DoD's $11.8M contract for Spectrum Sifter R&D awarded to North Point Defense Inc

Contract Overview

Contract Amount: $11,816,985 ($11.8M)

Contractor: North Point Defense Inc

Awarding Agency: Department of Defense

Start Date: 2022-09-16

End Date: 2028-01-14

Contract Duration: 1,946 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SPECTRUM SIFTER

Place of Performance

Location: ROME, ONEIDA County, NEW YORK, 13441

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to NORTH POINT DEFENSE INC for work described as: SPECTRUM SIFTER Key points: 1. Contract awarded via full and open competition, suggesting a competitive market. 2. North Point Defense Inc. is the sole awardee, indicating specialized capabilities. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed closely. 4. Performance period extends over 4 years, allowing for substantial project development. 5. The NAICS code 541715 points to research and development in physical sciences. 6. The contract is a definitive contract, typically used for complex or long-term projects.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables and market comparables for 'Spectrum Sifter' technology. The Cost Plus Fixed Fee structure means the government pays actual costs plus a negotiated fee, which can be less predictable than fixed-price contracts. However, it allows for flexibility in research where costs are uncertain. The total award value of $11.8 million over nearly 5 years suggests a moderate investment for specialized R&D.

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. With two bids received, the competition level appears limited, which could potentially impact price discovery. A higher number of bidders typically drives down costs more effectively.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers, the limited number of bids suggests that the government may not have achieved the most competitive pricing possible.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive advanced 'Spectrum Sifter' technology. The contract supports research and development in physical sciences, potentially leading to advancements in defense capabilities. The geographic impact is centered in New York, where North Point Defense Inc. is located. Workforce implications include specialized R&D roles within North Point Defense Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not rigorously monitored.
Limited competition (2 bids) may have resulted in a higher price than if more vendors had participated.
The specific nature of 'Spectrum Sifter' technology is not detailed, making it difficult to assess true value for money.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
The definitive contract type suggests a structured approach to a potentially complex R&D effort.
The extended performance period allows for thorough development and testing of the technology.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences. The market for specialized defense R&D is often characterized by a limited number of highly capable firms. Comparable spending benchmarks are difficult to establish without knowing the specific application of 'Spectrum Sifter,' but R&D contracts of this size are common within the defense industrial base.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless North Point Defense Inc. voluntarily engages small businesses as subcontractors.

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 tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance metrics. Transparency is generally maintained through contract award databases, though specific technical details of the R&D may be sensitive.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Advanced Technology Development
Spectrum Management Technologies
Signal Intelligence Research

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Limited competition (2 bids) may indicate suboptimal price discovery.
Lack of detailed technical specifications for 'Spectrum Sifter' hinders comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to NORTH POINT DEFENSE INC. SPECTRUM SIFTER

Who is the contractor on this award?

The obligated recipient is NORTH POINT DEFENSE INC.

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 $11.8 million.

What is the period of performance?

Start: 2022-09-16. End: 2028-01-14.

What is the specific nature and intended application of the 'Spectrum Sifter' technology being developed?

The provided data does not specify the exact nature or intended application of the 'Spectrum Sifter' technology. The NAICS code 541715 indicates it falls under 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology).' Given the awardee (North Point Defense Inc.) and the awarding agency (Department of the Air Force), it is highly probable that the technology relates to advanced defense applications, potentially involving signal intelligence, electronic warfare, spectrum monitoring, or communication systems. Further details would likely be found in classified or restricted program documentation.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar R&D efforts?

The Cost Plus Fixed Fee (CPFF) contract type is common for R&D where the scope of work is not fully defined or is expected to evolve. In CPFF, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set upfront, and Cost Plus Incentive Fee (CPIF) contracts, which include incentives for performance. For R&D, CPFF offers flexibility but requires robust government oversight to control costs, as the contractor has less incentive to minimize expenses compared to fixed-price arrangements. It's often chosen when technical uncertainties are high.

What is North Point Defense Inc.'s track record with similar government R&D contracts?

Without access to a comprehensive contractor performance database or specific details on North Point Defense Inc.'s past projects, it's difficult to definitively assess their track record for similar R&D contracts. However, being awarded a definitive contract by the Department of the Air Force suggests they possess the necessary technical capabilities and have likely met performance requirements on previous engagements. Further investigation into their contract history, past performance reviews (if publicly available), and financial stability would be needed for a thorough assessment.

What are the potential risks associated with the limited competition (2 bids) for this contract?

The primary risk associated with limited competition, such as the two bids received for this contract, is the potential for reduced price competition. When fewer vendors participate, the government may not achieve the most favorable pricing, potentially leading to higher costs for taxpayers. Additionally, limited competition can sometimes indicate barriers to entry for other qualified firms or a lack of market awareness. This could also suggest that the specific technology or service required is highly specialized, with only a few companies possessing the necessary expertise.

How does the $11.8 million award value compare to typical R&D spending in the physical sciences sector for the DoD?

The $11.8 million award value for this R&D contract is within a common range for specialized research projects within the Department of Defense. The DoD invests billions annually in R&D across various scientific disciplines. While this specific amount is significant for a single contract, it represents a fraction of the overall defense R&D budget. Its 'fair' value assessment depends heavily on the criticality and potential impact of the 'Spectrum Sifter' technology. Without broader market data on comparable R&D efforts in niche areas like advanced spectrum management, a precise benchmark is elusive.

What oversight mechanisms are in place to ensure the effective use of funds in this Cost Plus Fixed Fee contract?

Oversight for a Cost Plus Fixed Fee contract typically involves rigorous monitoring of the contractor's incurred costs, progress reports, and adherence to the Statement of Work (SOW). The contracting officer and program managers are responsible for reviewing expenditures, ensuring they are allowable, allocable, and reasonable. Milestones and deliverables are tracked to ensure progress aligns with the fixed fee earned. Audits by agencies like the Defense Contract Audit Agency (DCAA) may also be employed to verify cost data. The fixed fee itself provides a ceiling on the contractor's profit, incentivizing efficient performance within the agreed-upon cost structure.

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: TWO STEP

Solicitation ID: FA875021S7002

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 184 BROOKS RD STE 101, ROME, NY, 13441

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

Financial Breakdown

Contract Ceiling: $15,962,643

Exercised Options: $15,962,643

Current Obligation: $11,816,985

Actual Outlays: $8,555

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $829,103

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline