Department of the Army awards $75.8M contract for wireless communications equipment, with limited competition

Contract Overview

Contract Amount: $75,872,493 ($75.9M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2022-02-28

End Date: 2024-03-28

Contract Duration: 759 days

Daily Burn Rate: $100.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERIES OF EQUIPMENT

Plain-Language Summary

Department of Defense obligated $75.9 million to CANADIAN COMMERCIAL CORPORATION for work described as: DELIVERIES OF EQUIPMENT Key points: 1. The contract value of $75.8M for wireless communications equipment appears substantial, warranting a close look at the necessity and efficiency of the spending. 2. The procurement method, identified as 'NOT COMPETED', raises immediate questions about the level of competition and potential impact on pricing. 3. The duration of the contract, spanning over two years, suggests a need for sustained supply or service, but also a long-term commitment of funds. 4. The absence of specific Product Service Codes (PSC) and the broad North American Industry Classification System (NAICS) code for broadcasting equipment manufacturing indicate a need for further clarity on the exact nature of the goods procured. 5. The contract's reliance on a single source, Canadian Commercial Corporation, necessitates an examination of the justification for this approach and its implications for market access for other potential suppliers. 6. The contract type is Firm Fixed Price, which generally offers cost certainty but can limit flexibility if requirements change.

Value Assessment

Rating: questionable

The contract value of $75.8 million for wireless communications equipment is significant. Without specific details on the equipment or services rendered, it is difficult to benchmark against similar contracts. However, the 'NOT COMPETED' status and sole-source nature (via Canadian Commercial Corporation) suggest that a thorough price reasonableness analysis was crucial but may have been constrained. The firm fixed-price structure provides cost certainty, but the lack of competitive bidding raises concerns about whether the government achieved the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis through the Canadian Commercial Corporation, indicating a lack of open competition. The 'NOT COMPETED' designation suggests that either a specific justification for sole-sourcing was accepted, or the procurement was structured in a way that naturally led to a single provider. This limited competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process.

Taxpayer Impact: The lack of competition for this $75.8 million contract means taxpayers may not have received the most cost-effective solution. Without competing offers, there is a risk that the price paid is higher than it would have been in a more open market.

Public Impact

The primary beneficiaries are likely the Department of the Army and its operational units requiring wireless communications equipment. The services delivered include the provision of essential wireless communications hardware and potentially related support, crucial for military operations and command and control. The geographic impact is likely focused on military installations and operational theaters where the Army operates. Workforce implications could include roles in logistics, maintenance, and potentially specialized technical support related to the communication systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award requires strong justification to ensure fair pricing.
Limited transparency into the selection process due to non-competitive nature.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award through Canadian Commercial Corporation may indicate established intergovernmental agreements or specific sourcing needs.
Contract duration suggests a stable and predictable supply chain for critical equipment.

Sector Analysis

The wireless communications equipment sector is a critical component of the broader technology and defense industries. This contract falls under the manufacturing of radio and television broadcasting and wireless communications equipment. The market is characterized by rapid technological advancements and significant investment in research and development. Comparable spending benchmarks would depend heavily on the specific type and quantity of equipment procured, but multi-million dollar contracts are common for military-grade communication systems.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans. Given the sole-source nature and award through a foreign commercial corporation, the direct impact on the U.S. small business ecosystem is likely minimal unless the Canadian Commercial Corporation engages U.S. small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and financial management offices. Transparency is limited due to the sole-source award. Accountability would be managed through contract performance monitoring and adherence to the terms of the Firm Fixed Price agreement. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Communications Systems
Army Tactical Communications
Wireless Network Infrastructure Procurement
Federal Government IT and Communications Contracts

Risk Flags

Sole-source award requires robust justification.
Potential for price non-competitiveness.
Lack of transparency in procurement process.
Dependence on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.9 million to CANADIAN COMMERCIAL CORPORATION. DELIVERIES OF EQUIPMENT

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 $75.9 million.

What is the period of performance?

Start: 2022-02-28. End: 2024-03-28.

What specific type of wireless communications equipment was procured under this contract?

The provided data indicates the contract falls under NAICS code 334220 (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing). However, it does not specify the exact type of equipment. This could range from tactical radios, satellite communication terminals, network infrastructure components, to specialized encrypted communication devices. Understanding the specific equipment is crucial for assessing its necessity, technological relevance, and fair market value. Without this detail, comparisons to other contracts or market rates remain highly speculative.

What was the justification for awarding this contract on a sole-source basis through the Canadian Commercial Corporation?

Sole-source awards typically require a justification, such as a critical need, lack of available sources, or specific intergovernmental agreements. Awarding through the Canadian Commercial Corporation (CCC) suggests a pre-existing relationship or a specific procurement pathway utilized for international cooperation or acquisition. The justification would need to demonstrate why competition was not feasible or advantageous. This could involve unique capabilities held by the supplier facilitated by CCC, or specific treaty obligations. Without the official justification document (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the rationale remains unclear, impacting the assessment of value for money.

How does the $75.8 million contract value compare to historical spending on similar wireless communications equipment by the Department of the Army?

To assess historical spending, one would need to analyze prior contracts for similar wireless communications equipment by the Department of the Army. This would involve searching contract databases for relevant NAICS codes, PSCs, and keywords related to wireless communications over a defined period. Comparing the current $75.8 million award against the average, median, or range of previous awards would indicate if this contract represents an increase, decrease, or is in line with historical trends. Factors like inflation, technological upgrades, and changes in operational requirements would need to be considered in such a comparison.

What are the key performance indicators (KPIs) and delivery schedules outlined in the contract?

The provided data includes a start date (2022-02-28) and an end date (2024-03-28), indicating a duration of approximately 25 months. However, specific Key Performance Indicators (KPIs) related to equipment reliability, performance standards, delivery timelines for individual items, or support service levels are not detailed. These KPIs are essential for evaluating the contractor's performance and ensuring the Army receives the expected value and functionality from the procured wireless communications equipment.

What is the risk profile associated with this contract, considering its sole-source nature and duration?

The primary risks associated with this contract stem from its sole-source nature and significant value. The lack of competition increases the risk of overpayment and potential complacency from the contractor regarding performance and innovation. The two-year duration, while providing stability, also means a substantial commitment of funds that could be difficult to redirect if needs change or issues arise. Risks related to supply chain disruptions, technological obsolescence, and contractor performance are inherent, but are potentially amplified without competitive pressure or alternative sourcing options.

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: $75,872,493

Exercised Options: $75,872,493

Current Obligation: $75,872,493

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