DoD awards $40M engineering services contract to CAE USA INC. for MH-60R ROKN TOFT

Contract Overview

Contract Amount: $39,999,866 ($40.0M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2023-03-01

End Date: 2027-07-06

Contract Duration: 1,588 days

Daily Burn Rate: $25.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MH-60R ROKN TOFT

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to CAE USA INC. for work described as: MH-60R ROKN TOFT Key points: 1. Contract awarded for specialized engineering services related to the MH-60R helicopter program. 2. The contract duration spans over four years, indicating a significant, long-term need. 3. Engineering services are critical for maintaining and upgrading complex defense systems. 4. The award is a definitive contract, suggesting a well-defined scope of work. 5. The fixed-price nature of the contract aims to control costs for the government. 6. The specific nature of the 'ROKN TOFT' suggests a foreign military sales or cooperative development component.

Value Assessment

Rating: fair

The contract value of $39,998,666 for engineering services over approximately 4 years appears to be within a reasonable range for specialized defense systems support. Benchmarking against similar complex engineering services contracts for naval aviation platforms would provide a clearer picture of value for money. Without specific deliverables or labor categories, a precise comparison is difficult, but the scale suggests a substantial project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, CAE USA INC., was deemed capable of fulfilling the specific requirements. This often occurs when specialized knowledge, proprietary technology, or unique expertise is required, as might be the case with specific helicopter systems or foreign military sales configurations. The lack of competition means the government did not benefit from price discovery through multiple bids.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. The government must rely on its negotiation skills and internal cost estimates to ensure a fair price.

Public Impact

The primary beneficiary is the Republic of Korea Navy (ROKN), which will receive enhanced capabilities or support for its MH-60R Seahawk helicopters. The services delivered will likely involve technical expertise, design, integration, or sustainment engineering for the MH-60R platform. The geographic impact is primarily within Florida, where the contractor is located, but the ultimate impact is on the ROKN's operational readiness. This contract supports specialized engineering roles, potentially impacting a skilled workforce in the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to lack of competition.
Dependence on a single contractor for critical MH-60R support.

Positive Signals

Award to an established contractor with likely relevant expertise in aviation systems.
Definitive contract provides a clear framework for services.
Firm Fixed Price contract aims to provide cost certainty.
Long-term duration suggests a sustained need and potential for stable support.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for naval aviation platforms. The MH-60R Seahawk is a critical multi-mission helicopter used by several navies globally. The market for specialized engineering and sustainment services for such platforms is competitive, but often requires specific certifications and expertise, leading to sole-source awards in certain niche areas. Comparable spending benchmarks would likely be found within other foreign military sales or direct commercial sales contracts for similar helicopter support.

Small Business Impact

The contract indicates that small business participation was not a primary consideration, as the award is not set aside for small businesses and the prime contractor is CAE USA INC., a large entity. There is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary focus was on securing specialized engineering capabilities, and the impact on the small business ecosystem may be indirect, potentially through opportunities if CAE USA INC. chooses to subcontract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it should have defined milestones and deliverables subject to review. Transparency regarding the sole-source justification and performance metrics would be key indicators of effective oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

MH-60R Seahawk Helicopter Program
Foreign Military Sales (FMS) Program
Naval Air Systems Command (NAVAIR) Contracts
Aerospace Engineering Services
Defense Contractor Support Services

Risk Flags

Sole-source award
Potential for cost overruns
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to CAE USA INC.. MH-60R ROKN TOFT

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 $40.0 million.

What is the period of performance?

Start: 2023-03-01. End: 2027-07-06.

What is the specific nature of the 'ROKN TOFT' requirement, and why was it deemed suitable for a sole-source award?

The 'ROKN TOFT' likely refers to a specific technical or operational support package for the Republic of Korea Navy's (ROKN) MH-60R Seahawk helicopters, possibly related to training, operations, or technology transfer. Sole-source awards are typically justified when a unique capability, proprietary technology, or specialized expertise is required that only one contractor can provide. In this case, CAE USA INC. may possess specific intellectual property, certifications, or a pre-existing relationship with the ROKN or the MH-60R platform's development that makes them the only viable option. The justification for this sole-source award would need to be formally documented by the Department of the Navy, detailing the specific reasons why competition was not feasible or advantageous.

How does the $40 million contract value compare to typical engineering support contracts for similar naval aviation platforms?

The $40 million contract value for engineering services over approximately four years for the MH-60R program appears to be within a reasonable range for specialized defense systems support. However, a precise comparison is challenging without detailed knowledge of the specific services rendered (e.g., design, testing, integration, sustainment), labor rates, and overhead. Contracts for complex aviation platforms can range from a few million to hundreds of millions of dollars depending on scope and duration. Given the MH-60R's advanced capabilities and its role in naval operations, $40 million for dedicated engineering support over this period suggests a significant, but not necessarily excessive, investment. Benchmarking against other MH-60R sustainment contracts or similar support for platforms like the P-8 Poseidon would offer more context.

What are the potential risks associated with a sole-source award for critical engineering services?

The primary risk associated with a sole-source award is the potential for reduced price competition, which can lead to higher costs for the government and taxpayers compared to a competitively awarded contract. There is also a risk of contractor complacency or reduced incentive to innovate and maintain high performance standards when there is no competitive pressure. Furthermore, the government may become overly reliant on a single provider, creating vulnerability if the contractor experiences financial difficulties, undergoes significant changes, or fails to meet performance expectations. Effective contract management, robust oversight, and clear performance metrics are crucial to mitigate these risks.

What is CAE USA INC.'s track record with the Department of Defense and specifically with MH-60R related contracts?

CAE USA INC. is a known entity within the defense sector, particularly recognized for its simulation, training, and aviation systems capabilities. While the provided data specifies this particular contract, CAE has a history of supporting various military aviation programs through training devices, simulators, and integrated systems. Their involvement with the MH-60R platform likely stems from their expertise in helicopter systems and potentially their role in developing training or simulation solutions. A deeper dive into the Federal Procurement Data System (FPDS) or other contract databases would reveal the full extent of their past performance, including the value and nature of previous contracts with the DoD and specific agencies like the Department of the Navy.

What are the implications of this contract for the Republic of Korea Navy's (ROKN) capabilities?

This contract directly supports the ROKN's operational readiness and technological sustainment of its MH-60R Seahawk helicopter fleet. The engineering services provided by CAE USA INC. are likely aimed at ensuring the helicopters remain effective, safe, and up-to-date with necessary modifications or upgrades. This could translate to improved mission capabilities, enhanced reliability, and potentially extended service life for the ROKN's assets. Ultimately, this contract contributes to strengthening the ROKN's maritime security and operational effectiveness in its area of responsibility.

Industry Classification

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

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6134022R0032

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: $39,999,866

Exercised Options: $39,999,866

Current Obligation: $39,999,866

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $9,073,370

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline