DoD Awards $37.7M for NSF-3 Phase I to CAE USA INC., No Competition

Contract Overview

Contract Amount: $37,694,646 ($37.7M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-26

End Date: 2025-01-31

Contract Duration: 1,954 days

Daily Burn Rate: $19.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NSF-3 PHASE I

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $37.7 million to CAE USA INC. for work described as: NSF-3 PHASE I Key points: 1. Significant contract value of $37.7 million awarded. 2. Sole-source award indicates potential lack of competitive pressure. 3. Long contract duration of 1954 days (over 5 years) raises concerns about flexibility and potential cost overruns. 4. The 'Other Commercial and Service Industry Machinery Manufacturing' sector is broad, making specific benchmarks difficult without more detail.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can incentivize contractors to increase costs to maximize their fixed fee. Without a competitive bidding process, it's difficult to assess if the $37.7 million price is reasonable compared to similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning only one source was solicited. This limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for a contract of this magnitude means taxpayers may not be receiving the best possible value for their investment.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long contract duration could lock the government into a potentially suboptimal solution. Lack of transparency in the sole-source award process can erode public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Contract awarded to a specific company for a defined period.

Sector Analysis

The contract falls under 'Other Commercial and Service Industry Machinery Manufacturing,' a broad category. Without more specific details on the 'NSF-3' system or service, it's challenging to provide precise sector benchmarks. However, large sole-source contracts in specialized manufacturing can often be subject to higher costs.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false, sb: false). Therefore, there is no direct benefit to small businesses from this specific award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the justification for not competing the contract was sound and that the pricing is fair and reasonable.

Related Government Programs

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

Risk Flags

Sole-source award lacks competitive pressure.
Cost Plus Fixed Fee contract type can incentivize cost increases.
Long contract duration (1954 days) increases risk of cost overruns and inflexibility.
Lack of transparency in procurement process.
Potential for taxpayer overpayment due to non-competitive award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.7 million to CAE USA INC.. NSF-3 PHASE I

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 $37.7 million.

What is the period of performance?

Start: 2019-09-26. End: 2025-01-31.

What is the specific nature of the 'NSF-3' system or service being procured, and why was it deemed necessary to sole-source this requirement?

The specific nature of the 'NSF-3' system or service is not detailed in the provided data. The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternative sources. Without further information, it's impossible to assess the validity of these potential justifications and whether they truly preclude competition.

What are the potential risks associated with a Cost Plus Fixed Fee contract type over a 1954-day period for this type of machinery manufacturing?

A Cost Plus Fixed Fee (CPFF) contract can incentivize the contractor to increase costs, as their fixed fee remains constant regardless of the total project cost. Over a long duration like 1954 days, this risk is amplified, potentially leading to significant cost overruns. Without robust government oversight and detailed cost tracking, the government might end up paying substantially more than necessary.

How does the lack of competition impact the government's ability to ensure the effectiveness and value of the procured machinery or service?

The absence of competition significantly hinders the government's ability to ensure effectiveness and value. Without competing bids, there's no market validation of the proposed solution's capabilities or pricing. The government relies solely on the contractor's representations and its own internal assessment, which may be less rigorous than a competitive evaluation process, potentially leading to suboptimal performance or inflated costs.

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: N6134018R0006

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc

Address: 2200 ARLINGTON DOWNS RD, ARLINGTON, TX, 76011

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: $40,778,737

Exercised Options: $37,694,646

Current Obligation: $37,694,646

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $34,530

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6134018D0004

IDV Type: IDC

Timeline