Department of Defense awards $207.8M contract for ammunition, with Canadian Commercial Corporation as the sole provider

Contract Overview

Contract Amount: $71,362,749 ($71.4M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2006-05-04

End Date: 2009-07-03

Contract Duration: 1,156 days

Daily Burn Rate: $61.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!600832!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0148 !A!N! !N! ! !20060504!20070928!207884594!207884594!241015486!N!CANADIAN COMMERCIAL CORPORATIO!50 O CONNOR ST STE 1100 !OTTAWA !CA! !00000! !CA! ! !CANADA !+000021306615!N!N!000021306615!1320!AMMUNITION, OVER 125 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !325920!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1G!Z!N!A!B!CA!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $71.4 million to CANADIAN COMMERCIAL CORPORATION for work described as: 200608!600832!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0148 !A!N! !N! ! !20060504!20070928!207884594!207884594!241015486!N!CANADIAN COMMERCIAL CORPORATIO!50 O CONNOR ST STE 1100 !OTTAWA !CA! !00000! !CA! ! … Key points: 1. Contract awarded on a sole-source basis, raising questions about competition and potential cost savings. 2. Significant portion of the contract value ($61.7M) was awarded to a single vendor, indicating limited market participation. 3. The contract's duration of 1156 days suggests a long-term need for these specific ammunition types. 4. Ammunition, Over 125mm is a critical component for military operations, highlighting the strategic importance of this procurement. 5. The contract falls under the 'Ammunition' product service code, aligning with broader defense procurement trends in this category. 6. The absence of small business set-asides suggests this procurement was not structured to benefit smaller enterprises.

Value Assessment

Rating: questionable

The contract value of $207.8 million for ammunition is substantial. Without comparable sole-source contracts or detailed cost breakdowns, it is difficult to definitively assess value for money. The lack of competition inherently limits the ability to benchmark pricing against market rates or other potential suppliers. The awarded amount of $61.7 million to the primary vendor, Canadian Commercial Corporation, represents a significant portion of the total, suggesting a concentrated relationship that may not reflect the most competitive pricing achievable in a broader market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Canadian Commercial Corporation, was solicited. The data does not indicate any competitive bidding process or the existence of multiple bidders. This approach is typically used when a unique capability or specific requirement can only be met by a single source, or in situations where urgency or national security considerations preclude a full and open competition. The lack of competition means there was no opportunity for price discovery through a bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value for public funds.

Public Impact

The primary beneficiary of this contract is the Department of Defense, specifically the U.S. Army, which will receive critical ammunition supplies. The services delivered include the provision of Ammunition, Over 125mm, essential for various military operations and training exercises. The geographic impact is primarily within the United States, where the ammunition will be utilized by military forces. Workforce implications are likely concentrated within the defense sector and the manufacturing capabilities of the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the selection process due to sole-source nature.
Dependence on a single foreign supplier (Canadian Commercial Corporation) for critical defense materiel.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Ensures a supply of critical ammunition to the Department of Defense.
Contract awarded to a known entity (Canadian Commercial Corporation) which may have established supply chains.
Fixed-price contract type can provide cost certainty for the government.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the manufacturing and supply of ammunition. The North American Industry Classification System (NAICS) code 332993, 'Ammunition (except Small Arms) Manufacturing,' indicates a specialized segment of the industrial base. The total contract value of $207.8 million is significant within this niche, highlighting the substantial investment the Department of Defense makes in maintaining its ordnance capabilities. Comparable spending benchmarks would typically involve analyzing other large-scale ammunition procurements, both domestically and internationally, though sole-source awards make direct comparisons challenging.

Small Business Impact

The data indicates that this contract was not subject to small business set-asides, as indicated by 'sb': false. There is no information provided regarding subcontracting plans or actual performance related to small businesses. This suggests that the procurement was not structured to specifically benefit the small business ecosystem, and opportunities for small business participation were likely minimal or non-existent.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Specific oversight mechanisms would include contract administration by the relevant Army contracting command (TACOM - Picatinny Arsenal). Accountability measures are inherent in the firm fixed-price contract type, which places the cost risk on the contractor. 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

Department of Defense Ammunition Procurement
Army Ordnance Programs
Foreign Military Sales (potential, given Canadian contractor)
Defense Industrial Base Contracts

Risk Flags

Sole-source award
Potential lack of competitive pricing
Foreign supplier dependency
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.4 million to CANADIAN COMMERCIAL CORPORATION. 200608!600832!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0148 !A!N! !N! ! !20060504!20070928!207884594!207884594!241015486!N!CANADIAN COMMERCIAL CORPORATIO!50 O CONNOR ST STE 1100 !OTTAWA !CA! !00000! !CA! ! !CANADA !+000021306615!N!N!000021306615!1320!AMMUNITION, OVER 125 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !325920!E! !3! ! ! ! ! !999

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 $71.4 million.

What is the period of performance?

Start: 2006-05-04. End: 2009-07-03.

What is the track record of Canadian Commercial Corporation in supplying defense materiel to the U.S. Department of Defense?

Canadian Commercial Corporation (CCC) is a Crown corporation of the Canadian government that facilitates international trade for Canadian companies. While CCC itself is not a manufacturer, it acts as a prime contractor, enabling Canadian businesses to supply goods and services to foreign governments, including the U.S. Department of Defense. CCC has a history of facilitating such contracts, often leveraging established relationships and government-to-government agreements. However, specific performance data, quality metrics, and past issues related to CCC's role as a prime contractor for U.S. defense procurements would require a deeper dive into specific contract histories and performance reviews, which are not detailed in the provided data snippet. Its role is primarily that of an intermediary and guarantor, rather than a direct producer.

How does the pricing of this ammunition contract compare to similar procurements, considering it was sole-sourced?

Direct price comparison for this sole-sourced contract is inherently difficult. Sole-source awards bypass the competitive bidding process that typically drives down prices and allows for benchmarking against market rates or other vendors' offerings. Without knowing the specific type and quantity of ammunition, and without access to cost breakdowns or data from competitive contracts for similar items, a precise value-for-money assessment is challenging. The absence of competition means taxpayers may not be receiving the lowest possible price. To conduct a meaningful comparison, one would need to identify similar contracts awarded competitively for the same or comparable ammunition types, or analyze the contractor's cost structure if such data were available through audits or disclosures.

What are the primary risks associated with awarding a large ammunition contract on a sole-source basis to a foreign entity?

Awarding a large ammunition contract solely to a foreign entity like Canadian Commercial Corporation presents several risks. Firstly, there's the risk of supply chain disruption due to geopolitical factors, trade disputes, or issues within the Canadian defense industrial base. Secondly, sole-sourcing limits price competition, potentially leading to higher costs for the U.S. Department of Defense and taxpayers. Thirdly, there's a potential risk to national security if critical munitions become overly dependent on a foreign supplier, impacting readiness and strategic flexibility. Finally, oversight and quality assurance can be more complex when dealing with international suppliers compared to domestic ones, potentially increasing the risk of non-compliance or quality issues.

What is the strategic importance of 'Ammunition, Over 125mm' for the Department of the Army?

Ammunition, Over 125mm, encompasses a range of large-caliber munitions crucial for various combat platforms, including tanks, artillery systems, and naval guns. These rounds are vital for offensive operations, defensive engagements, and suppression of enemy forces. Their availability directly impacts the Army's ability to project power, sustain combat operations, and achieve mission objectives. Procuring these specific types of munitions ensures that the Army maintains the necessary firepower for training, readiness, and deployment, making this contract strategically significant for maintaining combat effectiveness and national security.

What does the contract duration of 1156 days imply about the nature of this procurement?

A contract duration of 1156 days, which is approximately 3 years and 2 months, suggests that this procurement is not for immediate, short-term needs but rather for sustained supply over an extended period. This could indicate a long-term requirement for specific types of ammunition that are consumed regularly in training or are part of ongoing operational stockpiles. Such durations often reflect the planning cycles within the Department of Defense for major equipment and consumables, ensuring a consistent flow of essential materiel. It also implies a stable demand for these particular munitions, possibly linked to specific weapon systems in the Army's inventory.

Are there any indications of potential cost overruns or performance issues based on the provided data?

The provided data snippet does not contain explicit information regarding cost overruns or performance issues. The contract was awarded in 2006 and completed in 2009. The total obligated amount matches the original award amount ($207,884,594), which suggests that, at a high level, the contract was executed within its initially defined financial scope. However, this data does not preclude potential issues that may have arisen during performance, such as delivery delays, quality discrepancies, or disputes that were resolved without impacting the final obligated amount. A comprehensive assessment of performance would require access to contract performance reports, delivery records, and any associated modifications or claims.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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 STE 1100, OTTAWA

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline