DoD Awards $42.7M for Artillery Propellant to Support Ukraine Stockpile Replenishment

Contract Overview

Contract Amount: $42,741,344 ($42.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2024-05-22

End Date: 2027-09-30

Contract Duration: 1,226 days

Daily Burn Rate: $34.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE FOR DOD STOCKPILE REPLENISHMENT IN SUPPORT OF UKRAINE.

Plain-Language Summary

Department of Defense obligated $42.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: DELIVERY ORDER FOR M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE FOR DOD STOCKPILE REPLENISHMENT IN SUPPORT OF UKRAINE. Key points: 1. Significant award for critical munitions components, directly supporting international aid. 2. Sole-source award to Canadian Commercial Corporation raises questions about competition and pricing. 3. Long-term delivery order (over 3 years) suggests sustained demand for these components. 4. Focus on explosives manufacturing highlights a specialized and potentially high-risk sector.

Value Assessment

Rating: questionable

The contract is a firm fixed price delivery order. Without competitive bidding, it's difficult to assess if the $42.7 million price represents fair market value. Benchmarking against similar contracts for propellant would be necessary.

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 may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for this significant award raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Direct support for Ukraine's defense efforts through critical munitions components. Potential impact on the global supply chain for specialized explosives. Reinforces the importance of strategic partnerships for defense procurement. Highlights the ongoing need for defense industrial base readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Lack of transparency in pricing justification.
Potential for cost overruns due to non-competitive award.
Long-term commitment without demonstrated best value.

Positive Signals

Addresses critical need for Ukraine support.
Ensures replenishment of DoD stockpile.
Utilizes established international procurement channel (CCC).

Sector Analysis

This award falls within the Explosives Manufacturing sector, a critical but specialized area of defense industrial production. Spending benchmarks are difficult to establish due to the niche nature and geopolitical demand.

Small Business Impact

The awardee is the Canadian Commercial Corporation, a foreign government agency, not a small business. There is no indication of subcontracting opportunities for small businesses in this specific award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Accountability rests with the Department of the Army to justify the lack of competition.

Related Government Programs

Explosives Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Long-term contract duration
Geopolitical supply chain risk
Limited transparency on price justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.7 million to CANADIAN COMMERCIAL CORPORATION. DELIVERY ORDER FOR M31A2 PROPELLANT FOR THE 155MM MODULAR ARTILLERY CHARGES SYSTEM (MACS) M232A2 PROPELLING CHARGE FOR DOD STOCKPILE REPLENISHMENT IN SUPPORT OF UKRAINE.

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 $42.7 million.

What is the period of performance?

Start: 2024-05-22. End: 2027-09-30.

What is the justification for awarding this contract sole-source, and how was the price determined to be fair and reasonable?

The justification for a sole-source award typically involves specific circumstances like unique capabilities, urgent needs, or lack of viable alternatives. The Department of the Army would need to provide documentation demonstrating market research and a thorough price analysis to establish reasonableness, especially given the significant dollar value and duration of the contract.

What are the specific risks associated with relying on a sole-source provider for critical munitions components, particularly in a geopolitical context?

Sole-source reliance increases vulnerability to supply chain disruptions, price gouging, and potential quality control issues if the provider lacks competitive pressure. In a geopolitical context, it also raises concerns about dependency on foreign entities for essential defense materiel, potentially impacting national security and strategic flexibility.

How does this award contribute to the overall effectiveness of the DoD's stockpile replenishment strategy and its support for allies?

This award directly addresses a critical component for artillery systems, vital for sustained combat operations. By replenishing the DoD's stockpile, it ensures readiness and enables continued support for allies like Ukraine, thereby contributing to the effectiveness of broader strategic objectives and deterrence.

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

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: $42,741,344

Exercised Options: $42,741,344

Current Obligation: $42,741,344

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