DoD awards $84.6M for MH-60R/S Training Systems, lacking competition

Contract Overview

Contract Amount: $84,561,069 ($84.6M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2011-01-14

End Date: 2016-08-01

Contract Duration: 2,026 days

Daily Burn Rate: $41.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MH-60R TOFT S/N 8 AND MH-60R/S TOFT S/N 10

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $84.6 million to CAE USA INC. for work described as: MH-60R TOFT S/N 8 AND MH-60R/S TOFT S/N 10 Key points: 1. Significant investment in specialized training systems for naval helicopters. 2. Sole-source award raises concerns about price reasonableness and market competition. 3. Potential for higher costs due to limited vendor options. 4. Sector is defense manufacturing, specifically aviation training simulation.

Value Assessment

Rating: questionable

The award of $84.6 million for training systems lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing if the price is optimal for the capabilities provided is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition may result in inflated prices, meaning taxpayers could be paying more than necessary for these critical training systems.

Public Impact

Ensures readiness for naval helicopter pilots and crew. Supports advanced simulation technology for training. Potential impact on future defense training system procurement strategies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for cost overruns

Positive Signals

Supports critical defense capabilities
Utilizes advanced training technology

Sector Analysis

This contract falls within the defense sector, specifically focusing on specialized machinery manufacturing for aviation training simulators. Benchmarks for similar sole-source training systems are difficult to establish without competitive data.

Small Business Impact

The data provided does not indicate any subcontracting to small businesses. Further investigation would be needed to determine if small businesses were involved or had opportunities to participate.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of the Navy's procurement process for this award warrants scrutiny to confirm adherence to regulations and best practices.

Related Government Programs

Other Commercial and Service Industry Machinery Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency in price determination
Risk of vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.6 million to CAE USA INC.. MH-60R TOFT S/N 8 AND MH-60R/S TOFT S/N 10

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 Navy).

What is the total obligated amount?

The obligated amount is $84.6 million.

What is the period of performance?

Start: 2011-01-14. End: 2016-08-01.

What justification was provided for the sole-source award, and does it align with federal procurement regulations for non-competitive procurements?

The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of alternative sources. For this contract, the specific justification needs to be reviewed against FAR Part 6. Without this information, it's difficult to assess if the government received the best value or if competition was improperly excluded.

How was the 'best value' determined in the absence of competitive bids, and what mechanisms were in place to ensure a fair and reasonable price?

Determining 'best value' without competition relies heavily on negotiation and cost/price analysis by the contracting agency. This involves comparing the proposed price against historical data, independent cost estimates, or commercial price lists. Robust internal review and justification are essential to ensure the price is fair and reasonable.

What is the long-term strategy for procuring similar training systems, and will future procurements be competed to foster innovation and cost savings?

The long-term strategy is critical. If this sole-source award is a precursor to future needs, the agency should outline plans for market research and potential competition in subsequent contract actions. Relying solely on one vendor can stifle innovation and lead to escalating costs over time.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6133910R0016

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc (UEI: 202131454)

Address: 4908 TAMPA W BLVD, TAMPA, FL, 33634

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: $85,273,293

Exercised Options: $84,561,069

Current Obligation: $84,561,069

Contract Characteristics

Cost or Pricing Data: YES

Timeline