DoD's $45M hardware delivery order to Canadian Commercial Corporation raises questions on competition and value

Contract Overview

Contract Amount: $45,004,979 ($45.0M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2021-06-16

End Date: 2023-03-31

Contract Duration: 653 days

Daily Burn Rate: $68.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRILOS DELIVERY ORDER TO PROCURE HARDWARE ITEMS PE0C3T NETMOD

Plain-Language Summary

Department of Defense obligated $45.0 million to CANADIAN COMMERCIAL CORPORATION for work described as: TRILOS DELIVERY ORDER TO PROCURE HARDWARE ITEMS PE0C3T NETMOD Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (653 days) suggests a significant need for the hardware items. 3. The use of a delivery order under a larger framework indicates a pre-existing relationship or procurement vehicle. 4. The specific hardware procured falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing NAICS code. 5. The fixed-price contract type aims to control costs, but the lack of competition hinders true value assessment. 6. The awarding agency is the Department of Defense, with the Department of the Army as the specific service. 7. The contractor, Canadian Commercial Corporation, is a foreign entity, which may have implications for domestic industry support.

Value Assessment

Rating: questionable

Benchmarking the value of this $45 million delivery order is challenging due to the lack of competitive bidding. Without multiple offers, it's difficult to ascertain if the price reflects fair market value or if a more advantageous price could have been secured through a competitive process. The fixed-price nature of the contract provides some cost certainty, but the absence of competition prevents a robust assessment of cost-effectiveness compared to potential alternatives or market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source or limited competition procurement. This approach bypasses the standard competitive bidding process, which typically involves soliciting offers from multiple vendors. The lack of competition means that the government did not explore alternative sources or leverage a bidding war to drive down prices, potentially leading to a higher cost than if it had been fully competed.

Taxpayer Impact: Taxpayers may have paid a premium for these hardware items due to the absence of competitive pressure. The government missed an opportunity to secure the best possible price and value through open market exploration.

Public Impact

The Department of the Army benefits from the procurement of essential hardware items for its operations. The services delivered include the provision of specific hardware related to wireless communications equipment. The geographic impact is primarily within the Department of Defense's operational areas, though the supplier is Canadian. Workforce implications are likely minimal for domestic US workers, given the foreign contractor, but may impact the Canadian workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Awarding to a foreign entity may not align with maximizing domestic industry support or job creation.
Transparency regarding the justification for sole-source award is not detailed in the provided data.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
The contract duration suggests a sustained need, implying the hardware is critical for operations.
The procurement falls under a specific NAICS code, indicating a focused and defined need.

Sector Analysis

This contract falls within the Information Technology and Telecommunications sector, specifically related to wireless communications equipment manufacturing. The market for such equipment is global and highly competitive, with numerous domestic and international manufacturers. The value of this specific contract, $45 million, represents a moderate investment within the broader defense spending landscape for communication hardware. Comparable spending benchmarks would typically involve analyzing other DoD procurements for similar wireless communication hardware, ideally those awarded through competitive processes.

Small Business Impact

The provided data indicates that this contract was not competed and does not specify any small business set-aside or subcontracting requirements. Therefore, there is no direct indication of impact on the small business ecosystem from this specific award. The absence of set-aside provisions suggests that opportunities for small businesses to participate in this particular procurement were likely limited or non-existent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's internal procurement regulations and contract management processes. Accountability measures are inherent in the fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award; further details on the justification for not competing would be necessary for a fuller assessment. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Wireless Communications Equipment
Foreign Military Sales (potential context)
Information Technology Hardware

Risk Flags

Lack of Competition
Potential for Overpricing
Supply Chain Risk (Foreign Supplier)
Limited Transparency on Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.0 million to CANADIAN COMMERCIAL CORPORATION. TRILOS DELIVERY ORDER TO PROCURE HARDWARE ITEMS PE0C3T NETMOD

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 $45.0 million.

What is the period of performance?

Start: 2021-06-16. End: 2023-03-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is a classification for sole-source or limited competition awards. However, the specific justification for this determination is not detailed. Typically, sole-source awards require a documented justification, such as the existence of only one responsible source, an urgent and compelling need that precludes competition, or a specific statutory authority. Without this justification, it is impossible to fully assess the necessity of bypassing the competitive process and its potential impact on cost and value.

How does the pricing of this contract compare to similar hardware procured competitively by the DoD?

Direct comparison of pricing is difficult without knowing the exact specifications of the hardware and without access to data on competitively procured, similar items. The 'NOT COMPETED' status means there was no direct price competition for this specific award. To benchmark, one would need to identify contracts for comparable wireless communication hardware awarded under full and open competition, analyze their unit prices, and adjust for differences in quantity, specifications, delivery timelines, and contractor overhead. This analysis is crucial to determine if the $45 million expenditure represents fair value.

What are the potential risks associated with procuring critical hardware from a foreign commercial corporation?

Procuring critical hardware from a foreign commercial corporation, such as the Canadian Commercial Corporation in this case, can introduce several risks. These may include supply chain vulnerabilities, potential delays due to international shipping or customs, currency exchange rate fluctuations impacting final cost, and challenges in warranty, repair, or technical support. Furthermore, reliance on foreign suppliers for critical defense components can raise national security concerns and may not align with policies aimed at fostering domestic industrial capacity and technological sovereignty.

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

The Canadian Commercial Corporation (CCC) acts as a government-to-government contracting agency for Canada, facilitating international trade for Canadian companies. While CCC itself is a stable entity, its track record in fulfilling defense contracts would depend on the performance of the underlying Canadian suppliers it represents. Information on CCC's past performance, including on-time delivery, quality of goods, and adherence to contract terms for similar hardware procurements, would be essential for a comprehensive risk assessment. This data is not provided here but would typically be available through contract performance databases.

What is the historical spending pattern for this type of hardware within the Department of the Army?

Analyzing historical spending patterns for similar wireless communication hardware within the Department of the Army is key to understanding the context of this $45 million award. This would involve examining past contract awards for comparable equipment, noting the total amounts spent, the frequency of procurements, and the methods of competition used. Significant year-over-year increases or a consistent reliance on sole-source awards for such items could indicate evolving needs, market shifts, or potential inefficiencies in the procurement strategy. Without historical data, it's difficult to assess if this $45 million expenditure is an anomaly or part of a larger trend.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Government of Canada

Address: 350 ALBERT ST SUITE 700, OTTAWA

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

Financial Breakdown

Contract Ceiling: $45,004,979

Exercised Options: $45,004,979

Current Obligation: $45,004,979

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T19D0219

IDV Type: IDC

Timeline