DoD's $210M R&D contract with Cardinal Engineering, LLC awarded via full and open competition

Contract Overview

Contract Amount: $21,061,472 ($21.1M)

Contractor: Cardinal Engineering, LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-27

End Date: 2025-09-30

Contract Duration: 2,925 days

Daily Burn Rate: $7.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to CARDINAL ENGINEERING, LLC for work described as: IGF::CT::IGF Key points: 1. Contract awarded for R&D in physical, engineering, and life sciences. 2. Long-term contract duration of over 8 years suggests significant project scope. 3. Awarded as a Cost Plus Fixed Fee type, indicating potential for cost overruns. 4. No small business set-aside, raising questions about broader economic impact. 5. High number of bids (12) suggests strong market interest and potential for competitive pricing. 6. Contractor's performance and value will be key to assessing overall success.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns and performance metrics. CPFF contracts inherently carry risk as the government reimburses costs plus a fixed fee, which can incentivize cost escalation. Comparing this to similar R&D contracts in the physical, engineering, and life sciences sector would require access to granular data on project scope, deliverables, and contractor overhead. The fixed fee component, however, provides some level of cost predictability for the contractor's profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' with 12 bids received. This indicates a robust bidding process and suggests that the Department of Defense sought to maximize competition to obtain the best value. A high number of bidders generally leads to more competitive pricing and a wider pool of qualified contractors, increasing the likelihood of selecting a capable firm at a reasonable cost.

Taxpayer Impact: For taxpayers, full and open competition with multiple bidders typically translates to better price discovery and potentially lower overall costs compared to sole-source or limited competition awards. It ensures that public funds are being used efficiently by leveraging market forces.

Public Impact

Benefits the Department of Defense through advanced research and development in critical scientific and engineering fields. Services delivered likely involve complex research projects, potentially leading to technological advancements. Geographic impact is primarily within the District of Columbia, where the contractor is located. Workforce implications include employment opportunities for scientists, engineers, and support staff at Cardinal Engineering, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure may lead to cost overruns if not closely managed.
Long contract duration (over 8 years) increases the risk of scope creep or changing requirements.
Lack of specific performance metrics in the provided data makes it difficult to assess value for money upfront.
No small business set-aside means potential missed opportunities for small business growth and innovation.

Positive Signals

Awarded through full and open competition with 12 bidders, indicating strong market interest and competitive potential.
Contractor is based in the District of Columbia, potentially supporting local economic activity.
The NAICS code (541712) suggests a focus on specialized R&D, implying a need for advanced technical capabilities.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, excluding biotechnology. This is a critical area for national security and technological advancement. The market for such R&D services is highly specialized, often involving government contracts as a significant portion of revenue for specialized firms. Comparable spending benchmarks would depend on the specific sub-discipline of R&D, but significant government investment is typical in this domain.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. This means that the competition was open to all eligible businesses, including large corporations. While this maximizes competition, it may limit direct opportunities for small businesses to secure prime contract roles on this specific award. Subcontracting opportunities for small businesses could arise if Cardinal Engineering, LLC chooses to engage them, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is generally facilitated through contract award databases, though specific project details and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Federal Contracts for Scientific Research
Engineering Services Contracts
Physical Sciences Research Grants
Life Sciences Research Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Long contract duration increases potential for scope creep and requirement changes.
Lack of specific performance metrics makes upfront value assessment difficult.
No small business set-aside limits direct opportunities for small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to CARDINAL ENGINEERING, LLC. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is CARDINAL ENGINEERING, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $21.1 million.

What is the period of performance?

Start: 2017-09-27. End: 2025-09-30.

What is the historical spending pattern of Cardinal Engineering, LLC with the federal government?

Analyzing the historical spending of Cardinal Engineering, LLC requires access to federal procurement databases. Without direct access to this data, it's difficult to provide a precise historical spending pattern. However, the award of a $210 million contract by the Department of Defense suggests that the company has likely secured significant federal funding in the past, demonstrating a track record of winning and potentially executing large-scale government contracts. Further investigation into contract databases like FPDS or SAM.gov would reveal the volume, types, and agencies associated with their previous federal awards, offering insights into their experience and reliability.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of risk and value for R&D projects?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development (R&D) projects where the scope is not fully defined at the outset, making fixed-price contracts impractical. In a CPFF contract, the government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. This structure shifts some cost risk to the government, as it reimburses all legitimate costs incurred. However, the fixed fee provides the contractor with a predictable profit margin, incentivizing them to complete the work. Compared to fixed-price contracts, CPFF offers more flexibility for evolving R&D but can lead to higher costs if not managed diligently. Cost-reimbursement contracts without a fixed fee (e.g., Cost Plus Incentive Fee) might offer better value alignment if performance metrics are well-defined.

What are the key performance indicators (KPIs) typically used to evaluate R&D contracts of this nature?

Evaluating R&D contracts like this one typically involves a mix of technical, schedule, and cost-related Key Performance Indicators (KPIs). Technical KPIs might include the successful development of prototypes, achievement of specific scientific milestones, validation of research findings, or the number of patents filed. Schedule KPIs would focus on adherence to project timelines and delivery dates for research phases or reports. Cost KPIs would involve managing expenditures within the estimated budget and ensuring the efficient use of resources, especially given the CPFF structure. The ultimate success often hinges on the practical application or technological advancement resulting from the research, which can be a longer-term, qualitative assessment.

What is the typical profit margin (fixed fee) for CPFF contracts in the R&D sector?

The fixed fee in Cost Plus Fixed Fee (CPFF) contracts is negotiated and can vary based on several factors, including the complexity of the work, the perceived risk, the contractor's overhead structure, and prevailing market rates. For R&D contracts, profit margins (the fixed fee) typically range from 7% to 15% of the estimated cost. However, this can be influenced by specific agency policies, competition levels, and the strategic importance of the research. Without the specific fee negotiated for this $210 million contract, it's impossible to determine the exact profit margin. Government regulations often cap the fee to prevent excessive profits.

How does the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code compare to other R&D categories in terms of federal spending?

The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' represents a significant segment of federal R&D spending. Federal agencies, particularly the Department of Defense, Department of Energy, and National Science Foundation, invest heavily in these areas to drive innovation, enhance national security, and foster economic growth. While biotechnology (NAICS 541713) also receives substantial funding, the physical, engineering, and life sciences encompass a broad range of critical research, from materials science and advanced manufacturing to aerospace engineering and medical research. Overall federal R&D spending is substantial, with this category being a major contributor, reflecting its strategic importance across multiple government missions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except 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

Solicitation ID: N0002410R4215

Offers Received: 12

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 810 POTOMAC AVE. SE, SUITE 202, WASHINGTON, DC, 20003

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,278,467

Exercised Options: $21,278,467

Current Obligation: $21,061,472

Actual Outlays: $1,224,448

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline