DoD awards $15.6M R&D contract to Cutlass Systems Engineering for specialized research

Contract Overview

Contract Amount: $15,586,273 ($15.6M)

Contractor: Cutlass Systems Engineering LLC

Awarding Agency: Department of Defense

Start Date: 2023-10-26

End Date: 2025-10-25

Contract Duration: 730 days

Daily Burn Rate: $21.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BASE YEAR LABOR (PRICED)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20375

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to CUTLASS SYSTEMS ENGINEERING LLC for work described as: BASE YEAR LABOR (PRICED) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost control but also carries risk. 3. Base year labor costs are substantial, requiring careful monitoring of performance and efficiency. 4. The NAICS code 541715 indicates a focus on physical, engineering, and life sciences research. 5. The contract duration of 730 days allows for sustained effort on the research objectives. 6. The award was a Delivery Order, implying it's part of a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract or similar vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The base year labor cost of approximately $15.6 million for 730 days suggests a significant investment in specialized research personnel and resources. Comparing this to similar R&D contracts within the physical, engineering, and life sciences sector would be necessary to assess if the pricing is competitive. The fixed fee component needs to be evaluated against industry standards for similar research and development efforts to determine if it represents fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which indicates a competitive process was initiated, but specific sources may have been excluded based on certain criteria. The number of bidders is not provided, which limits the assessment of the competition's intensity. A robust competition typically leads to better price discovery and value for the government. The nature of the exclusion, if any, needs further clarification to fully understand its impact on the competitive landscape.

Taxpayer Impact: The use of full and open competition generally benefits taxpayers by fostering a market where multiple qualified contractors can bid, driving down costs and improving service quality. However, the exclusion of sources, if significant, could potentially limit the range of innovative solutions and competitive pricing available.

Public Impact

The Department of the Navy benefits from specialized research and development capabilities. This contract supports advancements in physical, engineering, and life sciences research. The geographic impact is primarily within the District of Columbia, where the contractor is located. The contract likely supports a workforce of specialized researchers and technical staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain reasonable and the fixed fee is justified.
The 'exclusion of sources' in the competition type warrants further investigation to ensure it did not unduly limit competition.
Lack of specific performance metrics makes it difficult to assess the efficiency and effectiveness of the research effort.
The substantial labor cost necessitates close monitoring of contractor performance and resource utilization.

Positive Signals

Awarded through a full and open competition process, indicating an effort to solicit broad market participation.
The contract is for research and development, which can lead to technological advancements and innovation.
The contractor, Cutlass Systems Engineering LLC, is likely specialized in the R&D domain specified by the NAICS code.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, specialized expertise, and often long-term projects. Government spending in R&D is crucial for national security, technological advancement, and economic competitiveness. Comparable spending benchmarks would involve analyzing other DoD R&D contracts awarded under similar NAICS codes and contract types to assess cost-effectiveness and market rates for specialized research services.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. As the contract is for specialized R&D, it is possible that larger, more specialized firms are the primary awardees. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this research effort.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring the contractor to justify costs and report on progress. Transparency is facilitated through contract award databases, but detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited transparency on the number of bidders and reasons for source exclusion.
Need for detailed performance metrics to assess R&D effectiveness.
Contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to CUTLASS SYSTEMS ENGINEERING LLC. BASE YEAR LABOR (PRICED)

Who is the contractor on this award?

The obligated recipient is CUTLASS SYSTEMS ENGINEERING LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2023-10-26. End: 2025-10-25.

What is the specific nature of the research being conducted under this contract?

The contract falls under NAICS code 541715, which covers Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology). While the specific research objectives are not detailed in the provided data, this classification suggests the work could involve areas such as advanced materials, aerospace engineering, environmental science, biomedical research, or other scientific and technical endeavors. The Department of the Navy likely has specific strategic goals or technological needs that this research aims to address, potentially related to naval operations, defense systems, or scientific understanding relevant to maritime environments.

How does the base year labor cost of approximately $15.6 million compare to similar R&D contracts?

Directly comparing the $15.6 million base year labor cost requires access to a comprehensive database of similar R&D contracts, including their scope, duration, and specific research areas. However, for a 730-day contract (2 years) focused on specialized physical, engineering, or life sciences R&D, this figure suggests a significant investment. It implies a substantial team of highly skilled researchers, engineers, and technicians, along with associated overhead and indirect costs. Without more granular data on the number of personnel, their labor rates, and the specific technical challenges, it's difficult to definitively benchmark this cost. However, R&D contracts, especially those requiring specialized expertise, can command high labor costs due to the intellectual capital involved.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts carry inherent risks for both the government and the contractor. For the government, the primary risk is that the contractor may not be sufficiently incentivized to control costs, as the government agrees to cover all allowable costs plus a predetermined fixed fee. This can lead to cost overruns if not managed diligently. There's also a risk that the contractor might prioritize profit (the fixed fee) over achieving the best possible technical outcome, especially if the scope is not clearly defined. For the contractor, the risk lies in underestimating the costs required to complete the work. If actual costs exceed the estimated costs, the fixed fee may not provide adequate profit, potentially leading to financial losses. Effective oversight, clear scope definition, and robust cost tracking are crucial to mitigate these risks.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the bidding process?

This contract clause indicates that the solicitation was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, 'after exclusion of sources' suggests that, for specific reasons outlined in the Federal Acquisition Regulation (FAR), certain potential offerors were excluded from consideration. This exclusion could be based on factors such as national security concerns, specific capabilities not being met, or other regulatory requirements. While the intent was open competition, the exclusion implies that the pool of bidders might have been narrower than in a purely unrestricted full and open competition. The justification for such exclusions is typically documented and subject to review.

What is the significance of the NAICS code 541715 for this contract?

The North American Industry Classification System (NAICS) code 541715 designates 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology).' This classification is significant because it defines the specific domain of scientific and technical expertise required for the contract. It signals that the work involves fundamental or applied research and experimental development intended to produce new or improved products, processes, or services. For the Department of the Navy, this code suggests the research is likely related to advancing technologies in areas such as materials science, propulsion, electronics, environmental engineering, or health sciences pertinent to naval applications.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 10041 BLUEBELL WAY, LAUREL, MD, 20723

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

Financial Breakdown

Contract Ceiling: $19,118,758

Exercised Options: $19,118,758

Current Obligation: $15,586,273

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017319D2001

IDV Type: IDC

Timeline