DoD's $23.3M RAST System contract awarded to Canadian Commercial Corporation without competition

Contract Overview

Contract Amount: $23,341,328 ($23.3M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2010-12-07

End Date: 2015-01-30

Contract Duration: 1,515 days

Daily Burn Rate: $15.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RAST SYSTEM

Plain-Language Summary

Department of Defense obligated $23.3 million to CANADIAN COMMERCIAL CORPORATION for work described as: RAST SYSTEM Key points: 1. The contract's value of $23.3 million over its period of performance suggests a significant investment in the RAST system. 2. Awarded without competition, the procurement method raises questions about potential price discovery and market fairness. 3. The duration of the contract (1515 days) indicates a long-term need for the RAST system. 4. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses. 5. The firm fixed-price contract type aims to provide cost certainty for the government. 6. The awarding agency, Department of Defense, highlights the strategic importance of this system for military operations.

Value Assessment

Rating: questionable

Benchmarking the value of this $23.3 million contract is challenging without comparable RAST system procurements. The firm fixed-price nature suggests an attempt at cost control, but the lack of competition prevents a robust assessment of whether the price reflects fair market value. Without competitive bids, it's difficult to ascertain if the government secured the best possible price or if alternative solutions might have offered better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement method, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or when a compelling justification exists for not seeking competition. The lack of multiple bidders means there was no direct price comparison or negotiation against other market participants, potentially limiting the government's ability to achieve the lowest possible price.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the competitive pressure that typically drives down prices.

Public Impact

The primary beneficiaries are likely the Department of the Navy, which received the RAST system, enhancing its operational capabilities. The services delivered include the provision of a RAST (Recovery Assist, Secure and Traverse) system, crucial for aircraft carrier operations. The geographic impact is centered on naval bases and aircraft carriers where the RAST system is deployed. Workforce implications may include training for naval personnel on the operation and maintenance of the new system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competitive award.
Sole-source awards can reduce the incentive for contractors to innovate or offer cost efficiencies.
Limited transparency into the justification for sole-source award could obscure potential issues.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to Canadian Commercial Corporation suggests a specific capability or relationship was leveraged.
The RAST system itself likely provides significant operational benefits to the Navy.

Sector Analysis

The aerospace and defense sector is characterized by complex, high-value procurements. Contracts for specialized systems like RAST are often awarded to a limited number of suppliers due to unique technical requirements and high barriers to entry. The market for such systems is typically niche, with government spending being a primary driver. Comparable spending benchmarks would involve analyzing other large-scale equipment procurements within the naval aviation or defense logistics sub-sectors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned. This suggests that the primary contractor, Canadian Commercial Corporation, was expected to fulfill the contract requirements directly or through its own established supply chains. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's existing procurement regulations and contract management processes. Accountability measures are typically embedded within the firm fixed-price contract terms, focusing on delivery and performance. Transparency is limited by the sole-source nature of the award; however, contract details and performance reports are generally accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Aviation Systems
Aircraft Launch and Recovery Equipment
Defense Logistics and Support Contracts
Canadian Commercial Corporation Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to CANADIAN COMMERCIAL CORPORATION. RAST SYSTEM

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 $23.3 million.

What is the period of performance?

Start: 2010-12-07. End: 2015-01-30.

What is the specific justification provided by the Department of Defense for awarding the RAST system contract to Canadian Commercial Corporation on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded to 'CANADIAN COMMERCIAL CORPORATION'. While the specific justification is not detailed in the abbreviated data, sole-source awards are typically justified under circumstances such as the existence of only one responsible source, urgent and compelling needs where competition is not feasible, or when a specific international agreement or partnership necessitates it. For a system like RAST, it's possible that Canadian Commercial Corporation held unique intellectual property, specialized manufacturing capabilities, or was the sole authorized distributor for a critical component or technology that the Department of Defense required. Further investigation into the Federal Procurement Data System (FPDS) or agency-specific contract award justifications would be necessary to ascertain the precise rationale.

How does the $23.3 million cost of the RAST system compare to similar procurements or industry benchmarks for such equipment?

Directly comparing the $23.3 million cost of this RAST system contract is difficult without more specific details about the system's configuration, capabilities, and the exact quantity procured. The abbreviated data shows a contract duration of 1515 days (approximately 4.15 years) and a firm fixed-price structure. To benchmark this value, one would need to identify comparable contracts for RAST systems or similar aircraft recovery and handling equipment awarded by other defense agencies or international partners. Analyzing the cost per unit, if discernible, and factoring in the contract duration, scope of work (including installation, training, and maintenance), and any technological advancements would be crucial. Given the sole-source nature, it's plausible that the price may not reflect the lowest achievable market rate, making external benchmarking essential for a comprehensive value assessment.

What are the potential risks associated with awarding a contract of this magnitude without competition?

Awarding a $23.3 million contract without competition presents several risks. Firstly, there's the risk of paying a higher price than would be achieved in a competitive environment, as the government lacks the leverage of multiple bids to drive down costs. Secondly, a lack of competition can reduce the incentive for the sole-source provider to innovate or improve efficiency, potentially leading to suboptimal performance or higher lifecycle costs. Thirdly, it raises concerns about transparency and fairness in the procurement process. Without a competitive bidding process, it can be harder to ensure that the chosen contractor is truly the best value option available, or that the government's needs are being met in the most effective way possible. Finally, it may limit opportunities for other capable suppliers to enter the market or demonstrate their capabilities.

What is the expected operational impact or benefit of the RAST system for the Department of the Navy?

The RAST (Recovery Assist, Secure and Traverse) system is designed to significantly enhance the efficiency and safety of aircraft recovery operations on naval vessels, particularly aircraft carriers. Its primary function is to rapidly and securely bring aircraft from the landing area to a stowed position, often in preparation for the next launch. This system typically automates or streamlines the process of arresting, moving, and securing aircraft, reducing the time aircraft spend on the flight deck and minimizing the manual effort and potential risks for flight deck personnel. For the Department of the Navy, the implementation of an advanced RAST system translates to increased sortie generation rates, improved flight deck safety, and potentially reduced wear and tear on aircraft during recovery. The $23.3 million investment suggests a critical need for these operational improvements.

What does the contract type (Firm Fixed Price) imply about the government's risk and the contractor's obligations?

A Firm Fixed Price (FFP) contract type signifies that the contractor agrees to a total price that is not subject to adjustment based on the contractor's cost experience in performing the contract. This places the majority of the cost risk on the contractor. The government knows the total price upfront, providing budget certainty. The contractor is obligated to complete the work for the agreed-upon price, regardless of whether their actual costs exceed that amount. If the contractor performs the work for less than the fixed price, they retain the difference as profit. This contract type is generally preferred by the government for supplies and services where the requirements are well-defined and stable, as it incentivizes the contractor to control costs and manage performance efficiently to maximize their profit margin.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING 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

Parent Company: Government of Canada (UEI: 241015486)

Address: 50 O'CONNOR ST SUITE 1100, OTTAWA

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

Financial Breakdown

Contract Ceiling: $23,341,328

Exercised Options: $23,341,328

Current Obligation: $23,341,328

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $70,023,984

Contract Characteristics

Consolidated Contract: Yes

Cost or Pricing Data: NO

Timeline