Department of Defense awards $18.9M contract for electro-optic systems, with limited competition

Contract Overview

Contract Amount: $18,902,008 ($18.9M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-10

End Date: 2025-12-31

Contract Duration: 569 days

Daily Burn Rate: $33.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF ELECTRO OPTIC SYSTEMS

Plain-Language Summary

Department of Defense obligated $18.9 million to CANADIAN COMMERCIAL CORPORATION for work described as: PROCUREMENT OF ELECTRO OPTIC SYSTEMS Key points: 1. The contract value of $18.9 million for electro-optic systems appears to be a significant investment in specialized equipment. 2. The procurement method, 'NOT AVAILABLE FOR COMPETITION', raises questions about the extent of market research and potential for cost savings through broader competition. 3. The fixed-price contract type suggests a defined scope and risk allocation, but the absence of a specific competition type limits detailed value-for-money assessment. 4. The duration of 569 days indicates a medium-term project for the delivery of these systems. 5. The primary agency is the Department of Defense, with the Department of the Navy as the specific service branch. 6. The North American Industry Classification System (NAICS) code 334511 points to the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems and instruments.

Value Assessment

Rating: fair

Benchmarking the value of this $18.9 million contract for electro-optic systems is challenging without more specific details on the system's capabilities and intended use. Given the limited competition, it's difficult to definitively assess if the pricing is competitive. However, the firm fixed-price nature of the contract provides some cost certainty for the government. Further analysis would require comparing this award to similar procurements for comparable electro-optic systems, considering factors like technological sophistication and quantity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' basis, indicating that the Canadian Commercial Corporation was the sole source. This suggests that either a specific justification for sole-source procurement was made, or the procurement was conducted through an intergovernmental agreement. The lack of open competition limits the government's ability to solicit bids from multiple vendors, potentially impacting price discovery and the opportunity to secure the most advantageous terms.

Taxpayer Impact: Sole-source awards can sometimes lead to higher prices for taxpayers if robust market research and justification for the lack of competition are not thoroughly documented and scrutinized.

Public Impact

The Department of Defense, specifically the Department of the Navy, will benefit from the acquisition of advanced electro-optic systems. These systems are likely intended to enhance surveillance, targeting, or navigation capabilities for naval operations. The geographic impact is primarily within the operational theaters of the U.S. Navy, potentially extending globally. The contract supports the defense industrial base, likely involving specialized manufacturing and technical expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of open competition may limit opportunities for other qualified vendors and potentially higher costs.
The specific capabilities and intended use of the electro-optic systems are not detailed, making it hard to assess true value.
Reliance on a single source could create dependency and potential supply chain risks if not managed carefully.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The contract is awarded to the Canadian Commercial Corporation, suggesting a potential intergovernmental agreement or established relationship.
The procurement addresses a specific need within the Department of the Navy for advanced systems.

Sector Analysis

The electro-optic systems market is a specialized segment within the broader defense and aerospace industry. This sector is characterized by high technological barriers to entry, significant research and development investment, and stringent performance requirements. Companies operating in this space often focus on niche applications such as advanced sensors, targeting pods, and surveillance equipment. The global market for electro-optic systems is substantial, driven by defense modernization efforts and advancements in sensor technology. This contract fits within the defense sector's ongoing need for sophisticated ISR (Intelligence, Surveillance, and Reconnaissance) and targeting capabilities.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not available for this contract. Given the 'NOT AVAILABLE FOR COMPETITION' status and the nature of specialized electro-optic systems, it is less likely that this specific award would have been a small business set-aside. Further investigation into the prime contractor's subcontracting practices would be needed to determine any impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award; however, contract award details are typically made public through federal procurement databases. Accountability measures would be embedded in the contract terms and performance monitoring by the contracting officer.

Related Government Programs

Defense Procurement
Naval Systems
Electro-Optical Technology
Sensor Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Equipment

Risk Flags

Limited Competition
Lack of Detailed System Specifications
Potential for Higher Costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to CANADIAN COMMERCIAL CORPORATION. PROCUREMENT OF ELECTRO OPTIC SYSTEMS

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 $18.9 million.

What is the period of performance?

Start: 2024-06-10. End: 2025-12-31.

What specific electro-optic systems are being procured under this contract, and what are their intended operational capabilities?

The provided data indicates the procurement is for 'ELECTRO OPTIC SYSTEMS' under NAICS code 334511, which covers the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical system and instrument manufacturing. However, the specific type, model, or detailed technical specifications of the electro-optic systems are not disclosed in the summary data. These systems are likely intended to enhance the Department of the Navy's capabilities in areas such as surveillance, targeting, reconnaissance, or navigation. Without further details, it is difficult to ascertain their precise operational functions or technological advancements.

What is the justification for awarding this contract on a 'NOT AVAILABLE FOR COMPETITION' basis, and what market research was conducted?

The data explicitly states the contract was awarded under 'NOT AVAILABLE FOR COMPETITION'. This typically implies that only one responsible source was available or that the requirement was so specialized that only one contractor could fulfill it. Common justifications include unique capabilities, urgent and compelling needs, or specific intergovernmental agreements. The Canadian Commercial Corporation (CCC) is often involved in facilitating procurements for allied nations or through specific international agreements. A thorough review of the contract file, including the Justification and Approval (J&A) document, would be necessary to understand the specific reasons for sole-sourcing and the extent of market research performed to ensure no other viable sources existed.

How does the $18.9 million contract value compare to similar procurements for electro-optic systems within the Department of Defense or other federal agencies?

Comparing the $18.9 million contract value requires access to a broader dataset of similar electro-optic system procurements. Without specific details on the system's capabilities, quantity, and technological sophistication, a direct comparison is difficult. However, for specialized defense systems, contract values can range widely from a few million to hundreds of millions of dollars depending on complexity and scale. Given this is a single delivery order under a potentially larger contract vehicle (though not specified), its value should be assessed in context. If this represents a significant portion of the total contract value or a standalone purchase, it could be considered substantial for a niche technology.

What is the track record of the Canadian Commercial Corporation (CCC) in delivering electro-optic systems to the Department of Defense?

The Canadian Commercial Corporation (CCC) acts as a facilitator for Canadian companies exporting goods and services to foreign governments, including the U.S. Department of Defense. CCC's role is typically to manage the contractual relationship and ensure compliance. Therefore, the track record would largely depend on the performance of the underlying Canadian supplier that CCC is representing. CCC itself has a long history of facilitating international defense procurements. To assess performance specifically for electro-optic systems, one would need to examine past contracts facilitated by CCC involving similar technologies and the performance history of the specific Canadian company involved in this award.

What are the potential risks associated with a sole-source procurement of electro-optic systems, and what mitigation strategies are in place?

Sole-source procurements carry inherent risks, including potentially higher costs due to lack of competition, limited innovation, and vendor lock-in. For electro-optic systems, which are often technologically advanced and critical for defense operations, these risks can be amplified. Mitigation strategies typically involve rigorous cost analysis by the government, strong contract management, clear performance metrics, and potentially negotiating favorable terms in the absence of competitive pressure. The government may also conduct extensive market research beforehand to ensure the sole-source justification is valid and explore options for future competition if feasible.

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: $18,902,008

Exercised Options: $18,902,008

Current Obligation: $18,902,008

Subaward Activity

Number of Subawards: 2

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016424DJQ87

IDV Type: IDC

Timeline