DoD's $28.8M contract for naval systems instruments awarded via sole-source justification

Contract Overview

Contract Amount: $28,860,801 ($28.9M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2021-02-15

Contract Duration: 509 days

Daily Burn Rate: $56.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TURRET 45000-49 YEAR 2 - NORWAY LOT 10

Plain-Language Summary

Department of Defense obligated $28.9 million to CANADIAN COMMERCIAL CORPORATION for work described as: TURRET 45000-49 YEAR 2 - NORWAY LOT 10 Key points: 1. Contract awarded to Canadian Commercial Corporation, raising questions about competition and potential value. 2. Sole-source award suggests limited market research or specific justification for excluding other vendors. 3. The contract duration of 509 days is relatively short, indicating a specific, potentially urgent need. 4. The product service code (PSC) for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing points to specialized equipment. 5. Firm Fixed Price contract type offers cost certainty but may limit flexibility if requirements change. 6. No small business set-aside was applied, indicating potential missed opportunities for smaller enterprises.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The award to a foreign commercial corporation without a competitive process raises concerns about whether the government secured the best possible price. Without competitive bids, it's difficult to assess if the $28.8 million represents fair market value for the specified naval systems instruments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is not detailed in the provided data, but typically sole-source awards occur when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for multiple bidders to offer proposals, potentially impacting price discovery and the government's ability to secure the most advantageous terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding. This can also limit innovation by not engaging a broader range of potential suppliers.

Public Impact

The primary beneficiaries are likely the Department of the Navy, which will receive the specified naval systems instruments. The contract delivers critical equipment for search, detection, navigation, guidance, and related systems, essential for naval operations. The geographic impact is primarily within the Department of the Navy's operational areas, though the equipment itself may be manufactured or sourced internationally. Workforce implications are unclear but could involve personnel for installation, maintenance, or operation of the new systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential cost savings.
Lack of competition may result in a higher price than a competed contract.
Award to a foreign entity may introduce complexities in supply chain management or oversight.

Positive Signals

Firm Fixed Price contract provides cost certainty for the awarded amount.
Contract addresses specific needs within naval systems, potentially enhancing operational capabilities.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area of defense manufacturing. The market for such systems is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending benchmarks are difficult to establish without more specific details on the instruments, but defense spending in this category is significant globally.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it appear to involve significant subcontracting opportunities for small businesses based on the information provided. The award to a foreign commercial corporation further suggests that the primary focus was not on engaging the U.S. small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the delivery order terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Navigation Systems
Defense Instrumentation
Maritime Surveillance Technology
Aeronautical and Nautical Instruments

Risk Flags

Sole Source Justification
Potential Lack of Competition
Limited Public Data on Specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to CANADIAN COMMERCIAL CORPORATION. TURRET 45000-49 YEAR 2 - NORWAY LOT 10

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 $28.9 million.

What is the period of performance?

Start: 2019-09-25. End: 2021-02-15.

What specific naval systems instruments are being procured under this contract?

The provided data indicates the contract is for 'TURRET 45000-49 YEAR 2 - NORWAY LOT 10' and falls under the Product Service Code (PSC) NA, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' However, the exact specifications, models, or functionalities of the 'TURRET 45000-49' instruments are not detailed. These likely pertain to specialized equipment used in naval operations for functions such as targeting, navigation, or surveillance, possibly for a specific platform or system upgrade.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED' and awarded via a 'DELIVERY ORDER' under a sole-source justification. While the specific reason is not provided, common justifications for sole-source awards include: only one responsible source exists to meet the requirement, urgent and compelling need where delays associated with competitive procurement would cause unacceptable delays, or specific national security concerns. Without further documentation from the Department of the Navy, the precise rationale remains unknown, but it implies that a competitive process was deemed inappropriate or impossible for this procurement.

What is the track record of the Canadian Commercial Corporation (CCC) in supplying similar defense systems to the U.S. Navy?

The Canadian Commercial Corporation (CCC) acts as a government-to-government contracting organization, facilitating international sales for Canadian companies. While CCC has a history of facilitating defense procurements for various governments, including the U.S., specific details on their track record with the U.S. Navy for 'TURRET 45000-49' type systems are not readily available in this dataset. CCC's role is often as an intermediary, so the performance would ultimately depend on the capabilities of the underlying Canadian supplier they represent for this contract.

How does the $28.8 million contract value compare to similar procurements for naval systems instruments?

Direct comparison of the $28.8 million contract value is difficult without knowing the exact specifications and quantity of the 'TURRET 45000-49' instruments. However, given the sole-source nature and the specialized field of naval systems, this amount could represent a fair price for unique or highly technical equipment. Typically, competitive bids would provide a clearer benchmark. The duration of approximately 1.5 years (509 days) suggests a significant scope of work or supply, making the total value plausible for specialized defense hardware.

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

The primary risks of a sole-source award include potential overpayment due to lack of price competition, reduced innovation from not engaging a wider market, and a lack of transparency in the procurement process. For taxpayers, this means a higher likelihood of not achieving the best value. There's also a risk that the chosen contractor may not be the most capable or efficient provider, although the government presumably vetted the CCC. The reliance on a single source can also create supply chain vulnerabilities if issues arise with the contractor or their suppliers.

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

Historical spending patterns for the PSC NA by the Department of the Navy are substantial, reflecting the critical nature of these systems for naval operations. While specific figures for 'TURRET 45000-49' or similar items are not detailed here, the Navy consistently invests billions annually in navigation, detection, and guidance systems across various platforms (ships, aircraft, submarines). This includes research, development, procurement, and sustainment. The $28.8 million contract represents a fraction of the Navy's overall budget allocation to this broad category of essential defense technology.

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

Solicitation ID: N6833517R0243

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Government of Canada (UEI: 241015486)

Address: 350 ALBERT ST SUITE 700, OTTAWA

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

Financial Breakdown

Contract Ceiling: $28,860,801

Exercised Options: $28,860,801

Current Obligation: $28,860,801

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: N6833518D0025

IDV Type: IDC

Timeline