DoD awards $31.7M for navigation instruments, with no competition and a long performance period

Contract Overview

Contract Amount: $31,695,960 ($31.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2024-08-12

End Date: 2027-07-30

Contract Duration: 1,082 days

Daily Burn Rate: $29.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NOUN:COMPUTER, FLIGHT CON NSN: 6615-01-668-3654 CMC PN: 100-602542-003

Plain-Language Summary

Department of Defense obligated $31.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: NOUN:COMPUTER, FLIGHT CON NSN: 6615-01-668-3654 CMC PN: 100-602542-003 Key points: 1. The contract's value is significant, but the lack of competition raises concerns about potential overpricing. 2. A single awardee suggests limited market engagement and potentially missed opportunities for cost savings. 3. The extended performance period of over three years could expose the government to price fluctuations. 4. The firm fixed-price contract type offers some cost certainty, but doesn't mitigate the risk of a non-competitive award. 5. Benchmarking against similar contracts is crucial to assess the value for money in this sole-source scenario. 6. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impacts.

Value Assessment

Rating: questionable

The contract value of $31.7 million for navigation instruments appears substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price nature provides some predictability, but the lack of competition means the government may not have secured the best possible price. Further analysis comparing this award to other sole-source procurements for similar equipment is needed to determine if the pricing is reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. The data indicates it was 'NOT COMPETED,' suggesting no other vendors were considered or had the opportunity to bid. This significantly limits price discovery and may indicate a lack of available sources or a specific justification for bypassing the competitive process. The implications for price discovery are that the government likely paid a premium compared to a competitive scenario.

Taxpayer Impact: Taxpayers may have paid more than necessary due to the absence of competitive pressure. This sole-source award bypasses the opportunity to leverage market forces for cost savings.

Public Impact

The Department of Defense will receive critical navigation instruments essential for its operations. This contract supports the Defense Logistics Agency's mission to provide logistical support to the U.S. Armed Forces. The primary beneficiary is the U.S. military, ensuring the availability of vital equipment for national defense. The contract's duration suggests a sustained need for these specific instruments within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Long contract duration increases exposure to market volatility.
Sole-source award limits opportunities for innovation from other vendors.
No indication of small business participation or subcontracting.

Positive Signals

Firm fixed-price contract provides cost certainty for the awarded amount.
Awardee is Canadian Commercial Corporation, potentially indicating a specific international procurement channel.
Contract supports critical defense logistics.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, classified under NAICS code 334511. This industry is characterized by specialized, high-technology manufacturing for defense and aerospace applications. The market size can be substantial, driven by government procurement needs. This specific award represents a portion of the broader defense spending on advanced navigation and guidance systems.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information regarding subcontracting plans. This suggests that the prime contractor, Canadian Commercial Corporation, is expected to fulfill the contract requirements directly or through its own supply chain, with no explicit mandate to engage small businesses. This could limit opportunities for small businesses to participate in this significant defense procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and compliance. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Procurement
Navigation and Guidance Systems
Aerospace and Defense Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.7 million to CANADIAN COMMERCIAL CORPORATION. NOUN:COMPUTER, FLIGHT CON NSN: 6615-01-668-3654 CMC PN: 100-602542-003

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $31.7 million.

What is the period of performance?

Start: 2024-08-12. End: 2027-07-30.

What is the track record of Canadian Commercial Corporation in fulfilling similar defense contracts?

Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that helps Canadian companies obtain government contracts in foreign markets and helps foreign governments procure goods and services from Canada. While CCC itself is not a manufacturer, it facilitates contracts on behalf of Canadian suppliers. Information on CCC's specific track record with navigation instruments or similar defense systems would require examining its past performance on contracts it has facilitated. This would involve looking at contract values, performance reviews, and any reported issues. Without specific contract details facilitated by CCC, it's difficult to assess their direct performance in delivering these types of goods, but their role is primarily as a facilitator and guarantor of Canadian content and quality.

How does the $31.7 million contract value compare to other sole-source procurements for navigation instruments?

Comparing this $31.7 million sole-source contract to other similar procurements is challenging without access to a comprehensive database of sole-source defense contracts for navigation instruments. However, generally, sole-source awards tend to be higher in value than competitively bid contracts for the same goods or services due to the lack of price competition. The duration of the contract (over three years) also contributes to the overall value. To provide a precise comparison, one would need to identify other sole-source awards for comparable navigation systems, factoring in quantity, specifications, and contract length, and then analyze the per-unit costs or total contract values.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of $31.7 million over approximately three years include: 1. **Price Inflation:** Without competition, the contractor has less incentive to offer the lowest possible price, potentially leading to overpayment. 2. **Lack of Innovation:** The government misses out on potential innovations or alternative solutions that other vendors might offer. 3. **Vendor Lock-in:** The government becomes dependent on a single supplier, which can be problematic if that supplier faces production issues, goes out of business, or significantly raises prices in the future. 4. **Performance Risk:** While the contractor is selected, the lack of competitive pressure might indirectly affect the urgency or quality of performance compared to a highly contested bid.

What is the expected effectiveness of these navigation instruments for the Department of Defense?

The effectiveness of these navigation instruments is presumed to be high, given their critical role in military operations. Navigation systems are fundamental for aircraft, vessels, and ground vehicles, ensuring accurate positioning, guidance, and situational awareness. The Department of Defense procures such systems to maintain operational readiness, enhance mission success, and ensure the safety of personnel and assets. The specific effectiveness will depend on the technology's reliability, accuracy, integration capabilities with existing platforms, and suitability for the intended operational environments. The long-term contract suggests a sustained and critical need for these capabilities.

What are the historical spending patterns for navigation instruments by the Defense Logistics Agency?

Historical spending patterns for navigation instruments by the Defense Logistics Agency (DLA) would likely show consistent procurement of such systems to support various branches of the military. DLA's role is to provide logistics support, which includes procuring and distributing a wide range of equipment, including critical components like navigation systems. Spending in this category can fluctuate based on modernization programs, operational tempo, and the lifecycle of existing equipment. Analyzing past DLA spending data would reveal trends in the types of navigation systems procured, the average contract values, and the prevalence of competitive versus sole-source awards over time. This specific $31.7 million award needs to be viewed within that broader spending context.

Are there any specific justifications or requirements that necessitate a sole-source award for these navigation instruments?

Sole-source awards are typically justified when only one responsible source can satisfy the agency's needs. For navigation instruments, this could be due to highly specialized technology, unique compatibility requirements with existing platforms, proprietary designs, or a lack of market availability from other vendors. The Canadian Commercial Corporation's involvement might also point to specific international agreements or procurement channels that limit competition. Without the specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), it's impossible to know the precise reasons. However, such justifications must meet strict federal acquisition regulations.

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: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRRA124R0012

Offers Received: 1

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: $31,695,960

Exercised Options: $31,695,960

Current Obligation: $31,695,960

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline