DoD Awards $50.3M for MH60 Trainer O&M to CAE USA, Inc. in Florida

Contract Overview

Contract Amount: $50,354,068 ($50.4M)

Contractor: CAE USA, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-05-01

End Date: 2025-08-31

Contract Duration: 1,948 days

Daily Burn Rate: $25.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR OPERATION AND MAINTENANCE OF MH60 TRAINERS FOR THE ROYAL AUSTRALIAN NAVY IN NOWRA, AUSTRALIA

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $50.4 million to CAE USA, INC. for work described as: CONTRACTOR OPERATION AND MAINTENANCE OF MH60 TRAINERS FOR THE ROYAL AUSTRALIAN NAVY IN NOWRA, AUSTRALIA Key points: 1. Contract awarded for essential MH60 helicopter simulator maintenance. 2. Sole-source award raises questions about price discovery and competition. 3. Long-term contract (5 years) with significant value. 4. Focus on engineering services for critical defense training.

Value Assessment

Rating: fair

The contract value of $50.3M over 5 years for specialized training equipment maintenance appears reasonable given the niche nature of MH60 simulators. However, without competitive bidding, it's difficult to definitively assess if this represents the best possible price.

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 may result in higher costs for taxpayers compared to a competitive process. The justification for sole-source is not provided.

Taxpayer Impact: The lack of competition in this sole-source award potentially leads to higher costs for taxpayers, as there was no market pressure to drive down prices.

Public Impact

Ensures continued readiness and training for the Royal Australian Navy's MH60 helicopter fleet. Supports critical defense capabilities through specialized maintenance services. Impacts the defense sector by maintaining advanced training simulators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Long contract duration may not reflect current market conditions.
No indication of small business participation.

Positive Signals

Ensures critical training capabilities are maintained.
Contract awarded to a known entity in the aerospace training sector.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense training. Spending benchmarks for specialized simulator maintenance are difficult to establish due to the niche nature, but the value is significant for this type of service.

Small Business Impact

The contract data indicates that small business participation was not a factor in this award (ss: false, sb: false). There is no information provided on whether subcontracting opportunities were offered to small businesses.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the pricing is fair and reasonable. Accountability for the justification of not competing the contract should be clearly documented.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of competition
No small business participation indicated
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.4 million to CAE USA, INC.. CONTRACTOR OPERATION AND MAINTENANCE OF MH60 TRAINERS FOR THE ROYAL AUSTRALIAN NAVY IN NOWRA, AUSTRALIA

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 $50.4 million.

What is the period of performance?

Start: 2020-05-01. End: 2025-08-31.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award is typically based on factors like unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's presumed the Department of the Navy determined CAE USA, Inc. was the only source capable of meeting the requirements. Steps to ensure fair pricing might include historical cost analysis or independent government cost estimates, but these are not detailed in the provided data.

What is the potential risk to taxpayer value given the lack of competition for this significant contract?

The primary risk to taxpayer value in a sole-source contract is the absence of competitive pressure, which can lead to inflated prices. Without competing bids, there's no market validation of the cost. This contract's $50.3M value over five years means any price inefficiency could represent a substantial loss of taxpayer funds compared to what might have been achieved through open competition.

How effective is this contract in ensuring the long-term operational readiness of the Royal Australian Navy's MH60 training program?

The contract's effectiveness hinges on CAE USA, Inc.'s ability to provide reliable and high-quality operation and maintenance for the MH60 trainers. Given the long duration and the critical nature of flight simulators for pilot training, the contract is likely effective in maintaining these capabilities. However, the lack of competition means ongoing performance monitoring is crucial to ensure continued effectiveness and value.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $52,800,677

Exercised Options: $50,354,068

Current Obligation: $50,354,068

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $113,904

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline