DoD's $52.2M MX-15HDI TURRET SYSTEM contract awarded to Canadian Commercial Corporation shows limited competition

Contract Overview

Contract Amount: $52,214,575 ($52.2M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2011-08-31

End Date: 2012-08-30

Contract Duration: 365 days

Daily Burn Rate: $143.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MX-15HDI TURRET SYSTEM

Plain-Language Summary

Department of Defense obligated $52.2 million to CANADIAN COMMERCIAL CORPORATION for work described as: MX-15HDI TURRET SYSTEM Key points: 1. The contract's value of $52.2 million for a turret system warrants scrutiny regarding its necessity and cost-effectiveness. 2. Awarded via a non-competitive process, the lack of open bidding raises concerns about potential overpricing and reduced value for taxpayer dollars. 3. The sole awardee, Canadian Commercial Corporation, suggests a narrow field of potential suppliers, potentially limiting innovation and competitive pressure. 4. Performance context is limited without specific delivery details or performance metrics, making it difficult to assess the system's effectiveness. 5. The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, indicating a specialized defense procurement. 6. The absence of small business involvement suggests this procurement did not prioritize opportunities for smaller enterprises within the defense industrial base.

Value Assessment

Rating: questionable

Benchmarking the value of this $52.2 million contract is challenging due to the limited information available on the specific 'MX-15HDI TURRET SYSTEM' and its intended use. Without comparable contract data or detailed technical specifications, it's difficult to definitively assess if the price reflects fair market value. The non-competitive nature of the award further complicates a value-for-money assessment, as the absence of bidding may have led to a higher price than could have been achieved through a competitive process. Further analysis would require understanding the system's capabilities and comparing it to similar technological solutions in the defense market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition to solicit bids from multiple vendors. The specific justification for this sole-source award is not provided in the available data. Sole-source procurements can occur for various reasons, such as when only one vendor possesses the necessary technology, expertise, or when urgent needs preclude a competitive process. However, this approach typically results in less price discovery and potentially higher costs for the government compared to fully competed contracts.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to a less efficient use of public funds.

Public Impact

The primary beneficiaries of this contract are likely the Department of Defense, specifically the Department of the Navy, through the acquisition of advanced turret systems. The services delivered involve the procurement of specialized defense equipment, contributing to the operational capabilities of naval forces. The geographic impact is primarily within the defense sector, supporting military readiness and potentially involving integration into naval platforms. Workforce implications are likely concentrated within the defense manufacturing and technology sectors, potentially involving specialized engineering and production roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for other qualified vendors.
Limited public information makes it difficult to assess value for money.
Absence of small business set-aside raises concerns about equitable distribution of contracts.

Positive Signals

Procurement of specialized defense technology enhances military capabilities.
Award to Canadian Commercial Corporation may indicate a specific strategic partnership or capability.
Firm Fixed Price contract type provides cost certainty for the government.

Sector Analysis

The procurement of the MX-15HDI TURRET SYSTEM falls within the broader defense industry, specifically the manufacturing of specialized electronic and navigational equipment. This sector is characterized by high technological barriers to entry, significant research and development investment, and often involves close collaboration between government agencies and a select group of contractors. The market size for such specialized defense systems can be substantial, driven by ongoing modernization efforts and evolving threat landscapes. This contract represents a specific instance of the Department of Defense acquiring advanced sensor or targeting technology.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by the 'sb' field being false. Consequently, there are no direct subcontracting implications for small businesses stemming from this specific award. The absence of a small business set-aside means that opportunities for small businesses to participate in this particular procurement were not prioritized, potentially limiting their access to this segment of the defense market.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's existing procurement regulations and contract management processes. Accountability measures would be tied to the terms of the Firm Fixed Price contract, ensuring delivery of the specified turret system. Transparency is limited due to the sole-source nature of the award and the lack of detailed public documentation regarding the justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the procurement or execution phases.

Related Government Programs

Defense Procurement
Naval Systems
Sensor Technology
Guidance Systems Manufacturing
Aeronautical and Nautical Instrument Manufacturing

Risk Flags

Sole-source award
Lack of competition
Limited transparency
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.2 million to CANADIAN COMMERCIAL CORPORATION. MX-15HDI TURRET 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 $52.2 million.

What is the period of performance?

Start: 2011-08-31. End: 2012-08-30.

What is the specific function and technical capability of the MX-15HDI TURRET SYSTEM?

The MX-15HDI TURRET SYSTEM is a sophisticated piece of defense equipment, likely designed for surveillance, targeting, or reconnaissance applications. While specific technical details are not publicly available for this contract, similar systems often incorporate advanced electro-optical and infrared (EO/IR) sensors, laser designators, and stabilization technologies. These systems are crucial for providing real-time situational awareness and precision targeting capabilities to military platforms, such as aircraft, ground vehicles, or naval vessels. The 'HDI' designation might refer to High Definition imaging capabilities, suggesting advanced visual data acquisition. Its integration into naval assets implies a role in maritime surveillance, threat detection, or engagement.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The provided data indicates the contract was awarded on a 'NOT COMPETED' basis, signifying a sole-source procurement. The specific justification for this sole-source award is not detailed in the available information. Common reasons for sole-source awards include situations where only one responsible source can provide the required supplies or services, such as when a product is proprietary, requires unique expertise, or when urgent and compelling circumstances exist that preclude competition. Without further documentation, it is impossible to ascertain the precise rationale, but it suggests that the Department of the Navy determined that competitive bidding was not feasible or appropriate for this particular acquisition.

What is the track record of the Canadian Commercial Corporation as a defense contractor?

The Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates international trade for Canadian companies. In the defense sector, CCC acts as a government-to-government contracting entity, helping foreign governments procure Canadian defense equipment and services. While CCC itself is not a manufacturer, it has a long history of facilitating significant defense procurements for allies, including the United States. Its track record involves managing complex international contracts, ensuring compliance with export controls, and delivering high-value defense systems. For the US Department of Defense, CCC often serves as a reliable intermediary for acquiring specialized Canadian defense technologies, leveraging its established government-to-government framework.

How does the $52.2 million contract value compare to similar defense procurements for turret systems?

Direct comparison of the $52.2 million contract value for the MX-15HDI TURRET SYSTEM to similar procurements is difficult without more specific details about the system's capabilities, quantity, and intended platform. Defense procurements for advanced sensor and targeting systems can vary widely in cost. However, for a sole-source award of a specialized system, this value is within the range of significant defense contracts. The lack of competition means that a direct benchmark against competitively bid systems is not feasible, and the price may be higher than what could have been achieved in an open market. Further analysis would require identifying comparable systems with similar technological sophistication and intended military applications.

What are the potential risks associated with a sole-source defense contract of this magnitude?

Sole-source defense contracts of this magnitude carry several potential risks. Firstly, the absence of competition can lead to inflated prices, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it limits the government's access to a broader range of technological solutions and potential innovations that might emerge from a competitive bidding process. Thirdly, there's a risk of contractor complacency or reduced performance incentives, as the sole provider may feel less urgency to meet or exceed contract requirements when there are no immediate alternatives. Finally, sole-source awards can sometimes raise concerns about fairness and the efficient use of taxpayer funds, especially if the justification for the sole-source status is not robust.

What is the historical spending pattern for similar 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' procurements by the Department of the Navy

Historical spending patterns for the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' (NAICS 334511) sector by the Department of the Navy are substantial, reflecting the critical role of advanced systems in naval operations. The Navy consistently invests heavily in radar, sonar, navigation systems, targeting pods, and related electronic warfare equipment. Spending in this category often involves complex, high-value contracts, frequently awarded through competitive processes but also including sole-source procurements for specialized or proprietary technologies. Analyzing historical data would reveal trends in technology adoption, key contractors, and average contract values, providing context for the $52.2 million MX-15HDI TURRET SYSTEM award, though specific comparisons are limited by the sole-source nature and unique system details.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: $52,214,575

Exercised Options: $52,214,575

Current Obligation: $52,214,575

Contract Characteristics

Cost or Pricing Data: NO

Timeline