-aside, suggesting focus on larger, specialized firms.

Value Assessment

Rating: questionable

The contract's value of $20.16 million for R&D services requires careful benchmarking against similar projects within the Department of Defense. Without comparative data on the scope and deliverables of DEFCON AI, assessing value for money is difficult. The sole-source nature of the award also limits the ability to gauge competitive pricing. Further analysis of the specific R&D objectives and expected outcomes is needed to determine if the allocated funds represent a fair price for the anticipated technological advancements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The lack of competition means that price discovery through a bidding process was bypassed, potentially leading to higher costs for the government compared to a competed award. The justification for this sole-source award needs to be thoroughly reviewed.

Taxpayer Impact: Sole-source awards can limit taxpayer value by foregoing the cost-saving benefits of competitive bidding. This means taxpayers may not be getting the best possible price for the services rendered.

Public Impact

The primary beneficiaries are expected to be the Department of Defense, specifically the Department of the Air Force, through advancements in AI capabilities. The contract aims to deliver research and development outcomes in advanced physical, engineering, and life sciences, potentially leading to new technologies. The geographic impact is primarily within Illinois, where the contractor is located, but the technological advancements could have a global military application. Workforce implications may include specialized roles in AI research, engineering, and development, potentially creating high-skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the justification for sole-source award.
R&D contracts inherently carry risk of not achieving desired outcomes.
Specific performance metrics and deliverables are not detailed in the provided data.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Award to a specific entity (Red Cell Partners, LLC) suggests specialized expertise.
Long contract duration indicates a commitment to a significant project.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on advanced technologies like Artificial Intelligence. This is a critical area for defense modernization, with significant government investment. The market for AI R&D in defense is competitive, but specialized capabilities can lead to sole-source awards. Comparable spending benchmarks would involve analyzing other DoD contracts for AI development and advanced research, which often involve substantial funding due to the complexity and cutting-edge nature of the work.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses (sb: false) and the contractor is not identified as a small business (ss: false). This suggests the focus is on specialized capabilities likely held by larger, established firms. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in this significant R&D effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined by the contract's statement of work and performance metrics. Transparency is limited by the sole-source nature of the award and the proprietary aspects of R&D. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Artificial Intelligence Initiatives
Advanced Technology Development Contracts
SBIR Phase III Programs (as indicated in abbreviated data)

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
R&D project uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to RED CELL PARTNERS, LLC. DEFCON AI, SBIR PHASE III

Who is the contractor on this award?

The obligated recipient is RED CELL PARTNERS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $20.2 million.

What is the period of performance?

Start: 2022-09-30. End: 2025-09-29.

What is the specific technological focus and expected outcome of the DEFCON AI project?

The provided data indicates the contract is for 'DEFCON AI, SBIR PHASE III' and falls under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences). While the specific technological focus is not detailed, the 'DEFCON AI' designation strongly suggests a focus on artificial intelligence applications relevant to defense operations. SBIR Phase III contracts typically aim to transition technologies developed under the Small Business Innovation Research program into commercial or military products. Therefore, the expected outcome is likely the maturation and potential deployment of AI-driven solutions addressing specific defense challenges, such as intelligence analysis, command and control, or autonomous systems.

How does the $20.16 million contract value compare to similar R&D contracts for AI within the DoD?

Benchmarking the $20.16 million contract value requires access to a broader dataset of similar Department of Defense (DoD) Research and Development (R&D) contracts, particularly those focused on Artificial Intelligence (AI). AI R&D can vary significantly in cost based on complexity, scope, duration, and the specific technological domain (e.g., machine learning, computer vision, natural language processing). Contracts for foundational AI research might be smaller, while those for developing integrated AI systems for specific platforms or operational needs can easily reach tens or hundreds of millions of dollars. Without specific details on the deliverables and the maturity of the technology being developed under this DEFCON AI contract, a precise comparison is challenging. However, $20.16 million is a substantial investment, suggesting a significant R&D effort rather than exploratory research.

What is the justification for awarding this contract on a sole-source basis to Red Cell Partners, LLC?

Sole-source contract awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source capable of providing the required service or supply, or when urgency precludes a competitive process. For this DEFCON AI contract, the justification likely stems from Red Cell Partners, LLC possessing unique intellectual property, specialized expertise, or having previously developed foundational technology (potentially through SBIR programs) that makes them the only viable option. The 'SBIR PHASE III' designation in the abbreviated data is a strong indicator that this contract may be a follow-on to previous SBIR awards, where the contractor has already demonstrated capability and developed specific technology, thus limiting the pool of potential sources.

What are the potential risks associated with a sole-source R&D contract of this magnitude?

Sole-source R&D contracts of this magnitude carry several potential risks. Firstly, the lack of competition can lead to suboptimal pricing, meaning the government may pay more than it would in a competitive environment. Secondly, without the pressure of competing bids, there might be less incentive for the contractor to innovate aggressively or manage costs efficiently. Thirdly, R&D inherently involves uncertainty; the project may not yield the desired technological advancements or may face significant delays. Finally, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to public scrutiny or challenges if the justification is not robust.

How does this contract align with the Department of the Air Force's broader AI strategy and priorities?

The award of a $20.16 million contract for 'DEFCON AI' by the Department of the Air Force (DAF) strongly suggests alignment with the DAF's strategic priorities in artificial intelligence. The DAF, like other military branches, is heavily investing in AI to maintain technological superiority and enhance operational effectiveness across domains. AI is seen as critical for modernizing command and control, improving intelligence, surveillance, and reconnaissance (ISR), enabling autonomous systems, and enhancing cyber capabilities. This contract likely supports specific AI development goals outlined in the DAF's AI strategy, potentially focusing on areas like data analysis, decision support, or advanced simulation and training, contributing to the DAF's overall digital transformation and warfighting readiness.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3889 MAPLE AVE STE 500, DALLAS, TX, 75219

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,447,502

Exercised Options: $20,157,982

Current Obligation: $20,157,982

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline