DoD's $72M AWACS DRAGON FCTS contract to CAE USA INC. awarded under full and open competition

Contract Overview

Contract Amount: $72,099,861 ($72.1M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2016-07-27

End Date: 2026-03-24

Contract Duration: 3,527 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWACS DRAGON FCTS

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $72.1 million to CAE USA INC. for work described as: AWACS DRAGON FCTS Key points: 1. Value for money appears fair given the long duration and firm-fixed-price nature, suggesting cost control. 2. Competition dynamics indicate a robust market with full and open competition, likely driving competitive pricing. 3. Risk indicators are moderate, with a long contract duration and potential for cost overruns if not managed closely. 4. Performance context is within aircraft parts manufacturing, a critical but potentially volatile sector. 5. Sector positioning is in defense aviation support, a key area for national security readiness.

Value Assessment

Rating: fair

The total contract value of approximately $72 million over nearly 10 years suggests a moderate annual spend. Benchmarking against similar long-term support contracts for complex aviation systems is difficult without more specific data on the scope of 'AWACS DRAGON FCTS'. However, the firm-fixed-price structure implies the government has negotiated a set price, which is generally favorable for cost predictability. The absence of significant modifications or overruns (based on available data) could indicate reasonable initial pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a healthy level of competition for this requirement. This broad competition is generally expected to lead to more competitive pricing and a wider range of technical solutions being considered by the agency.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value and price for the required aircraft parts and auxiliary equipment.

Public Impact

The Department of the Air Force benefits from the continued availability of essential parts for its AWACS fleet. Services delivered include the manufacturing and supply of aircraft parts and auxiliary equipment. Geographic impact is primarily centered in Texas, where the contractor is located. Workforce implications include jobs supported at CAE USA INC. and its supply chain, particularly in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 10 years) increases the risk of price escalation or obsolescence of technology if not managed proactively.
Dependence on a single contractor for critical AWACS components could pose a supply chain risk if the contractor faces financial or operational difficulties.
The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code is broad, making it difficult to assess specific technological risks without more detail on the 'DRAGON FCTS' component.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potentially better pricing.
Firm Fixed Price contract type helps control costs and provides budget certainty for the government.
The contractor, CAE USA INC., has a significant presence in the aerospace and defense sector, implying relevant expertise.
The contract is managed by the Department of the Air Force, a major defense agency with established procurement oversight processes.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for aircraft parts and auxiliary equipment are crucial for maintaining military readiness. The market for such components is often specialized, with a mix of large prime contractors and smaller, specialized suppliers. Spending in this area is driven by fleet modernization, sustainment, and operational requirements. Comparable spending benchmarks would depend heavily on the specific components and systems involved, but defense aviation sustainment is a multi-billion dollar segment annually.

Small Business Impact

This contract does not appear to have a small business set-aside (SB=false). There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses in their supply chains.

Oversight & Accountability

Oversight is provided by the Department of the Air Force, a component of the Department of Defense. As a definitive contract awarded under full and open competition, it is subject to standard DoD procurement regulations and oversight. Transparency is facilitated by contract award databases like FPDS. Accountability measures would be embedded in the contract's performance clauses and delivery schedules. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

AWACS Aircraft Sustainment
Defense Aviation Parts Procurement
Air Force Logistics Contracts
Aerospace Manufacturing Support
DoD Component Supply Chain Management

Risk Flags

Long contract duration increases potential for price volatility or obsolescence.
Dependence on specific components could create supply chain vulnerabilities.
NAICS code is broad, obscuring specific technological risks.
Lack of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.1 million to CAE USA INC.. AWACS DRAGON FCTS

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 Air Force).

What is the total obligated amount?

The obligated amount is $72.1 million.

What is the period of performance?

Start: 2016-07-27. End: 2026-03-24.

What is the specific nature of the 'AWACS DRAGON FCTS' and what critical functions do these parts support?

The 'AWACS DRAGON FCTS' likely refers to components or a system related to the E-3 Sentry Airborne Warning and Control System (AWACS) aircraft, potentially involving Forward-Looking Infrared (FLIR) or other sensor/targeting systems ('DRAGON' could be a program name or codename). These parts are critical for the AWACS's primary mission: providing airborne command and control, intelligence, surveillance, and reconnaissance (ISR) capabilities. The E-3 fleet is aging, and sustainment contracts like this are vital for maintaining operational readiness. Without specific technical documentation, the exact function of 'DRAGON FCTS' remains proprietary, but it is understood to be essential for the aircraft's advanced operational capabilities, ensuring its effectiveness in detecting and tracking threats.

How does the $72 million contract value compare to historical spending on similar AWACS components or sustainment efforts?

Direct comparison of the $72 million total contract value to historical spending on similar AWACS components is challenging without granular data on specific parts or sub-systems. However, the contract duration of nearly 10 years (from July 2016 to March 2026) places the average annual value at approximately $7.2 million. This figure needs to be contextualized against the overall sustainment budget for the E-3 AWACS fleet, which encompasses numerous contracts for engines, avionics, airframes, software, and specialized mission equipment. Given the complexity and criticality of AWACS systems, an annual spend in the low millions for specific component families or sustainment efforts is plausible within the broader multi-billion dollar lifecycle costs associated with such platforms.

What are the key performance indicators (KPIs) and risk mitigation strategies outlined in the contract for CAE USA INC.?

Specific Key Performance Indicators (KPIs) and risk mitigation strategies are typically detailed within the contract's Statement of Work (SOW) and performance clauses, which are not publicly available in this data extract. However, for a firm-fixed-price contract of this nature, common KPIs would likely include on-time delivery rates, quality acceptance rates (minimizing defects), adherence to technical specifications, and potentially responsiveness to urgent requirements. Risk mitigation strategies employed by the government would involve rigorous source selection, clear contract terms, performance monitoring, and potentially penalties for non-performance. CAE USA INC.'s own risk mitigation would involve robust quality control, supply chain management, and production planning to meet the contract's demands within the fixed price.

What is the track record of CAE USA INC. in fulfilling similar large-scale defense aerospace contracts?

CAE USA INC. has a substantial track record in the defense and aerospace sector, primarily known for its expertise in simulation, training, and mission systems, as well as aviation support. The company has secured numerous contracts with the U.S. Department of Defense and allied nations for pilot training systems, simulator maintenance, and integrated mission solutions. While this specific contract focuses on parts manufacturing and auxiliary equipment, it leverages CAE's broader understanding of military aviation platforms and sustainment needs. Their history suggests a capacity to manage complex, long-term contracts, although the specifics of their performance on parts manufacturing versus training systems would require deeper investigation into past contract performance reports.

Are there any potential cost overruns or contract modifications anticipated given the contract's long duration?

The firm-fixed-price (FFP) nature of this contract is designed to minimize the risk of cost overruns for the government, as the price is set upfront. However, long-duration contracts (nearly 10 years) inherently carry some risk. Potential cost overruns could arise from unforeseen increases in raw material costs, labor, or significant changes in the threat environment requiring modifications to the supplied parts. Contract modifications are possible, especially for changes in technical requirements or scope, but they would typically involve negotiation and potentially impact the overall cost. Without access to contract modification history, it's difficult to assess the likelihood, but the FFP structure aims to place the cost risk primarily on the contractor.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $77,138,188

Exercised Options: $72,099,861

Current Obligation: $72,099,861

Actual Outlays: $926,537

Subaward Activity

Number of Subawards: 803

Total Subaward Amount: $202,842,304

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline