DoD's $16.4M AN/GRC-245 Radio Purchase Lacked Competition, Raising Value Concerns

Contract Overview

Contract Amount: $16,366,460 ($16.4M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2009-09-28

End Date: 2014-09-05

Contract Duration: 1,803 days

Daily Burn Rate: $9.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AN/GRC-245 RADIOS

Plain-Language Summary

Department of Defense obligated $16.4 million to CANADIAN COMMERCIAL CORPORATION for work described as: AN/GRC-245 RADIOS Key points: 1. The contract awarded to Canadian Commercial Corporation for radios lacked competition, potentially impacting price discovery. 2. The firm fixed price contract type suggests a defined cost structure, but without competition, optimal pricing is uncertain. 3. The duration of the contract (1803 days) is substantial, increasing the importance of initial price reasonableness. 4. The specific radio system (AN/GRC-245) indicates a need for robust communication equipment within the Department of the Army. 5. The absence of small business set-aside flags suggests this procurement did not prioritize small business participation. 6. The contract's value, while significant, needs to be benchmarked against similar procurements to assess value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this $16.4 million contract is challenging without more specific details on the radios' capabilities and market prices. The lack of competition inherently raises questions about whether the government secured the best possible price. Comparing this to other tactical radio procurements by the Department of Defense would be necessary to determine if the pricing was reasonable. The firm fixed price contract type offers some cost certainty, but the absence of competitive bids means there's no market validation of the price.

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. The data indicates it was 'NOT AVAILABLE FOR COMPETITION,' which suggests specific circumstances, such as a lack of available sources or a national security imperative, prevented a competitive process. This limits the government's ability to leverage market forces to drive down costs and ensure the most innovative solutions are considered.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall expenditures for this equipment.

Public Impact

The primary beneficiaries are the Department of the Army, which receives critical radio communication equipment. The contract delivers essential wireless communications hardware for military operations. The geographic impact is likely global, supporting deployed military personnel. Workforce implications are primarily within the contractor's organization and potentially supporting industries involved in radio manufacturing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to suboptimal pricing.
Sole-source award limits transparency and market validation.
Contract duration of nearly five years increases risk associated with price changes or technological obsolescence.

Positive Signals

Firm fixed price contract provides cost certainty for the awarded amount.
Award to Canadian Commercial Corporation suggests a potential intergovernmental agreement, which can sometimes streamline procurement.
The specific equipment (AN/GRC-245 radios) indicates a focus on essential operational capabilities.

Sector Analysis

This contract falls within the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector. This industry is characterized by rapid technological advancement and significant R&D investment. The Department of Defense is a major consumer of such equipment, often requiring specialized, ruggedized, and secure communication systems. Benchmarking this contract's value would involve comparing it to other government or commercial procurements of similar tactical radio systems, considering factors like frequency range, power output, encryption capabilities, and durability.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it mention subcontracting plans specifically aimed at small businesses. This suggests that the procurement was not structured to prioritize or encourage small business participation. Consequently, the direct impact on the small business ecosystem for this specific award appears minimal, with opportunities likely concentrated among larger or foreign entities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight bodies. The Inspector General's office may conduct audits or investigations into contract performance and pricing, particularly if concerns arise. Transparency is limited due to the sole-source nature of the award; however, contract award data is generally available through public databases like FPDS.

Related Government Programs

Tactical Radio Systems Procurement
Department of Defense Communications Equipment
Wireless Communications Manufacturing
Canadian Commercial Corporation Contracts

Risk Flags

Lack of Competition
Sole-Source Award
Potential for Overpricing
Technology Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 million to CANADIAN COMMERCIAL CORPORATION. AN/GRC-245 RADIOS

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 Army).

What is the total obligated amount?

The obligated amount is $16.4 million.

What is the period of performance?

Start: 2009-09-28. End: 2014-09-05.

What is the specific capability and intended use of the AN/GRC-245 radios procured under this contract?

The AN/GRC-245 is a family of tactical vehicular radios designed for secure voice and data communications in mobile military environments. These radios typically operate in the VHF/UHF frequency bands and are built to withstand harsh battlefield conditions. They are crucial for maintaining command and control between ground units, vehicles, and command posts. The specific variant and configuration procured by the Department of the Army would dictate its precise capabilities, such as encryption levels, data throughput, and interoperability with other systems. The $16.4 million award suggests a significant quantity or a specialized configuration of these essential communication assets.

How does the $16.4 million contract value compare to similar tactical radio procurements by the DoD?

Direct comparison is difficult without knowing the exact quantity, specific model variants, and included accessories or services for this $16.4 million contract. However, tactical radio systems can range widely in price. Simpler, lower-power radios might cost a few thousand dollars each, while advanced, secure, multi-band systems with encryption and data capabilities could cost tens of thousands per unit. If this contract represents, for example, 500 units, the average unit price would be around $32,700. This figure needs to be benchmarked against other DoD procurements of comparable AN/GRC-245 variants or similar tactical vehicular radio systems to assess value. The lack of competition makes this benchmarking even more critical.

What are the potential risks associated with awarding a nearly five-year contract for radio equipment on a sole-source basis?

Awarding a contract for nearly five years (1803 days) on a sole-source basis carries several risks. Firstly, the lack of competition means the government may have overpaid compared to what a competitive process could have yielded. Secondly, technology in the wireless communications sector evolves rapidly; by the end of the contract term, the procured radios might be nearing obsolescence or be less capable than newer market offerings, potentially requiring premature replacement. Thirdly, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single supplier, which can create dependency and limit future flexibility. Finally, without competitive pressure, there might be less incentive for the contractor to proactively manage costs or offer superior service throughout the contract's life.

What does the 'NOT AVAILABLE FOR COMPETITION' status imply about the justification for this sole-source award?

The 'NOT AVAILABLE FOR COMPETITION' status typically implies that the contracting agency determined, based on specific criteria outlined in federal acquisition regulations (FAR), that a competitive bidding process was not feasible or appropriate. Common justifications include: only one responsible source exists (e.g., unique technology, patent rights), or the agency must procure the supplies or services from another agency and that agency enters into a sole-source contract, or in rare cases, for reasons of national security or urgent and compelling need where competition would cause unacceptable delays. The specific justification would have been documented by the Department of the Army at the time of the award.

What is the track record of Canadian Commercial Corporation (CCC) as a DoD contractor, particularly for communication equipment?

Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates government-to-government contracting for Canadian goods and services. They act as an intermediary, often leveraging intergovernmental agreements. While CCC has a broad history of contracting with the U.S. Department of Defense across various categories, their specific track record for AN/GRC-245 radios or similar complex communication equipment would need detailed examination. Their role is typically to ensure Canadian content and manage the contractual relationship, rather than direct manufacturing. Performance history would depend on the specific projects they've managed and the performance of the underlying Canadian suppliers.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15P7T09RD256

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: $16,366,460

Exercised Options: $16,366,460

Current Obligation: $16,366,460

Contract Characteristics

Cost or Pricing Data: NO

Timeline