DoD awards $107.7M for Joint Terminal Control Training, with CAE USA Inc. as prime contractor

Contract Overview

Contract Amount: $107,685,023 ($107.7M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-02

End Date: 2027-08-20

Contract Duration: 2,270 days

Daily Burn Rate: $47.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT TERMINAL CONTROL TRAINING AND REHEARSAL SYSTEM PRODUCTION AND SUSTAINMENT

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $107.7 million to CAE USA INC. for work described as: JOINT TERMINAL CONTROL TRAINING AND REHEARSAL SYSTEM PRODUCTION AND SUSTAINMENT Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract with a firm-fixed-price structure, indicating price certainty. 3. Performance period spans over 2270 days, from June 2021 to August 2027. 4. The contract is for production and sustainment of a critical training system. 5. The prime contractor, CAE USA Inc., has a significant role in defense training systems. 6. The contract is located in Texas, potentially impacting the local economy and workforce.

Value Assessment

Rating: good

Benchmarking the value of this $107.7 million contract requires detailed cost breakdowns and comparisons to similar training systems. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be favorable for the government. The award to CAE USA Inc., a known entity in simulation and training, implies a level of confidence in their ability to deliver value. Further analysis would involve comparing the per-unit cost of training modules or sustainment services to industry standards.

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 a bid. The presence of 4 bidders (no) suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that the government is obtaining the best possible value by considering multiple offers.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who will utilize the Joint Terminal Control Training and Rehearsal System for enhanced operational readiness. The contract delivers production and sustainment services for a critical training system, ensuring its availability and effectiveness. The geographic impact is centered in Texas, where the contract will be performed, potentially creating or sustaining jobs in the region. Workforce implications include employment opportunities for engineers, technicians, and support staff involved in the production and maintenance of the training system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for all production and sustainment complexities.
Dependence on a single prime contractor for a critical training system could pose risks if performance issues arise.
The long duration of the contract may require ongoing monitoring to ensure continued alignment with evolving training needs.

Positive Signals

Awarded through full and open competition, indicating a competitive environment that should drive value.
Firm-fixed-price contract structure shifts cost risk to the contractor, promoting budget predictability.
The prime contractor, CAE USA Inc., has established expertise in defense simulation and training systems.
The contract duration allows for long-term planning and sustainment of a vital training capability.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to defense training and simulation systems. The market for defense simulation and training is substantial, driven by the need for realistic and cost-effective training solutions. Companies like CAE USA Inc. are key players in this sector, providing advanced technologies that reduce the need for live training exercises, thereby lowering costs and risks. Comparable spending benchmarks would involve looking at other large-scale simulation and training system procurements by the Department of Defense.

Small Business Impact

This contract does not appear to have a specific small business set-aside (sb: false). There is no explicit mention of subcontracting goals for small businesses in the provided data. Further investigation into the contract's subcontracting plan would be necessary to assess the impact on the small business ecosystem. Without this information, it's difficult to determine the extent to which small businesses will participate in fulfilling this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force, a component of the Department of Defense. Accountability measures are typically embedded within the contract's performance work statement, including delivery schedules, quality standards, and reporting requirements. Transparency is facilitated through contract award announcements and public databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Joint Terminal Attack Controller (JTAC) Training
Air Combat Training Systems
Military Simulation and Training
Defense Readiness Programs
Aerospace Engineering Services

Risk Flags

Long-term contract duration requires sustained oversight.
Firm-fixed-price contracts can sometimes lead to less flexibility for scope changes.
Dependence on a single contractor for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $107.7 million to CAE USA INC.. JOINT TERMINAL CONTROL TRAINING AND REHEARSAL SYSTEM PRODUCTION AND SUSTAINMENT

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 $107.7 million.

What is the period of performance?

Start: 2021-06-02. End: 2027-08-20.

What is CAE USA Inc.'s track record with similar Department of Defense training contracts?

CAE USA Inc. has a significant and established track record with the Department of Defense, particularly in the realm of simulation and training systems. They are known for developing and providing advanced flight simulators, mission trainers, and other sophisticated training solutions for various military branches. Their portfolio includes contracts for aircraft simulators (e.g., for the F-15, F-16, and C-130), maritime training systems, and virtual combat environments. This extensive experience suggests a deep understanding of military training requirements and a proven ability to deliver complex systems. Their history indicates a capacity to manage large-scale production and sustainment efforts, which is directly relevant to the Joint Terminal Control Training and Rehearsal System Production and Sustainment contract.

How does the $107.7 million value compare to other JTAC training systems procurements?

Comparing the $107.7 million value of this contract requires a detailed analysis of the scope of work, duration, and specific capabilities of the Joint Terminal Control Training and Rehearsal System (JTCTRS) against other procurements. However, in the broader context of defense training systems, this figure is substantial but not unusual for a multi-year production and sustainment effort for a critical capability. Large-scale simulator programs, especially those involving advanced technologies and long-term support, often run into tens or hundreds of millions of dollars. For instance, other advanced combat training simulators or virtual reality training environments for different platforms (like aircraft or naval vessels) have seen similar or even higher contract values. The firm-fixed-price nature and the 5-year duration (approximately) suggest a comprehensive package for both initial production and ongoing support.

What are the primary risks associated with the production and sustainment of this training system?

The primary risks associated with the production and sustainment of the Joint Terminal Control Training and Rehearsal System (JTCTRS) include technological obsolescence, integration challenges, and performance degradation over time. As technology evolves rapidly, the system may require frequent updates to remain relevant and effective, posing a risk of increased sustainment costs or the need for mid-life upgrades. Integration with existing military networks and other training platforms can be complex, leading to potential delays or performance issues. Furthermore, ensuring consistent performance and reliability throughout the sustainment period, especially under a firm-fixed-price contract, requires robust quality control and proactive maintenance strategies. The long contract duration also introduces risks related to contractor performance stability and potential changes in government requirements.

How effective is the Joint Terminal Control Training and Rehearsal System in preparing JTACs for real-world scenarios?

The effectiveness of the Joint Terminal Control Training and Rehearsal System (JTCTRS) is crucial for preparing Joint Terminal Attack Controllers (JTACs) for real-world scenarios. JTACs are responsible for guiding close air support (CAS) missions, a high-stakes role requiring precise communication and situational awareness. Training systems like the JTCTRS aim to replicate the complexities of these missions in a safe, controlled, and cost-effective environment. By simulating various battlefield conditions, threat environments, and communication protocols, the system allows JTACs to practice decision-making, target identification, and coordination with air assets. While specific performance metrics for this particular system are not detailed here, the investment in its production and sustainment by the Department of Defense indicates a belief in its capability to enhance JTAC proficiency and mission success rates, ultimately contributing to safer and more effective CAS operations.

What are the historical spending patterns for JTAC training and related systems within the Department of Defense?

Historical spending patterns for Joint Terminal Attack Controller (JTAC) training and related systems within the Department of Defense reflect a growing emphasis on realistic, technology-driven training solutions. As modern warfare increasingly involves complex joint operations and precision munitions, the role of JTACs has become more critical. Consequently, investments in JTAC training capabilities, including simulators, virtual environments, and sustainment services, have seen a steady increase. This $107.7 million contract for the JTCTRS production and sustainment is indicative of this trend. Prior to such comprehensive systems, training might have relied more heavily on field exercises and less sophisticated simulators. Over the past decade, there has been a clear shift towards procuring advanced simulation and training technologies to improve readiness, reduce costs associated with live training, and enhance safety.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA862120R0003

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $200,769,420

Exercised Options: $111,446,597

Current Obligation: $107,685,023

Actual Outlays: $1,261,884

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $775,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline