Department of Defense awards $28.7M contract for search, detection, navigation, and guidance systems

Contract Overview

Contract Amount: $28,736,466 ($28.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-20

End Date: 2025-03-31

Contract Duration: 284 days

Daily Burn Rate: $101.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MX-15D (RSTA)

Plain-Language Summary

Department of Defense obligated $28.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: MX-15D (RSTA) Key points: 1. Contract value represents a significant investment in critical defense systems. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Short performance period suggests a focus on immediate operational needs. 4. The contractor, Canadian Commercial Corporation, has a history of government contracts. 5. This award falls within the broader category of defense electronics manufacturing. 6. The firm fixed price contract type aims to control costs for the government.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific application. The award amount of $28.7 million for a period of approximately 9 months appears reasonable for specialized defense equipment. However, without competitive bids, it's difficult to definitively assess if this represents the best possible value for the taxpayer. Comparisons to similar, competitively awarded contracts for comparable systems would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Sole-source awards can limit opportunities for taxpayers to benefit from competitive pricing, potentially resulting in less cost-effective use of public funds compared to fully competed contracts.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring advanced search, detection, navigation, and guidance systems. The contract will deliver critical technological components essential for military operations. Geographic impact is likely concentrated within defense installations and operational theaters where these systems are deployed. Workforce implications may include specialized technical roles for manufacturing, integration, and support of these advanced systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of transparency in the sole-source justification requires careful review.
Performance risks associated with specialized defense technology procurement.
Dependence on a single contractor for critical system components.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Contractor's established relationship with government entities may streamline execution.
Award supports critical national defense capabilities.

Sector Analysis

This contract falls within the defense electronics sector, specifically focusing on systems for search, detection, navigation, and guidance. This is a highly specialized area within the broader aerospace and defense industry, characterized by significant R&D investment and stringent performance requirements. The market is often dominated by a few key players due to high barriers to entry, including technological expertise and security clearances. Comparable spending in this sector can vary widely based on the specific technology and scale of deployment.

Small Business Impact

There is no indication that this contract includes small business set-asides. The sole-source nature of the award further suggests that opportunities for small business participation, either as prime contractors or through subcontracting, may be limited unless specifically mandated by the prime contractor. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed price structure, which places cost risk on the contractor. Transparency may be limited due to the sole-source nature, but contract performance and delivery will be monitored. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Electronics Manufacturing
Navigation and Guidance Systems
Search and Detection Equipment
Military Systems Integration

Risk Flags

Sole-source award
Potential for limited competition
Reliance on a single supplier for critical systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.7 million to CANADIAN COMMERCIAL CORPORATION. MX-15D (RSTA)

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 Navy).

What is the total obligated amount?

The obligated amount is $28.7 million.

What is the period of performance?

Start: 2024-06-20. End: 2025-03-31.

What is the specific nature of the search, detection, navigation, and guidance systems being procured under this contract?

The contract data indicates the procurement is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the specific system details are not provided in the summary data, this classification suggests advanced electronic systems critical for military operations. These could range from radar and sonar components to inertial navigation units, GPS-related equipment, or integrated sensor suites for aircraft, vessels, or ground platforms. The exact application would dictate the precise technological capabilities and performance requirements.

Why was this contract awarded on a sole-source basis, and what are the implications for cost?

Sole-source awards are typically justified when only one responsible contractor can meet the government's needs, often due to unique capabilities, proprietary technology, or urgent requirements where competition is not feasible. The implications for cost are significant: without competitive bids, the government may not achieve the lowest possible price. The Canadian Commercial Corporation (CCC) is a Crown corporation that facilitates government procurement, and its involvement might be part of a specific intergovernmental agreement or a recognized sole-source pathway. A thorough review of the justification for this sole-source award is crucial to understand why competition was bypassed and to assess if the resulting price is fair and reasonable.

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

The Canadian Commercial Corporation (CCC) has a history of facilitating government procurement for both Canadian and international clients, including defense contracts. As an entity that often acts as an intermediary or prime contractor, its track record involves managing complex supply chains and ensuring compliance with government regulations. While CCC itself may not be the primary manufacturer of all components, its role is to ensure successful delivery. Specific performance data on similar defense contracts managed by CCC would require deeper research into its project portfolio and government performance databases to assess its reliability and effectiveness in delivering specialized defense systems.

How does this contract's value and duration compare to similar procurements for defense systems?

The contract value of $28.7 million over a period of approximately 9 months (June 2024 to March 2025) suggests a procurement of specialized, potentially high-value components or systems. Comparing this to similar procurements is challenging without knowing the exact nature of the systems. However, for defense electronics, this value and duration are not unusual for specific system upgrades or the supply of critical components. Competitively awarded contracts for similar broad categories like 'Search, Detection, Navigation, Guidance Systems' can range from a few million to hundreds of millions of dollars, with durations varying based on complexity and production timelines. The sole-source nature here prevents a direct value-for-money comparison against a competitive benchmark.

What are the potential risks associated with relying on a single contractor for these critical defense systems?

Relying on a single contractor for critical defense systems introduces several risks. Firstly, there's a risk of supply chain disruption if the contractor faces production issues, financial instability, or other operational challenges. Secondly, the lack of competition can lead to complacency and potentially higher prices over time, as the contractor faces less pressure to innovate or reduce costs. Thirdly, there's a strategic risk if the technology becomes obsolete or if a competitor develops superior capabilities that the sole-source provider cannot match. Finally, dependence on a foreign entity (Canadian Commercial Corporation) for critical defense components could introduce geopolitical risks or complexities in ensuring timely delivery and support.

What is the North American Industry Classification System (NAICS) code '334511' and what does it signify for this contract?

The NAICS code 334511 stands for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' This classification signifies that the contract is for the production or manufacturing of systems and instruments used for these specific military and civilian functions. Companies operating under this NAICS code typically develop and produce complex electronic and mechanical equipment such as radar systems, GPS receivers, flight control systems, sonar equipment, and related instruments. This contract directly aligns with the core business activities described by this code, indicating a focus on the manufacturing of these specialized defense technologies.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016422RJQ87

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: $28,736,466

Exercised Options: $28,736,466

Current Obligation: $28,736,466

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016424DJQ87

IDV Type: IDC

Timeline