DoD's $330M B-2 Training System Contract Awarded to CAE USA INC. for 3074 Days

Contract Overview

Contract Amount: $330,078,974 ($330.1M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2018-12-27

End Date: 2027-05-28

Contract Duration: 3,074 days

Daily Burn Rate: $107.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B-2 TRAINING SYSTEM

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $330.1 million to CAE USA INC. for work described as: B-2 TRAINING SYSTEM Key points: 1. Value for money assessed through comparison to similar training systems and market rates. 2. Competition dynamics indicate a full and open process, potentially leading to better pricing. 3. Risk indicators include contract duration and potential for scope creep in complex training systems. 4. Performance context relies on successful delivery of simulation and training capabilities for the B-2 bomber. 5. Sector positioning within defense training and simulation, a specialized but critical area.

Value Assessment

Rating: good

The contract value of $330 million over approximately 8.5 years suggests a significant investment in advanced training capabilities. Benchmarking against similar large-scale defense training systems is challenging due to the unique nature of B-2 bomber training. However, the firm-fixed-price structure provides cost certainty for the government. The total contract value, when annualized, appears reasonable for a program of this complexity and duration, assuming the delivered training system meets all performance requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The solicitation process aimed to attract a wide range of qualified contractors, fostering a competitive environment. The presence of multiple bidders generally supports price discovery and can lead to more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it encourages competitive bidding, which typically drives down costs and ensures the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the U.S. Air Force pilots and aircrew who will receive advanced training on the B-2 bomber. The contract delivers critical simulation and training services essential for maintaining operational readiness and proficiency. Geographic impact is primarily centered around the B-2 bomber's operational bases, likely Whiteman Air Force Base, Missouri. Workforce implications include specialized technical roles for instructors, maintenance personnel, and simulation developers at CAE USA INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 8 years) increases the risk of cost overruns due to inflation or unforeseen technological changes.
Complexity of B-2 training systems may lead to integration challenges and potential performance gaps.
Reliance on a single contractor for such a critical system could pose risks if the contractor faces financial or operational difficulties.

Positive Signals

Firm-fixed-price contract type limits the government's exposure to cost increases.
Full and open competition suggests a robust selection process, likely resulting in a capable contractor.
The contract is for a critical national defense asset, implying high standards for performance and reliability.

Sector Analysis

The defense training and simulation sector is a significant market within the broader aerospace and defense industry. Companies like CAE USA INC. specialize in developing sophisticated training solutions, including flight simulators, virtual reality environments, and computer-based training. This contract fits within the segment focused on high-fidelity simulation for advanced military platforms, where market entry is often high due to technological barriers and security requirements. Comparable spending benchmarks are difficult to pinpoint due to the unique nature of the B-2 platform, but large-scale simulation contracts can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. However, the prime contractor, CAE USA INC., may engage small businesses as subcontractors to fulfill certain aspects of the contract, such as specialized software development or component manufacturing. The extent of small business participation will depend on CAE USA INC.'s subcontracting plan and the specific requirements of the training system.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Air Force contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement (PWS), including delivery schedules, technical performance metrics, and quality assurance provisions. Transparency is generally maintained through contract award announcements and public contract databases, though specific operational details of the training system may be classified.

Related Government Programs

Aircrew Training Systems
Simulation and Training Technology
Defense Contractor Services
B-2 Bomber Program Support
Advanced Pilot Training Platforms

Risk Flags

Long-term contract duration
Complexity of training system
Potential for technological obsolescence
Reliance on single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $330.1 million to CAE USA INC.. B-2 TRAINING SYSTEM

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 $330.1 million.

What is the period of performance?

Start: 2018-12-27. End: 2027-05-28.

What is CAE USA INC.'s track record with complex defense simulation contracts?

CAE USA INC. has a well-established track record in developing and providing advanced simulation and training solutions for various defense platforms. They are known for their expertise in flight simulators, mission training systems, and integrated training environments. The company has previously supported programs for the U.S. Army, Navy, and Air Force, as well as international military clients. Their experience includes developing high-fidelity simulators for fighter jets, helicopters, and transport aircraft. While specific details on past B-2 related contracts are not publicly detailed, their broad experience in complex military aviation training suggests a strong capability to handle this requirement. Their history indicates a capacity for delivering sophisticated training systems that meet stringent military specifications.

How does the $330 million contract value compare to similar B-2 program spending?

Direct comparisons of this $330 million contract value to specific B-2 program spending are difficult without access to detailed historical B-2 program budgets and contract data. However, the B-2 program itself is known for its extremely high development and operational costs due to the advanced stealth technology and capabilities of the aircraft. Training systems for such complex platforms are typically substantial investments. When considering the duration of this contract (over 8 years), the annualized cost is approximately $38.8 million per year. This figure needs to be contextualized against the overall sustainment and modernization costs of the B-2 fleet, which are substantial. The value appears consistent with the specialized and high-tech nature of training required for a unique strategic bomber.

What are the primary risks associated with this long-term training system contract?

The primary risks associated with this long-term (over 8 years) training system contract include technological obsolescence, where the training system may become outdated before the contract ends due to rapid advancements in simulation technology or B-2 platform upgrades. Cost escalation is another risk, although mitigated by the firm-fixed-price structure; unforeseen integration issues or scope creep could still lead to cost pressures. Performance risk exists if the delivered system does not meet the demanding fidelity and reliability requirements for training pilots on a complex strategic bomber. Contractor viability is also a consideration; any financial or operational instability within CAE USA INC. could jeopardize the delivery of critical training services. Finally, security risks related to handling sensitive information about the B-2 platform and its training protocols are inherent.

How effective is full and open competition in ensuring value for taxpayer money in defense contracts?

Full and open competition is widely considered the most effective method for ensuring value for taxpayer money in defense contracts. By allowing all responsible sources to submit bids, it maximizes the pool of potential suppliers, thereby increasing the likelihood of receiving competitive pricing. This process encourages innovation as contractors strive to differentiate their offerings to win the contract. It also promotes transparency and accountability, as the selection criteria and evaluation process are typically well-defined. While it requires more upfront effort in terms of solicitation and evaluation, the potential for cost savings and access to superior solutions generally outweighs these initial investments. For complex systems like the B-2 training system, competition helps ensure that the government is not overpaying for specialized capabilities.

What is the historical spending trend for B-2 related training and simulation?

Historical spending trends for B-2 related training and simulation are not readily available in the public domain due to the classified nature of much of the B-2 program's details. However, it is understood that the B-2 program has consistently required significant investment in training and simulation throughout its operational life. Early in the program, substantial funds would have been allocated for the development and initial procurement of training systems. In subsequent years, spending would shift towards sustainment, upgrades, and potentially new training modules to reflect evolving tactics or aircraft modifications. Given the aircraft's advanced capabilities and strategic importance, it is reasonable to assume that annual spending on its training and simulation infrastructure has been substantial, likely in the tens of millions of dollars annually, fluctuating based on modernization efforts and operational tempo.

What are the implications of a firm-fixed-price contract for this training system?

A firm-fixed-price (FFP) contract for this B-2 training system implies that CAE USA INC. is obligated to perform the work specified in the contract for a predetermined, fixed price. This structure shifts the majority of the cost risk from the government to the contractor. The contractor is responsible for managing costs and absorbing any overruns incurred during performance. For the government, this provides significant cost certainty and predictability, making budgeting easier. However, it can also incentivize the contractor to cut corners on quality or performance if not adequately monitored, although the high-stakes nature of defense contracts and robust oversight mechanisms typically mitigate this. The FFP structure is generally favored for well-defined requirements where technical risks are manageable.

Industry Classification

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

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

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: 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: $363,268,246

Exercised Options: $363,268,246

Current Obligation: $330,078,974

Actual Outlays: $8,368,594

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $20,289,262

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862115D6273

IDV Type: IDC

Timeline