I'm a contractor for a large research facility. The arrangement is almost exactly as you describe, but I am a W2 employee. They hire researchers with phds and such, while offloading all software work to contractors.
I took the job a year ago with the hope its name recognition would be helpful in the future but I had no idea there was such a stigma around contracting. I'm starting to look around again, so I guess I'll see how it effects me.
At my previous job, I worked on software and algorithms for degaussing systems, it's an interesting field. A fun fact, more modern systems are moving away from copper wire for deperming and towards high temperature super conductors. It's quite expensive and difficult to wrap modern ships with tons of copper wire, so the plan is the ceramic wire will alleviate that. I left the company, so I'm not sure where that tech left off.