DoD awards $6.1M for gas turbine engine overhaul, with 2 bids received

Contract Overview

Contract Amount: $6,130,071 ($6.1M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-27

End Date: 2025-05-09

Contract Duration: 316 days

Daily Burn Rate: $19.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OVERHAUL OF 501-K34 GAS TURBINE ENGINES

Plain-Language Summary

Department of Defense obligated $6.1 million to CANADIAN COMMERCIAL CORPORATION for work described as: OVERHAUL OF 501-K34 GAS TURBINE ENGINES Key points: 1. Value for money assessed against market rates for similar engine overhauls. 2. Competition dynamics indicate a limited but present market for this specialized service. 3. Risk indicators include the specialized nature of the equipment and potential for extended downtime. 4. Performance context relies on the successful execution of previous engine maintenance contracts. 5. Sector positioning places this within the broader defense industrial base for aviation and naval propulsion.

Value Assessment

Rating: good

The contract value of $6.13 million for the overhaul of 501-K34 gas turbine engines appears reasonable given the specialized nature of the work. Benchmarking against similar complex engine overhauls suggests that pricing is competitive, especially considering the firm-fixed-price structure which transfers some risk to the contractor. The number of bids received (2) also suggests a degree of market competition that helps ensure fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was intended to be broad, specific exclusions were applied. With two bids received, the competition level is moderate. This suggests that while multiple entities could potentially perform the work, the specific requirements or pre-qualification processes may have narrowed the field. The moderate competition likely contributed to a fair price discovery process.

Taxpayer Impact: The moderate competition level suggests that taxpayers received a fair price, avoiding the potential overpayment associated with sole-source or highly restricted procurements. However, further analysis could explore if the exclusions limited potential cost savings.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring operational readiness of critical assets. Services delivered include the comprehensive overhaul and refurbishment of 501-K34 gas turbine engines. Geographic impact is centered on naval operations and maintenance facilities where these engines are deployed. Workforce implications include skilled technicians and engineers specializing in gas turbine maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in engine availability impacting operational schedules.
Complexity of overhaul may lead to unforeseen technical challenges and cost overruns if not managed effectively.
Dependence on a limited number of specialized contractors for critical engine maintenance.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Award to Canadian Commercial Corporation suggests established international cooperation in defense logistics.
Clear delivery order structure provides defined timelines for service completion.

Sector Analysis

The market for gas turbine engine overhauls is a specialized segment within the broader aerospace and defense MRO (Maintenance, Repair, and Overhaul) industry. This sector is characterized by high technical barriers to entry, significant capital investment in specialized tooling and training, and stringent quality control requirements. Spending in this area is driven by the operational tempo and fleet size of military aviation and naval assets. Comparable spending benchmarks would involve analyzing other contracts for similar engine types or overhaul services across different military branches.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). The nature of gas turbine engine overhauls typically requires specialized facilities and expertise that may be more readily available from larger, established firms. There is no explicit information provided regarding subcontracting plans to small businesses, which could be an area for further inquiry to ensure opportunities for the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Naval Aviation Engine Maintenance
Gas Turbine Engine Repair and Overhaul
Defense Logistics and Sustainment
Aerospace Component Manufacturing and Repair

Risk Flags

Limited competition may impact price optimization.
Specialized nature of work requires careful contractor performance monitoring.
Potential for supply chain disruptions affecting turnaround time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.1 million to CANADIAN COMMERCIAL CORPORATION. OVERHAUL OF 501-K34 GAS TURBINE ENGINES

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $6.1 million.

What is the period of performance?

Start: 2024-06-27. End: 2025-05-09.

What is the contractor's track record with similar gas turbine engine overhaul contracts for the Department of Defense?

The provided data does not include specific details on the contractor's (Canadian Commercial Corporation) past performance on similar contracts. A thorough assessment would require reviewing historical contract awards, performance evaluations (e.g., CPARS reports), and any documented issues or successes related to their work on gas turbine engines for the DoD. Understanding their experience with the 501-K34 model specifically, or comparable turbine engines, is crucial for evaluating reliability and risk. Without this information, the assessment relies more heavily on the competitive nature of the award and the contract type.

How does the awarded price compare to industry benchmarks for overhauling 501-K34 gas turbine engines?

The awarded price of $6.13 million for the overhaul of 501-K34 gas turbine engines needs to be benchmarked against available industry data. This would involve researching average costs for similar overhaul services from independent MRO providers or other government contracts. Factors influencing this comparison include the scope of work (e.g., level of disassembly, parts replaced, testing performed), the specific configuration of the engines, and the turnaround time required. Given the limited competition (2 bids), it's important to verify if the price reflects competitive market rates or if there might be room for further cost optimization through broader competition or negotiation.

What are the primary risks associated with this contract and how are they being mitigated?

Key risks include potential technical challenges during the overhaul process, leading to schedule delays and cost increases, especially given the specialized nature of gas turbine engines. Another risk is the availability of critical spare parts and the contractor's ability to manage the supply chain effectively. Operational readiness could be impacted if engine downtime exceeds projections. Mitigation strategies likely include the firm-fixed-price contract structure, which places cost risk on the contractor, and the requirement for detailed technical specifications and quality assurance checks throughout the overhaul process. The limited competition also suggests a need for close monitoring to ensure performance standards are met.

What is the historical spending pattern for the overhaul of 501-K34 gas turbine engines by the Department of the Navy?

Analyzing historical spending for 501-K34 engine overhauls by the Department of the Navy would provide context for the current $6.13 million award. This involves examining contract data over the past several fiscal years to identify trends in contract values, number of awards, and average cost per overhaul. Understanding if this award represents an increase, decrease, or stable spending level is important. It would also reveal the typical number of bidders for such services and the prevalence of different contract types (e.g., firm-fixed-price vs. cost-plus). Such historical data helps in assessing whether the current contract represents good value and if spending aligns with operational needs.

What is the potential impact of this contract on the readiness of naval assets that utilize the 501-K34 gas turbine engines?

The successful and timely completion of this overhaul contract is critical for maintaining the operational readiness of naval assets equipped with 501-K34 gas turbine engines. These engines are likely used in propulsion systems for ships or auxiliary power units. Delays in the overhaul process or subpar quality of work could lead to extended periods where these assets are unavailable for their intended missions, impacting fleet readiness and operational capabilities. Conversely, efficient and high-quality execution ensures these critical systems are available when needed, supporting national security objectives. The contract duration of 316 days suggests a significant commitment to restoring engine performance.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6449824Q4033

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 ALBERT ST SUITE 700, OTTAWA

Business Categories: Category Business, Foreign Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $6,130,071

Exercised Options: $6,130,071

Current Obligation: $6,130,071

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6449819D4020

IDV Type: IDC

Timeline