DoD's $108M engineering services contract for ground training phase awarded to CAE USA INC

Contract Overview

Contract Amount: $108,295,533 ($108.3M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2006-06-26

End Date: 2015-05-31

Contract Duration: 3,261 days

Daily Burn Rate: $33.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CIS, GROUND TRAINING PHASE

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $108.3 million to CAE USA INC. for work described as: CIS, GROUND TRAINING PHASE Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 3261 days (approx. 9 years) indicates a long-term need for these services. 3. The firm-fixed-price contract type helps manage cost certainty for the government. 4. The contract was awarded to a single vendor, CAE USA INC. 5. The North American Industry Classification System (NAICS) code 541330 points to engineering services. 6. The contract was awarded by the Department of the Navy, a component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The total award amount of over $108 million spread across nearly 9 years suggests a significant investment in engineering services. However, without details on the scope of work, deliverables, and quality of service, a definitive value-for-money assessment is difficult. The firm-fixed-price structure provides some cost control, but the overall efficiency and effectiveness of the spending depend heavily on the execution and outcomes achieved by CAE USA INC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought proposals from all responsible sources. This approach generally promotes a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The fact that it was competed openly suggests that the agency aimed to leverage market forces to secure favorable terms. However, the specific number of bids received is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it tends to drive down prices through market competition, ensuring that the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries of this contract are likely military personnel undergoing ground training, who will receive enhanced training capabilities. The services delivered are engineering services crucial for the development, maintenance, or enhancement of training systems and infrastructure. The geographic impact is centered around the Department of the Navy's training facilities, potentially in Oklahoma where the award notice indicates the state. Workforce implications may include the employment of engineers, technicians, and support staff by CAE USA INC. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the engineering services provided over the contract's long duration.
The significant duration of the contract (nearly 9 years) could lead to potential cost overruns if not managed meticulously, despite the fixed-price structure.
Without knowing the number of bidders, it's hard to confirm the extent of competition and its impact on pricing.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
The firm-fixed-price contract type provides cost predictability for the government.
The contract addresses a long-term need for engineering services, indicating strategic planning by the Department of the Navy.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by specialized expertise and is vital for supporting government and commercial operations, particularly in areas like defense, aerospace, and infrastructure development. The market for engineering services is competitive, with numerous firms offering a wide range of capabilities. Government contracts in this space often involve complex projects requiring significant technical proficiency and adherence to stringent quality and security standards.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The prime contractor, CAE USA INC., would be responsible for its own workforce and any necessary procurement of goods or services, which could potentially involve small businesses if deemed necessary for contract performance.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract. Accountability measures are embedded in the contract terms, performance reviews, and the potential for corrective actions if performance issues arise.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Engineering Services
Military Training Systems Development
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Long contract duration may lead to obsolescence or changing requirements.
Lack of detailed performance metrics hinders value assessment.
Single awardee for a significant duration could indicate limited market alternatives or potential for contractor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.3 million to CAE USA INC.. CIS, GROUND TRAINING PHASE

Who is the contractor on this award?

The obligated recipient is CAE USA INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $108.3 million.

What is the period of performance?

Start: 2006-06-26. End: 2015-05-31.

What specific engineering services were provided under this contract?

The contract data indicates the services relate to the 'CIS, GROUND TRAINING PHASE' and fall under NAICS code 541330 (Engineering Services). While the exact nature of the engineering services is not detailed in the provided data, it likely encompasses design, development, integration, testing, or sustainment of ground-based training systems and infrastructure for the Department of the Navy. This could include simulation technologies, virtual reality training environments, instructional system design, or the engineering support required to maintain and upgrade existing training facilities and equipment to ensure operational readiness and effectiveness for naval personnel.

How does the $108 million award compare to similar engineering services contracts for military training?

Comparing this $108 million contract to similar engineering services contracts for military training requires access to a broader dataset of historical contract awards. However, for a nearly 9-year duration (3261 days), this award amount suggests a substantial and long-term commitment to a specific training capability. Larger defense contracts for complex systems development or sustainment can easily reach hundreds of millions or even billions of dollars. This particular contract appears to be a significant, but not exceptionally large, investment within the defense sector for specialized engineering support related to ground training. Its value proposition is contingent on the criticality and scope of the training systems it supports.

What are the key risks associated with a long-duration, firm-fixed-price contract of this magnitude?

A primary risk with long-duration, firm-fixed-price contracts is the potential for scope creep or unforeseen technical challenges that can strain the contractor's ability to deliver within the fixed price, potentially leading to disputes or reduced quality. For the government, the risk lies in the possibility that the technology or training needs may evolve significantly over the 9-year period, rendering the contracted services less relevant or requiring costly modifications. Contractor performance degradation over time is also a risk, as is the potential for the contractor to become entrenched, reducing future competition. Effective program management, clear performance metrics, and robust oversight are crucial to mitigate these risks.

What is the track record of CAE USA INC. in delivering similar engineering services for the Department of Defense?

CAE USA INC. is a well-established defense contractor with a significant history of providing training and simulation solutions to military organizations, including the Department of Defense. They are known for their expertise in developing and integrating complex training systems, particularly in aviation and naval domains. While specific performance details for this particular contract are not provided, CAE USA INC.'s general track record suggests they possess the technical capabilities and experience necessary for such engineering services. However, a comprehensive assessment would require reviewing past performance evaluations and any documented issues or successes on previous DoD contracts.

How has historical spending on engineering services for ground training evolved within the Department of the Navy?

Historical spending on engineering services for ground training within the Department of the Navy has likely seen a trend towards increased complexity and technological integration. As military training evolves to incorporate more advanced simulation, virtual reality, and networked systems, the demand for specialized engineering expertise to develop, implement, and maintain these capabilities grows. Budgets for such services can fluctuate based on strategic priorities, technological advancements, and overall defense spending levels. Analyzing historical spending patterns would reveal shifts in investment towards specific training modalities and the underlying engineering support required.

What are the implications of this contract being awarded as a Delivery Order under a larger contract vehicle?

The data indicates this was awarded as a 'Delivery Order' (aw: DELIVERY ORDER). This implies that the $108 million contract is likely a task order issued against a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar contract vehicle. This approach allows the government to procure services incrementally as needed, providing flexibility. For taxpayers, it can offer better pricing if the underlying IDIQ contract was competitively awarded. However, it also means that the total spending under the parent contract could exceed this specific award amount. Oversight is crucial to ensure that individual delivery orders remain within the scope and intent of the original competitive award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 2200 ARLINGTON DOWNS ROAD, ARLINGTON, TX, 76011

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $120,250,702

Exercised Options: $108,338,912

Current Obligation: $108,295,533

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6133905D6007

IDV Type: IDC

Timeline