DoD's $96M contract with CAE USA INC. for technical services awarded without competition

Contract Overview

Contract Amount: $96,105,609 ($96.1M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2006-03-31

End Date: 2015-09-30

Contract Duration: 3,470 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $96.1 million to CAE USA INC. for work described as: Key points: 1. The contract's significant value raises questions about potential cost efficiencies missed due to the lack of competition. 2. The sole-source nature of this award limits opportunities for market-driven price discovery and innovation. 3. A long performance period of over 9 years suggests a sustained need for these services. 4. The absence of a small business set-aside indicates a focus on larger prime contractors. 5. The contract type (Cost No Fee) may offer flexibility but requires robust oversight to manage costs effectively. 6. The geographic concentration in Florida warrants analysis of regional economic impacts and workforce development.

Value Assessment

Rating: questionable

With a total value of $96.1 million over more than 9 years, this contract represents a substantial investment. Benchmarking the value for 'All Other Professional, Scientific, and Technical Services' is challenging without specific service details. However, the lack of competition means there's no direct market comparison to assess if the pricing was optimal. The 'Cost No Fee' contract type, while allowing for flexibility, necessitates careful monitoring to ensure costs remain reasonable and aligned with the value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or resources required for the service. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It also means that potential savings or innovative solutions from other qualified firms were not explored.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium compared to a competitively bid contract. Without competing offers, the government may not have secured the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are likely the Department of Defense, receiving specialized technical and scientific support. The services delivered are broadly categorized under 'All Other Professional, Scientific, and Technical Services,' implying a wide range of potential support functions. The contract's performance is concentrated in Florida, suggesting a localized economic impact and potential for workforce development within that state. The duration of the contract implies a long-term need for these specific services within the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of non-optimal pricing.
The 'Cost No Fee' contract type requires diligent oversight to control expenditures.
Limited transparency into the specific services provided makes value assessment difficult.

Positive Signals

The sustained award over nearly a decade indicates a consistent need and likely satisfactory performance.
The contractor, CAE USA INC., has a significant presence, suggesting established capabilities.
The contract's duration may reflect a strategic, long-term partnership for critical support.

Sector Analysis

This contract falls within the broad professional, scientific, and technical services sector, which is a significant component of federal spending. This sector encompasses a wide array of support functions critical to government operations, from research and development to specialized consulting and technical assistance. The market for these services is diverse, with many firms competing for government contracts. However, specific niches can be dominated by a few key players, potentially leading to sole-source awards if unique capabilities are required. Federal spending in this area often benchmarks against industry standards for similar services, but the complexity and specificity of government needs can create unique pricing dynamics.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary contractor, CAE USA INC., is expected to perform the majority of the work. The absence of small business considerations in this award means that opportunities for smaller firms to participate in this specific contract are limited, potentially impacting the broader small business ecosystem that relies on federal subcontracting opportunities.

Oversight & Accountability

The 'Cost No Fee' contract type necessitates robust oversight to ensure that costs incurred by the contractor are reasonable and allowable. The Department of Defense, through its contracting and management agencies, would be responsible for monitoring performance and expenditures. Transparency regarding the specific services rendered and the justification for costs would be crucial for accountability. While specific Inspector General (IG) jurisdiction isn't detailed, DoD IG offices typically have oversight over such contracts to investigate fraud, waste, and abuse.

Related Government Programs

Department of Defense Technical Services Contracts
Professional and Technical Services
Sole Source Procurements
Cost-Reimbursement Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus contract type requires diligent oversight.
Broad service category limits specific performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.1 million to CAE USA INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CAE USA INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $96.1 million.

What is the period of performance?

Start: 2006-03-31. End: 2015-09-30.

What specific technical, scientific, or professional services were provided under this contract?

The provided data categorizes this award under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' This is a broad classification that can encompass a wide range of activities, including research, development, consulting, and specialized support functions. Without more specific contract details or a Statement of Work (SOW), it is impossible to determine the exact nature of the services rendered. This lack of specificity makes it difficult to assess the contract's true value, relevance, and performance against defined objectives. Further investigation into contract line item numbers (CLINs) or task orders would be necessary to understand the precise deliverables and their impact.

How does the $96.1 million total award compare to similar sole-source contracts for technical services within the DoD?

Comparing this $96.1 million sole-source award to similar contracts requires access to a broader dataset of federal procurements, specifically those categorized under NAICS 541990 and awarded on a sole-source basis within the Department of Defense. Generally, sole-source contracts of this magnitude indicate a significant need for specialized capabilities that are either unique to the contractor or deemed essential and unavailable through competitive means. Without specific benchmarks for comparable services and contract types, it's difficult to definitively state if this represents a high or low value. However, the lack of competition inherently removes the price discovery mechanism that typically drives down costs in competitive environments, suggesting a potential for higher unit costs or overall expenditure compared to a competed contract.

What is the justification for awarding this contract on a sole-source basis, and were alternative sources considered?

The justification for a sole-source award typically falls under specific exceptions to full and open competition, such as the existence of only one responsible source, or a national emergency. For a contract valued at $96.1 million awarded in 2006, the initial justification would have been documented and approved by the contracting officer. Common reasons include unique technical expertise, proprietary technology, or the need for continuity of essential services. Without access to the contract's Justification and Approval (J&A) document, it's impossible to know the specific rationale. The absence of competition implies that either no other vendors were deemed capable, or the government determined that soliciting bids would not be in the public interest, which requires strong justification.

What are the potential risks associated with a 'Cost No Fee' contract of this duration and value?

A 'Cost No Fee' (Cost - Fixed Fee) contract, while offering flexibility in adapting to changing requirements, carries inherent risks, especially for a contract valued at $96.1 million and spanning over nine years. The primary risk is cost overrun, as the government bears the cost of performance plus a fixed fee, but the contractor is not incentivized to control costs beyond what is necessary to achieve the fixed fee. This structure requires stringent oversight and robust auditing to ensure that all costs are reasonable, allocable, and allowable. The long duration increases the potential for scope creep and the accumulation of costs over time. Without clear performance metrics and rigorous cost monitoring, the government could end up paying significantly more than anticipated for the services rendered.

How has spending on 'All Other Professional, Scientific, and Technical Services' by the DoD evolved since this contract's award in 2006?

Tracking the evolution of DoD spending on 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) since 2006 would reveal trends in the demand for such services. This category is broad, so overall spending increases or decreases might reflect shifts in defense priorities, technological advancements, or outsourcing strategies. For instance, periods of increased global engagement or major technological shifts might correlate with higher spending in this sector. Conversely, budget constraints or a push for in-house capabilities could lead to reduced spending. Analyzing this trend would provide context for the $96.1 million award, indicating whether it represents a typical investment or an outlier within the broader spending landscape for these types of services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc (UEI: 202131454)

Address: 2603 DISCOVERY DR, ORLANDO, FL, 32826

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: N6133901D0725

IDV Type: IDC

Timeline