DoD awards $78.7M contract for 120mm HE/FRPC rounds to Canadian Commercial Corporation

Contract Overview

Contract Amount: $78,684,826 ($78.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2016-02-05

End Date: 2022-11-30

Contract Duration: 2,490 days

Daily Burn Rate: $31.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD BASE CONTRACT FOR THE 120MM HE/FRPC LAP CONTRACT TO CANADIAN COMMERCIAL CORPORATION WHOSE SUBCONTRACTOR IS GENERAL DYNAMICS, CANADA.

Plain-Language Summary

Department of Defense obligated $78.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: AWARD BASE CONTRACT FOR THE 120MM HE/FRPC LAP CONTRACT TO CANADIAN COMMERCIAL CORPORATION WHOSE SUBCONTRACTOR IS GENERAL DYNAMICS, CANADA. Key points: 1. Contract awarded to Canadian Commercial Corporation (CCC) for 120mm ammunition. 2. General Dynamics, Canada is the subcontractor, indicating foreign sourcing for critical defense supplies. 3. The contract value of $78.7M over approximately 2490 days suggests a significant investment in ammunition. 4. The sector is Ammunition Manufacturing, a key component of defense readiness.

Value Assessment

Rating: fair

The contract value of $78.7M for 120mm ammunition appears reasonable given the duration and specialized nature of the product. Benchmarking against similar ammunition contracts would provide a clearer picture of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a limited competition. This method may impact price discovery and potentially lead to higher costs compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayer funds are being used for a significant procurement of ammunition, with potential cost implications due to the limited competition.

Public Impact

Ensures supply of critical 120mm ammunition for military operations. Supports the Department of the Army's readiness and strategic capabilities. Highlights reliance on foreign sources for certain defense materiel. Potential for increased costs due to limited competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may inflate costs.
Reliance on foreign subcontractor for critical defense item.
Long contract duration could lead to cost overruns or obsolescence.

Positive Signals

Secures essential ammunition supply.
Utilizes established defense contractor (General Dynamics).

Sector Analysis

The defense sector, specifically ammunition manufacturing, is critical for national security. Spending benchmarks for such specialized munitions are difficult to establish publicly due to classified information and unique production requirements.

Small Business Impact

This contract does not appear to involve small businesses directly, as the award is to a large foreign commercial corporation and its subcontractor. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The Department of the Army is the procuring agency. Oversight would involve monitoring contract performance, delivery schedules, and adherence to terms. The limited competition aspect warrants scrutiny to ensure fair pricing.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for higher costs due to limited competition.
Dependence on foreign supply chain for critical defense materiel.
Risk of price increases or supply disruptions over the long contract duration.
Lack of transparency regarding the exclusion of other sources.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.7 million to CANADIAN COMMERCIAL CORPORATION. AWARD BASE CONTRACT FOR THE 120MM HE/FRPC LAP CONTRACT TO CANADIAN COMMERCIAL CORPORATION WHOSE SUBCONTRACTOR IS GENERAL DYNAMICS, CANADA.

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 $78.7 million.

What is the period of performance?

Start: 2016-02-05. End: 2022-11-30.

What is the justification for excluding other sources in the competition for this ammunition contract?

The justification for excluding other sources is not detailed in the provided data. Typically, such exclusions are based on factors like unique technical capabilities, existing supply chain dependencies, or national security considerations. A thorough review would be needed to assess if these reasons are valid and if they truly necessitate limiting the competition.

What are the long-term strategic implications of relying on a foreign subcontractor for critical ammunition components?

Long-term reliance on foreign subcontractors for critical defense components can pose strategic risks, including supply chain disruptions due to geopolitical instability, trade disputes, or changes in foreign policy. It may also impact domestic industrial capacity and job creation. While potentially cost-effective in the short term, it necessitates robust contingency planning and potentially investment in domestic alternatives.

How does the firm fixed price contract structure mitigate risks associated with the long contract duration?

A firm fixed price (FFP) contract aims to transfer most of the risk to the contractor, ensuring the government pays a set price regardless of the contractor's actual costs. For a long duration contract like this (2490 days), an FFP structure can protect the government from cost overruns due to inflation or unforeseen production challenges. However, it requires careful initial pricing to ensure the contractor's bid is realistic.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN15R0019

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 RUE ALBERT ST SUITE 700, OTTAWA

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

Financial Breakdown

Contract Ceiling: $164,448,514

Exercised Options: $78,684,826

Current Obligation: $78,684,826

Actual Outlays: $-998,731

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $139,932,374

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline