DoD's $38.8M contract for logistics support awarded to Canadian Commercial Corporation without competition

Contract Overview

Contract Amount: $38,804,142 ($38.8M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2016-12-30

End Date: 2021-12-31

Contract Duration: 1,827 days

Daily Burn Rate: $21.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT

Plain-Language Summary

Department of Defense obligated $38.8 million to CANADIAN COMMERCIAL CORPORATION for work described as: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract duration of 1827 days suggests a long-term need for these services. 3. Awarded to a foreign entity, raising questions about domestic industrial base utilization. 4. Lack of competition suggests potential for higher costs and reduced innovation. 5. The NAICS code 334511 points to a focus on specialized system manufacturing. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and the specific nature of logistics support for specialized systems. The firm-fixed-price structure provides cost certainty, but without comparison to other offers, it's difficult to ascertain if the price represents optimal value for the government. The absence of competition could mean the price is not as favorable as it might have been in a more open market.

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 bypasses the standard competitive bidding process, which typically drives down prices and encourages innovation. The lack of competition means the government did not explore alternative solutions or pricing from a range of potential suppliers, potentially leading to a less advantageous outcome.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not secure the most competitive pricing available in the market. It also limits the opportunity for new or smaller businesses to enter into contracts with the agency.

Public Impact

The Department of the Air Force benefits from continued logistics support for critical systems. Services likely ensure the operational readiness and maintenance of specific defense equipment. The contract supports the Canadian Commercial Corporation, a foreign entity, in providing these services. Workforce implications are primarily within the contractor's organization, with potential indirect impacts on U.S. defense readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing and reduced value for taxpayer funds.
Sole-source award to a foreign entity raises questions about prioritizing domestic industrial capabilities.
Absence of small business participation limits opportunities for smaller U.S. businesses.
Limited transparency into the justification for a sole-source award.

Positive Signals

Firm-fixed-price contract provides cost certainty for the duration of the award.
Long contract duration suggests a stable and predictable need for the services.
Award to a known entity (Canadian Commercial Corporation) may imply established working relationships or specific expertise.

Sector Analysis

This contract falls within the broader defense sector, specifically related to the manufacturing and support of complex navigation and guidance systems. The market for such specialized logistics support is often niche, with a limited number of qualified providers. The total addressable market for similar systems manufacturing and support can be substantial, but individual contracts are highly specific to the technology involved.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there information indicating subcontracting opportunities for small businesses. The award to a large foreign entity suggests that the primary focus was on securing the specific service required, rather than on fostering small business participation. This could mean missed opportunities for the small business ecosystem to contribute to this specific defense need.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations. Transparency is limited due to the sole-source nature, with the justification for the award being a key area for scrutiny.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
Aerospace System Manufacturing and Support
Navigation and Guidance System Procurement
Foreign Military Sales Support

Risk Flags

Sole-source award without clear justification
Potential lack of competitive pricing
Limited visibility into contractor's specific performance metrics
Reliance on foreign entity for critical support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to CANADIAN COMMERCIAL CORPORATION. IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2016-12-30. End: 2021-12-31.

What specific logistics support services are being provided under this contract?

The contract data indicates 'IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT' as the description. While specific details are not provided in the summary data, this typically encompasses a range of services essential for maintaining the operational readiness of defense systems. These can include inventory management, warehousing, transportation, maintenance, repair, and overhaul of equipment, spare parts management, and technical support. Given the NAICS code (334511 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing), the logistics support is likely tailored to specialized systems and instruments within these categories, ensuring their availability and functionality for the Department of the Air Force.

What is the justification for awarding this contract on a sole-source basis?

The provided data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. The specific justification for this determination is not included in the summary data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or specific international agreements. Without the official justification document, it is impossible to definitively state the reason, but it implies that a competitive process was deemed unnecessary or impossible by the contracting agency for reasons not detailed here.

How does the contract value of approximately $38.8 million compare to similar logistics support contracts?

Direct comparison of this $38.8 million contract value to similar logistics support contracts is difficult without more specific details on the exact services rendered and the systems supported. Logistics support contracts can vary significantly in scope, duration, and complexity. However, for specialized defense systems, a contract of this magnitude over a five-year period (2016-2021) is not unusual. The lack of competition, however, prevents an assessment of whether this value represents a competitive market rate or if a more favorable price could have been achieved through bidding.

What is the track record of the Canadian Commercial Corporation in providing similar defense logistics support?

The Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that helps export Canadian goods and services through government-to-government contracts. While CCC facilitates contracts, the actual service delivery is often performed by Canadian companies. CCC has a history of facilitating defense-related contracts for various governments. Its track record in providing direct logistics support for U.S. Department of Defense systems would depend on the specific Canadian companies it partners with for service execution. The fact that the Department of the Air Force engaged CCC suggests a level of trust or a specific framework for intergovernmental procurement.

What are the potential risks associated with awarding a significant contract to a foreign entity?

Awarding a significant contract to a foreign entity like the Canadian Commercial Corporation can present several risks. These include potential challenges in oversight and enforcement due to jurisdictional differences, reliance on foreign supply chains which could be subject to geopolitical instability or trade disputes, and potential delays in delivery or support. Furthermore, there's a strategic consideration regarding the impact on the domestic industrial base; awarding contracts to foreign entities may reduce opportunities for U.S. businesses and potentially impact long-term U.S. technological self-sufficiency in critical defense areas. However, in this case, Canada is a close ally, which may mitigate some of these risks compared to contracting with less aligned nations.

What does the firm-fixed-price contract type imply about cost management and risk?

A firm-fixed-price (FFP) contract type signifies that the contractor bears the primary responsibility for all costs incurred and is entitled to a negotiated profit. This structure provides the government with the highest degree of cost certainty, as the price is fixed regardless of the contractor's actual costs. For the contractor, it implies a higher risk if costs escalate beyond projections. This contract type is generally preferred when the scope of work is well-defined and the risks are understood, as is often the case with established logistics support requirements. It incentivizes the contractor to manage costs efficiently to maximize profit.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA850916R0007

Offers Received: 1

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: $38,811,312

Exercised Options: $38,811,312

Current Obligation: $38,804,142

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $13,105,927

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline