DoD's $21.3M contract for rifle optics saw limited competition, raising value concerns

Contract Overview

Contract Amount: $21,351,500 ($21.4M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2007-02-26

End Date: 2010-11-30

Contract Duration: 1,373 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: STANDARD M145 MACHINE GUN OPTIC

Plain-Language Summary

Department of Defense obligated $21.4 million to CANADIAN COMMERCIAL CORPORATION for work described as: STANDARD M145 MACHINE GUN OPTIC Key points: 1. The contract for rifle optics was awarded under a full and open competition, but with only three bidders, suggesting potential for improved price discovery. 2. The firm-fixed-price contract type provides cost certainty for the government, but the final value may not reflect the lowest possible price due to limited competition. 3. The duration of the contract (1373 days) is substantial, indicating a long-term need for these optics. 4. The awarding agency, Department of the Army, procured these optics through the Canadian Commercial Corporation, an unusual contracting vehicle. 5. The North American Industry Classification System (NAICS) code 333314 points to the optical instrument and lens manufacturing sector. 6. The contract was awarded under the Defense Acquisition category.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific per-unit cost data or comparisons to similar optics procured by other agencies. The total award of $21.3 million over approximately 3.7 years suggests a significant investment. However, the limited number of bidders (3) in a full and open competition raises questions about whether the government achieved optimal pricing. Without more granular data on the specific optic model and its features, it's difficult to definitively assess if the price paid represents good value for money compared to market rates or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. However, only three bids were received. While this indicates some level of competition, a higher number of bidders typically leads to more robust price negotiation and potentially lower costs for the government. The limited number of responsive bidders may suggest market concentration or specific technical requirements that narrowed the field of potential suppliers.

Taxpayer Impact: With only three bidders, taxpayers may have paid a premium compared to a scenario with more robust competition. The government's ability to negotiate the best possible price is diminished when the pool of competing firms is small.

Public Impact

The primary beneficiaries are the soldiers in the Department of the Army who will be equipped with these STANDARD M145 MACHINE GUN OPTICS. The services delivered include the manufacturing and supply of specialized optical equipment essential for military operations. The geographic impact is primarily within the Department of Defense's operational theaters, supporting U.S. military personnel. The contract supports jobs within the optical instrument and lens manufacturing sector, specifically within the winning contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) may have resulted in a higher per-unit cost for the taxpayer.
The use of the Canadian Commercial Corporation as an intermediary adds a layer of complexity and potential cost.
Lack of detailed performance metrics makes it difficult to assess the long-term effectiveness and value of the optics.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Awarded under full and open competition, theoretically allowing for broad market participation.
The optics are essential equipment for military personnel, directly supporting operational readiness.

Sector Analysis

The optical instrument and lens manufacturing sector (NAICS 333314) is a specialized industry that produces a wide range of optical products, from consumer cameras to highly technical scientific and military equipment. The defense sector represents a significant market for specialized optics, including targeting systems, night vision devices, and weapon sights. Spending in this sector can fluctuate based on defense budgets and modernization priorities. Comparable spending benchmarks would involve analyzing other contracts for similar military optics, such as rifle scopes, aiming devices, and advanced targeting pods, across different branches of the military.

Small Business Impact

There is no indication that this contract included small business set-asides. The prime contractor, Canadian Commercial Corporation, is a foreign government entity, and the contract was awarded under full and open competition. Therefore, the direct impact on U.S. small businesses through subcontracting opportunities is not explicitly detailed in the provided data. Further investigation into the prime contractor's subcontracting plan would be necessary to assess any indirect benefits to the small business ecosystem.

Oversight & Accountability

The Department of Defense generally has robust oversight mechanisms for its contracts, including the Defense Contract Audit Agency (DCAA) for financial audits and the Defense Contract Management Agency (DCMA) for contract administration. Inspector General reports may also be relevant if performance issues or fraud were suspected. Transparency is facilitated through contract databases like FPDS-NG, where basic contract information is publicly available. However, the level of detail regarding specific performance metrics and ongoing oversight for this particular contract is not fully discernible from the provided data.

Related Government Programs

Department of Defense Optics Procurement
Army Weapon Systems Support
Canadian Commercial Corporation Contracts
Optical Instrument Manufacturing Contracts
Standard Rifle Optics

Risk Flags

Limited Competition
Unusual Contracting Vehicle (CCC)
Lack of Per-Unit Cost Data
Insufficient Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to CANADIAN COMMERCIAL CORPORATION. STANDARD M145 MACHINE GUN OPTIC

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 $21.4 million.

What is the period of performance?

Start: 2007-02-26. End: 2010-11-30.

What is the specific model of the STANDARD M145 MACHINE GUN OPTIC, and what are its key technical specifications?

The provided data identifies the item as 'STANDARD M145 MACHINE GUN OPTIC' but does not specify the exact model number or detailed technical specifications. The M145 is a 3.4x magnification machine gun optic often used with the M240 family of machine guns. Its specifications typically include a field of view, eye relief, and reticle type. Without more granular information, it's difficult to compare its capabilities or cost-effectiveness against other advanced optical sighting systems available on the market or in development.

How does the per-unit cost of these optics compare to similar systems procured by other military branches or allied nations?

The provided data does not include per-unit cost information, only the total contract value of $21,351,500. To compare per-unit costs, we would need to know the number of units procured under this contract. Furthermore, comparing costs across different procurements requires careful consideration of specifications, features, and the competitive landscape at the time of each award. Without unit counts and detailed specifications, a direct per-unit cost comparison is not feasible. However, the limited competition (3 bidders) suggests that the achieved price might be higher than if a more robust bidding process had occurred.

What was the rationale for awarding this contract through the Canadian Commercial Corporation instead of directly through a U.S. agency?

The use of the Canadian Commercial Corporation (CCC) as an intermediary for this Department of Defense contract is unusual. CCC is a Canadian Crown corporation that facilitates government procurement. Its involvement might stem from specific international agreements, unique sourcing requirements, or a desire to leverage CCC's expertise in certain markets or product categories. Without further documentation or context from the Department of the Army, the precise rationale remains unclear. It could potentially streamline certain cross-border transactions or fulfill specific treaty obligations, but it also adds a layer of complexity and potentially cost compared to a direct U.S. federal procurement.

What is the track record of the Canadian Commercial Corporation in managing defense contracts of this nature?

The Canadian Commercial Corporation (CCC) has a long history of facilitating procurement for various government departments, including defense. Its mandate is to assist Canadian businesses in winning government contracts both domestically and internationally, and to help Canadian government departments procure goods and services. While CCC's primary focus is often on supporting Canadian industry, it does engage in facilitating procurements for allied nations. Its track record generally involves navigating complex international procurement regulations and ensuring compliance. Specific performance metrics or detailed case studies related to its management of U.S. Department of Defense contracts for optics would require a deeper dive into CCC's operational history and relevant defense procurement databases.

Were there any performance issues or contract modifications during the period of performance (2007-2010)?

The provided data indicates the contract was awarded on February 26, 2007, and ended on November 30, 2010, with a duration of 1373 days. There is no information within the provided data snippet regarding contract modifications, performance issues, or disputes that may have occurred during this period. Typically, such details would be found in more comprehensive contract files, modification logs, or performance review reports maintained by the contracting agency. Without access to these records, it's impossible to assess the contract's execution beyond its basic award terms.

How does the total spending on rifle optics by the Department of Defense compare to this specific contract's value?

The provided data focuses solely on this single contract for STANDARD M145 MACHINE GUN OPTICS, valued at $21.35 million. To understand how this compares to the Department of Defense's (DoD) total spending on rifle optics, one would need to access broader DoD procurement data. This would involve aggregating spending across all branches (Army, Navy, Air Force, Marines) for similar items, potentially using keywords like 'rifle scope,' 'optic sight,' 'targeting system,' and relevant NAICS codes. This single contract represents a portion of the DoD's investment in optical equipment, but its relative significance can only be determined by analyzing the entirety of related spending.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

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

Financial Breakdown

Contract Ceiling: $21,351,500

Exercised Options: $21,351,500

Current Obligation: $21,351,500

Contract Characteristics

Cost or Pricing Data: NO

Timeline