DoD's $43.8M engineering services contract with CAE USA, INC. awarded via sole-source justification

Contract Overview

Contract Amount: $43,816,384 ($43.8M)

Contractor: CAE USA, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-02-06

End Date: 2021-05-28

Contract Duration: 2,303 days

Daily Burn Rate: $19.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CSD/OJT FOR COMS

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $43.8 million to CAE USA, INC. for work described as: CSD/OJT FOR COMS Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant duration of over 2300 days suggests a long-term need for services. 3. Firm Fixed Price contract type provides cost certainty for the government. 4. The contract was awarded to CAE USA, INC., a single entity. 5. Services provided under NAICS code 541330 (Engineering Services). 6. The contract was awarded by the Department of the Navy. 7. The contract was active from February 2015 to May 2021. 8. The contract was not set aside for small businesses.

Value Assessment

Rating: questionable

Benchmarking the value of this $43.8 million engineering services contract is challenging without specific performance metrics or comparable sole-source awards. The firm fixed-price structure offers predictability, but the lack of competition raises concerns about whether the government secured the best possible price. Without a competitive process, it's difficult to assess if the pricing aligns with market rates for similar engineering services provided to the Department of the Navy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed openly. This approach is typically used when only one responsible source can provide the required services. The absence of multiple bidders means there was no direct price competition, which can potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without a competitive process, it is harder to ensure that the price paid reflects the best value achievable in the market.

Public Impact

The Department of the Navy benefits from specialized engineering services. The contract supports critical defense infrastructure and operational capabilities. Services were delivered within Florida, potentially impacting the local economy and workforce. The contract likely supported a team of engineers and technical specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source award.
Long contract duration without clear performance benchmarks.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to an established entity suggests potential for reliable service delivery.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports various government functions, including defense, infrastructure, and research. The total federal spending on engineering services is substantial, with significant portions allocated to defense-related projects. This specific contract represents a portion of the Department of the Navy's investment in specialized engineering expertise.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to have a specific subcontracting plan mentioned. This suggests that the primary contractor, CAE USA, INC., was expected to perform the majority of the work. The absence of small business participation requirements means there may be limited opportunities for small businesses to engage in subcontracting on this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined by the contract terms, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Engineering Services
Naval Sea Systems Command Contracts
Professional, Scientific, and Technical Services

Risk Flags

Sole-source award raises concerns about potential lack of competition and price optimization.
Lack of detailed service description makes value assessment difficult.
Absence of small business subcontracting requirements may limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.8 million to CAE USA, INC.. CSD/OJT FOR COMS

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 $43.8 million.

What is the period of performance?

Start: 2015-02-06. End: 2021-05-28.

What specific engineering services were provided under this contract?

The contract falls under NAICS code 541330, which designates Engineering Services. While the specific details of the services are not provided in the abbreviated data, this category typically encompasses a wide range of activities such as design, consulting, analysis, and development related to engineering projects. For the Department of the Navy, these services could range from naval architecture and marine engineering to systems engineering, software engineering, or specialized technical support for naval platforms and infrastructure. The firm fixed-price nature suggests well-defined deliverables were expected.

What is the typical cost for similar engineering services contracts within the Department of Defense?

Benchmarking the cost of engineering services is complex due to the wide variety of services, contract types, and performance periods. However, for large-scale, long-term engineering support contracts within the Department of Defense, a $43.8 million award over approximately six years (February 2015 to May 2021) is within a plausible range, especially for specialized or sole-source requirements. Without knowing the exact scope, complexity, and criticality of the services provided by CAE USA, INC., a direct cost comparison is difficult. Generally, competitive bids help establish market rates, and sole-source awards may command a premium if justified by unique capabilities or urgent needs.

What were the justifications for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justifications for such an award are typically documented by the procuring agency and often involve reasons like: only one responsible source being available, urgent and compelling needs that preclude competition, or specific national security requirements. For a contract of this magnitude and duration, the justification would likely detail why other potential contractors could not meet the Navy's requirements, potentially due to proprietary technology, unique expertise, or existing system integration needs that only CAE USA, INC. could fulfill.

How does the duration of this contract (2303 days) compare to typical engineering services contracts?

A contract duration of 2303 days, which is approximately 6.3 years, is considered a long-term engagement for engineering services. While many engineering contracts are shorter-term, focused on specific project phases or deliverables, longer durations are common for ongoing support, sustainment, research and development, or complex system integration efforts. For a large federal agency like the Department of the Navy, securing long-term engineering support through a single contract can offer stability, continuity, and potentially cost savings through economies of scale compared to multiple short-term procurements. However, such long durations also necessitate robust oversight to ensure continued value and relevance.

What is the significance of the 'Firm Fixed Price' contract type for this award?

The 'Firm Fixed Price' (FFP) contract type is significant because it places the primary risk of cost overruns on the contractor, CAE USA, INC. This means the contractor agrees to a set price for the defined scope of work, regardless of their actual costs incurred. For the government, this provides budget certainty and predictability, as the total cost is known upfront. This is advantageous for managing large budgets and avoiding unexpected cost increases. However, FFP contracts require a very clear and detailed statement of work to prevent disputes over scope and to ensure the contractor is not incentivized to cut corners on quality to meet the fixed price.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6134014R2429

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc (UEI: 202131454)

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,151,756

Exercised Options: $43,816,384

Current Obligation: $43,816,384

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline