DoD's $530M R&D contract with Defense Engineering Corp. awarded for physical sciences research

Contract Overview

Contract Amount: $5,302,027 ($5.3M)

Contractor: Defense Engineering Corp

Awarding Agency: Department of Defense

Start Date: 2020-08-14

End Date: 2026-03-30

Contract Duration: 2,054 days

Daily Burn Rate: $2.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RADERS

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45440

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $5.3 million to DEFENSE ENGINEERING CORP for work described as: RADERS Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risks. 3. Performance is in Ohio, indicating a specific geographic focus for this research. 4. The contract duration is over 2000 days, suggesting a long-term research and development effort. 5. The contractor, Defense Engineering Corp., is the sole awardee, highlighting their specific expertise or market position. 6. This contract falls under R&D in Physical, Engineering, and Life Sciences, a critical sector for technological advancement.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The fixed fee component provides some cost certainty, but the cost-reimbursement nature requires diligent oversight to ensure efficiency. Comparing it to similar R&D contracts in the physical sciences would require access to proprietary cost data and performance outcomes, which are not publicly available. The absence of specific performance metrics makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more competitive pricing for the government. The fact that only one award was made implies that Defense Engineering Corp. was the most advantageous offer, but the initial competition likely involved multiple interested parties.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation from a wider range of contractors.

Public Impact

This contract supports advancements in physical, engineering, and life sciences research, potentially leading to new technologies and capabilities for the Department of Defense. The research is being conducted in Ohio, potentially creating or sustaining high-skilled jobs in the region. The ultimate beneficiaries are expected to be national security and technological progress through the application of the research outcomes. The contract's focus on R&D suggests a long-term investment in future defense capabilities rather than immediate service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
The long duration of the contract increases the risk of scope creep or changing research priorities.
Limited public information on specific performance metrics makes it difficult to assess the contractor's efficiency.
The sole awardee status, while potentially indicating specialized expertise, could also suggest limited market competition for this specific niche.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible bidding process.
The fixed fee component provides a degree of cost predictability for the government.
The contract supports critical research and development in science and engineering.
The contractor is based in Ohio, potentially contributing to local economic development.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, excluding nanotechnology and biotechnology. This is a broad category encompassing fundamental and applied research aimed at scientific discovery and technological innovation. Spending in this sector is crucial for maintaining a technological edge, particularly in defense. Comparable spending benchmarks would typically be found within broader R&D budget allocations for agencies like the Department of Defense, which invest heavily in advancing scientific and engineering capabilities.

Small Business Impact

The data indicates that small business participation (sb) is false and that there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses, and large businesses were likely the primary participants in the competition. There is no information provided on subcontracting plans, so the extent to which small businesses might be involved as subcontractors remains unknown.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure that costs are reasonable and allocable, and that the fixed fee is earned appropriately. Transparency is limited by the nature of R&D contracts, but periodic reporting and reviews are standard. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research Initiatives
Engineering Services Contracts
Life Sciences Research Grants

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage cost risks.
Long contract duration increases potential for scope creep and changing requirements.
Sole awardee may indicate limited competition or specialized niche.
Lack of specific performance metrics hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.3 million to DEFENSE ENGINEERING CORP. RADERS

Who is the contractor on this award?

The obligated recipient is DEFENSE ENGINEERING CORP.

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 $5.3 million.

What is the period of performance?

Start: 2020-08-14. End: 2026-03-30.

What is the track record of Defense Engineering Corp. with government contracts, particularly R&D efforts?

Assessing the track record of Defense Engineering Corp. requires a review of their past performance on similar government contracts. Publicly available data often includes contract history, award values, and sometimes performance ratings. For R&D contracts, key indicators would be successful completion of research objectives, adherence to timelines and budgets, and the impact or applicability of the research outcomes. A deeper dive would involve examining contract close-out data, any reported disputes or terminations, and feedback from previous contracting officers. Without specific performance data for this contractor on prior R&D projects, it's difficult to definitively assess their reliability and expertise in this domain.

How does the awarded amount of $530 million compare to typical R&D contracts in the physical sciences for the Department of Defense?

The $530 million award is a substantial sum, indicative of a significant, long-term research and development effort. The Department of Defense consistently invests billions annually in R&D across various scientific disciplines. Contracts of this magnitude are not uncommon for major research initiatives, especially those involving complex engineering or advanced physical sciences. To provide a precise comparison, one would need to analyze the average award values for contracts with the NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences) awarded by the DoD over a specific period. Factors such as contract duration, scope of work, and the specific research area heavily influence award amounts, making direct comparisons challenging without granular data.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risks with a CPFF contract for R&D include potential cost overruns beyond the estimated cost, as the government bears the risk of actual costs incurred. There's also a risk that the contractor may not be sufficiently incentivized to control costs if the fixed fee is perceived as too high relative to the effort. Mitigation strategies involve robust government oversight, including detailed cost monitoring, regular audits, and thorough review of contractor expenditures. Clear definition of the scope of work and performance metrics is crucial. The fixed fee itself acts as a ceiling on the contractor's profit, providing some incentive for efficiency, but the government must actively manage the cost reimbursement aspect to ensure value for money.

What is the expected impact of this contract on the advancement of physical, engineering, and life sciences within the defense sector?

This contract is expected to contribute to the advancement of physical, engineering, and life sciences by funding critical research and development activities. The specific outcomes will depend on the research objectives, but potential impacts include the development of new materials, improved engineering designs, novel scientific understanding, or innovative technological solutions. For the defense sector, this could translate into enhanced military capabilities, improved operational effectiveness, or the creation of next-generation defense systems. The long duration suggests a focus on foundational or exploratory research that could yield significant, albeit potentially long-term, breakthroughs.

How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' category (NAICS 541715) trended over the past five years?

Federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' category (NAICS 541715) has generally shown a consistent upward trend over the past five years, reflecting a sustained commitment to scientific and technological advancement across various government agencies, particularly the Department of Defense, NASA, and the National Science Foundation. While specific year-over-year fluctuations occur due to budget cycles and shifting priorities, the overall trajectory indicates increasing investment in innovation. This growth is driven by national security imperatives, economic competitiveness goals, and the pursuit of solutions to complex societal challenges. Analyzing detailed spending reports from agencies like the Federal Procurement Data System (FPDS) would provide precise figures and trends.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 124 CHARTLEY CRT, BEAVERCREEK, OH, 45440

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,999,976

Exercised Options: $5,999,976

Current Obligation: $5,302,027

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline