DoD awards $36M for aircraft retardant delivery systems, with 4 bidders competing

Contract Overview

Contract Amount: $36,099,604 ($36.1M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2020-02-27

End Date: 2024-05-30

Contract Duration: 1,554 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DESIGN, ENGINEERING, DEVELOPMENT, MANUFACTURE, AND INSTALL OF RETARDANT DELIVERY SYSTEM (RDS)

Plain-Language Summary

Department of Defense obligated $36.1 million to CANADIAN COMMERCIAL CORPORATION for work described as: DESIGN, ENGINEERING, DEVELOPMENT, MANUFACTURE, AND INSTALL OF RETARDANT DELIVERY SYSTEM (RDS) Key points: 1. The contract value appears reasonable given the scope of design, engineering, development, manufacture, and installation. 2. Full and open competition suggests a healthy market for these specialized systems. 3. The firm fixed-price contract type shifts performance risk to the contractor. 4. The contract duration of over 4 years indicates a significant, long-term requirement. 5. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, a specialized sector.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific details on the retardant delivery system's capabilities and complexity. However, the $36 million award over approximately four years for design, engineering, development, manufacture, and installation suggests a substantial investment. The firm fixed-price nature indicates that the contractor bears the cost risk, which can be favorable for the government if managed effectively. Comparing this to other specialized aircraft system development contracts would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive, indicating that multiple capable vendors were interested and able to bid on the requirement. The presence of four bidders suggests a reasonably competitive market for this type of specialized defense system, which should contribute to price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government is not limited to a single source, potentially leading to cost savings.

Public Impact

The Department of Defense is the primary beneficiary, acquiring critical systems for its aircraft. Services delivered include design, engineering, development, manufacturing, and installation of retardant delivery systems. The geographic impact is likely global, supporting DoD operations wherever aircraft are deployed. Workforce implications include skilled labor in aerospace engineering, manufacturing, and technical installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if development proves more complex than anticipated, despite fixed-price terms.
Ensuring timely delivery and integration of the system across various aircraft platforms could pose logistical challenges.
The specialized nature of the technology may limit future upgradeability or interoperability with evolving systems.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Full and open competition with four bidders suggests a robust market and competitive pricing.
The contractor, Canadian Commercial Corporation, has experience in facilitating defense procurements.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components and systems. The market for specialized defense equipment is often characterized by high barriers to entry due to technological complexity, stringent quality requirements, and long development cycles. Spending in this area is driven by military modernization efforts and the need for advanced capabilities. Comparable spending benchmarks would typically involve other large-scale aircraft system development and manufacturing contracts within the defense industry.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. The prime contractor is the Canadian Commercial Corporation, which is a government agency facilitating international trade. The absence of small business set-asides suggests that the primary focus was on large-scale capabilities, and the impact on the small business ecosystem would depend on whether any of the bidders or their supply chains include small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price contract type provides a degree of accountability by linking payment to delivery and performance. Transparency would be enhanced through contract award databases and reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Aerospace Systems Development
Specialized Military Equipment

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for scope creep or requirement changes during extended development.
Ensuring contractor performance stability over a multi-year period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.1 million to CANADIAN COMMERCIAL CORPORATION. DESIGN, ENGINEERING, DEVELOPMENT, MANUFACTURE, AND INSTALL OF RETARDANT DELIVERY SYSTEM (RDS)

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.1 million.

What is the period of performance?

Start: 2020-02-27. End: 2024-05-30.

What is the specific capability and intended use of the retardant delivery system (RDS)?

The provided data does not specify the exact capability or intended use of the retardant delivery system (RDS) beyond its general function. However, given the Department of Defense (DoD) context and the NAICS code for Aircraft Manufacturing, it is highly probable that this system is designed for aerial firefighting operations or potentially for other specialized dispersal applications from military aircraft. Aerial firefighting systems typically involve tanks, pumps, and nozzles to deliver water or fire retardant chemicals over large areas. The 'design, engineering, development, manufacture, and installation' scope suggests a comprehensive effort to create a new or significantly upgraded system, implying a need for advanced features, specific performance metrics, or integration with particular aircraft platforms used by the DoD.

How does the $36 million contract value compare to similar aircraft system development contracts?

Direct comparison of the $36 million contract value to similar aircraft system development contracts is difficult without more granular data on the specific system's complexity, technological innovation, and the scope of work. However, for a comprehensive effort involving design, engineering, development, manufacturing, and installation of a specialized system over a period of approximately four years, $36 million appears to be within a reasonable range for defense contracts. Large-scale aircraft system development can easily run into tens or hundreds of millions of dollars. The fact that it was competed among four bidders suggests that the market perceived the value and scope as achievable within this budget. Further analysis would require benchmarking against contracts for similar functionalities, such as other aerial delivery systems, specialized pod development, or aircraft modification kits.

What are the key performance indicators (KPIs) or success metrics for this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or success metrics for this contract. However, typical KPIs for a contract involving the design, engineering, development, manufacture, and installation of a specialized system like a retardant delivery system would likely include: 1. System performance: Effectiveness in delivering retardant (e.g., coverage area, drop accuracy, flow rate). 2. Reliability and Durability: Mean Time Between Failures (MTBF), operational lifespan, resistance to environmental factors. 3. Integration: Successful integration with specified aircraft platforms, including weight, balance, and power requirements. 4. Schedule adherence: Meeting key development milestones and final delivery dates. 5. Cost control: Adherence to the firm fixed-price budget. 6. Safety: Compliance with all relevant safety standards during development and operation. These metrics would be detailed in the contract's Statement of Work (SOW) and performance specifications.

What is the track record of the Canadian Commercial Corporation (CCC) in managing similar defense contracts?

The Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates international trade for Canadian companies, particularly in the defense sector. CCC acts as a contracting agent, leveraging its expertise to help Canadian businesses secure contracts with foreign governments, including the U.S. Department of Defense. While CCC itself is not typically the manufacturer or developer, it has a long track record of successfully managing complex defense procurements and ensuring compliance with international contracting standards. Its role is to provide a secure and reliable contracting vehicle, manage payments, and ensure adherence to contract terms. Therefore, its track record in managing such contracts is generally strong, focusing on the administrative, legal, and financial aspects of the procurement process, rather than the technical development itself.

What are the potential risks associated with the long contract duration (1554 days)?

The contract duration of 1554 days (approximately 4.25 years) presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape, especially in defense, can evolve rapidly, potentially making the developed system outdated before or shortly after deployment. Secondly, there's a risk of scope creep or requirement changes during the extended development period. While a firm fixed-price contract aims to mitigate cost impacts, managing changes can still lead to disputes or delays. Thirdly, contractor performance stability over such a long period can be a factor; key personnel may leave, or the contractor's financial health could change. Finally, market conditions or geopolitical factors could shift, impacting the necessity or deployment strategy of the system, although the firm fixed-price nature offers some protection against immediate cost increases due to external market fluctuations.

How does the firm fixed-price (FFP) contract type impact risk and cost for the DoD?

The Firm Fixed-Price (FFP) contract type places the majority of the cost risk on the contractor. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the DoD, this offers significant cost certainty and predictability, as the final price is established upfront. It incentivizes the contractor to manage their costs efficiently and to perform the work effectively to maintain profitability. However, FFP contracts can sometimes lead to higher initial prices because contractors often build in a contingency to cover unforeseen costs and risks. Additionally, if the scope of work is not perfectly defined, changes can be more difficult and costly to manage compared to other contract types like Cost-Plus contracts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA850419R0006

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 ALBERT ST SUITE 700, OTTAWA

Business Categories: Category Business, Foreign Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $39,248,486

Exercised Options: $39,248,486

Current Obligation: $36,099,604

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline