Department of Defense awards $27.4M for MK 200 Propelling Charge, with a 1,978-day performance period

Contract Overview

Contract Amount: $27,366,857 ($27.4M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2018-10-31

End Date: 2024-03-31

Contract Duration: 1,978 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 200 PROPELLING CHARGE

Plain-Language Summary

Department of Defense obligated $27.4 million to CANADIAN COMMERCIAL CORPORATION for work described as: MK 200 PROPELLING CHARGE Key points: 1. The contract value represents a significant investment in specialized ordnance manufacturing. 2. Competition dynamics for this type of specialized defense material are often limited due to stringent requirements. 3. Performance duration suggests a long-term need for these propelling charges. 4. The fixed-price contract type aims to control costs for the government. 5. The award was made to a foreign commercial corporation, indicating potential international sourcing strategies. 6. The North American Industry Classification System (NAICS) code 325920 points to the explosives manufacturing sector.

Value Assessment

Rating: fair

Benchmarking the value-for-money for this specific propelling charge is challenging without detailed cost breakdowns and comparisons to similar international procurements. The firm fixed-price structure provides cost certainty for the government, but the total value over nearly 2,000 days suggests a substantial commitment. Without more granular data on unit costs or alternative supplier pricing, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple potential bidders were allowed to submit proposals. However, the specific nature of defense ordnance manufacturing often means the pool of qualified bidders is inherently limited. The number of actual bidders is not specified, but the 'full and open' designation suggests an effort to maximize competition within the constraints of the specialized market.

Taxpayer Impact: Full and open competition, even with a limited number of qualified bidders, is generally favorable for taxpayers as it encourages competitive pricing and potentially better terms.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring specialized propelling charges for munitions. The service delivered is the manufacturing and supply of MK 200 propelling charges. The geographic impact is primarily within the defense supply chain, potentially involving international logistics. Workforce implications are likely within the specialized manufacturing sector, particularly in explosives production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions given the international awardee.
Long performance period could lead to cost overruns if market conditions change significantly.
Limited visibility into the specific manufacturing processes and quality control by the awarding agency.

Positive Signals

Firm fixed-price contract provides cost predictability.
Awarded under full and open competition, suggesting an attempt to secure competitive terms.
Long-term contract ensures a stable supply of critical ordnance components.

Sector Analysis

The defense ordnance manufacturing sector is highly specialized, characterized by stringent quality control, security requirements, and often long production lead times. The market size is directly tied to defense budgets and geopolitical needs. This contract for propelling charges fits within the broader explosives manufacturing industry (NAICS 325920), which supplies critical components for various military applications. Comparable spending benchmarks would typically be found within other large-scale munitions procurements.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans. Given the specialized nature of explosives manufacturing and the award to a foreign commercial corporation, it is unlikely that small businesses were primary awardees. The impact on the small business ecosystem would be minimal unless they are part of the supply chain for the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is generally limited for defense procurements of this nature, with specific details often classified or proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Munitions Procurement
Explosives and Ammunition Manufacturing
Foreign Military Sales Support
Ordnance Component Supply

Risk Flags

International Sourcing Risk
Long-Term Supply Chain Dependency
Potential for Cost Volatility (despite FFP)
Limited Visibility into Manufacturing Processes

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.4 million to CANADIAN COMMERCIAL CORPORATION. MK 200 PROPELLING CHARGE

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2018-10-31. End: 2024-03-31.

What is the historical spending pattern for MK 200 propelling charges by the Department of Defense?

Historical spending data for specific components like the MK 200 propelling charge is often not publicly itemized in detail. However, overall spending on munitions and related components by the Department of Defense runs into billions of dollars annually. Analyzing trends in the 'Explosives Manufacturing' (NAICS 325920) sector and specific contract awards for similar ordnance items can provide context. The current award of $27.4 million over nearly two thousand days suggests a consistent, albeit not massive, annual requirement for this particular item. Without access to classified or internal DoD procurement databases, precise historical figures for this exact component are unavailable.

How does the unit cost of the MK 200 propelling charge compare to similar international procurements?

Direct comparison of unit costs for specialized defense components like the MK 200 propelling charge is difficult due to proprietary pricing, varying specifications, and different procurement environments. The award to Canadian Commercial Corporation suggests an international sourcing strategy, potentially leveraging different cost structures or existing supply agreements. Benchmarking would require access to detailed cost data from comparable contracts awarded by other nations or even different branches of the U.S. military for similar propelling charges. The firm fixed-price nature of this contract provides cost certainty for the DoD, but the actual unit cost relative to the market is not transparently available from this award data alone.

What are the primary risks associated with a long-term contract for ordnance manufacturing?

Long-term contracts for ordnance manufacturing, such as this 1,978-day award, carry several risks. Firstly, there's the risk of cost escalation if raw material prices or labor costs increase significantly over the contract period, although the firm fixed-price structure aims to mitigate this for the government. Secondly, technological obsolescence is a concern; newer, more effective propelling charges could be developed, rendering the MK 200 outdated. Thirdly, supply chain vulnerabilities can be exacerbated over longer periods, especially with international suppliers, increasing the risk of delivery delays due to geopolitical events, trade disputes, or logistical challenges. Finally, maintaining consistent quality control over an extended production run requires robust oversight.

What is the track record of Canadian Commercial Corporation as a defense contractor?

Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates international trade for Canadian companies, including defense contractors. CCC acts as a contracting agent, helping foreign governments and organizations procure goods and services from Canada. They have a long history of supporting Canadian defense exports and have been involved in numerous government-to-government procurement arrangements. While CCC itself is not a manufacturer, its role as an intermediary suggests a track record of successfully managing complex international defense contracts and ensuring compliance with procurement regulations. Specific performance details on individual contracts, like this one, are typically not publicly detailed.

What is the strategic importance of the MK 200 propelling charge to the Department of Defense?

The MK 200 propelling charge is a critical component in the firing train of certain munitions, responsible for igniting the main propellant charge. Its reliable performance is essential for the effective functioning of artillery shells, mortar rounds, or other ordnance systems. Ensuring a stable and consistent supply of such components is vital for maintaining operational readiness and meeting the demands of military exercises and potential combat scenarios. The Department of Defense's investment in this long-term contract underscores the strategic importance of having a secure source for these specialized energetic materials.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0017418R0035

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: $27,366,857

Exercised Options: $27,366,857

Current Obligation: $27,366,857

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $27,366,857

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017419D0002

IDV Type: IDC

Timeline