DoD Awards $193M for M232A2 Propelling Charge Production Acceleration

Contract Overview

Contract Amount: $193,177,685 ($193.2M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2023-04-27

End Date: 2026-07-31

Contract Duration: 1,191 days

Daily Burn Rate: $162.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCURE M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE AND FUND PRODUCTION ACCELERATION.

Plain-Language Summary

Department of Defense obligated $193.2 million to CANADIAN COMMERCIAL CORPORATION for work described as: PROCURE M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE AND FUND PRODUCTION ACCELERATION. Key points: 1. Significant investment in critical munitions production. 2. Sole-source award to Canadian Commercial Corporation raises competition concerns. 3. Long-term contract (1191 days) with a firm fixed price. 4. Focus on accelerating production for the 155mm Modular Artillery Charges System.

Value Assessment

Rating: fair

The contract value of $193M is substantial. Benchmarking against similar defense manufacturing contracts is difficult without more specific cost breakdowns, but the firm fixed price suggests an attempt to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to the Canadian Commercial Corporation. This lack of competition limits price discovery and potentially increases costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award may lead to higher costs than a competitive process, impacting taxpayer value.

Public Impact

Ensures continued supply of essential artillery propellant. Supports readiness and modernization of artillery systems. Potential for increased defense manufacturing capacity. Impacts the defense industrial base, particularly explosives manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Lack of transparency in pricing due to no-bid contract.
Long contract duration could mask inefficiencies.

Positive Signals

Addresses critical production needs.
Secures supply chain for essential munitions.
Supports allied defense capabilities (via CCC).

Sector Analysis

This award falls within the Explosives Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often driven by geopolitical factors and readiness requirements, with significant government investment typical for specialized production.

Small Business Impact

The contract was awarded to the Canadian Commercial Corporation, a foreign government agency, and not directly to a small business. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and value for taxpayer dollars. Oversight should focus on performance metrics and cost justification throughout the contract's duration.

Related Government Programs

Explosives Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Long contract duration
Reliance on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $193.2 million to CANADIAN COMMERCIAL CORPORATION. PROCURE M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE AND FUND PRODUCTION ACCELERATION.

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 $193.2 million.

What is the period of performance?

Start: 2023-04-27. End: 2026-07-31.

What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?

The justification for a sole-source award typically involves factors like urgency, unique capabilities, or lack of available alternatives. The price is usually determined through negotiation and comparison with historical data or industry benchmarks, though without competition, the 'fairness' can be harder to independently verify. Further documentation would be needed to assess the specific rationale and pricing methodology used.

What are the specific risks associated with relying on a sole-source provider for this critical munition, especially concerning long-term supply chain stability?

Sole-source reliance creates significant risks, including potential price gouging, lack of innovation, and vulnerability to disruptions if the single provider faces issues. Long-term stability is threatened if the provider's capacity or willingness to produce diminishes, or if geopolitical factors impact their operations. Contingency planning and exploring alternative sources should be ongoing.

How will the effectiveness of this production acceleration be measured, and what are the key performance indicators for the Department of the Army?

Effectiveness will likely be measured by the contractor's ability to meet accelerated delivery schedules and production targets for the M232A2 propelling charge. Key performance indicators (KPIs) for the Army would include on-time delivery rates, adherence to quality standards, and potentially cost efficiency improvements achieved through the accelerated production. Regular performance reviews and milestone tracking are crucial.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN19R0016

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 ALBERT ST SUITE 700, OTTAWA

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

Financial Breakdown

Contract Ceiling: $193,177,685

Exercised Options: $193,177,685

Current Obligation: $193,177,685

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: W15QKN19D0072

IDV Type: IDC

Timeline