Department of the Army awards $23M contract for ammunition, with delivery orders expected over 1713 days

Contract Overview

Contract Amount: $22,949,822 ($22.9M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-22

End Date: 2028-05-31

Contract Duration: 1,713 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAP 81MM HE M889A2 & M821A4

Plain-Language Summary

Department of Defense obligated $22.9 million to CANADIAN COMMERCIAL CORPORATION for work described as: LAP 81MM HE M889A2 & M821A4 Key points: 1. Contract value represents a significant investment in essential munitions. 2. Competition dynamics for this contract are crucial for ensuring fair pricing. 3. Performance period extends over several years, indicating a long-term need. 4. The contract falls within the broader defense manufacturing sector. 5. Delivery orders suggest flexibility in meeting evolving supply requirements.

Value Assessment

Rating: good

The contract value of approximately $23 million for ammunition is within a reasonable range for similar defense procurements. Benchmarking against historical spending on comparable munitions, such as artillery shells and related components, would provide further context. The firm fixed-price structure offers cost certainty, but ongoing monitoring of unit prices against market trends is advisable to ensure continued value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bidders suggests a moderately competitive environment. While more bidders could potentially drive prices lower, the existing competition likely prevented excessive pricing and ensured a reasonable selection process.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive bidding environment, which can lead to better pricing and a wider selection of qualified contractors.

Public Impact

The Department of the Army is the primary beneficiary, securing critical ammunition supplies. Services delivered include the manufacturing and supply of specific ammunition types (M889A2 & M821A4). Geographic impact is national, supporting military readiness across various operational theaters. Workforce implications include potential job creation within the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality control for critical munitions is paramount.
Fluctuations in raw material costs could affect long-term affordability.

Positive Signals

Firm fixed-price contract provides cost predictability.
Awarded under full and open competition, suggesting a robust selection process.
Long-term delivery schedule allows for phased production and resource planning.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for such specialized munitions is typically dominated by a few key manufacturers due to stringent quality and security requirements. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by military branches, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). While the prime contractor, Canadian Commercial Corporation, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of subcontracting to small businesses will depend on the prime contractor's strategy and the specific needs of the ammunition components.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Vehicle Ammunition
Artillery and Mortar Ammunition
Defense Industrial Base Manufacturing

Risk Flags

Supply Chain Vulnerability
Raw Material Price Volatility
Quality Control Assurance
Production Capacity Limitations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to CANADIAN COMMERCIAL CORPORATION. LAP 81MM HE M889A2 & M821A4

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 $22.9 million.

What is the period of performance?

Start: 2023-09-22. End: 2028-05-31.

What is the historical spending pattern for this specific type of ammunition (M889A2 & M821A4) by the Department of the Army?

Analyzing historical spending for the M889A2 and M821A4 ammunition types requires access to detailed procurement databases. Typically, the Army procures such munitions through a combination of competitive bids and sole-source contracts, depending on production capacity and strategic needs. Spending can fluctuate year-to-year based on operational tempo, inventory levels, and budget allocations. Without specific historical data for these exact munition types, it's difficult to provide precise figures, but similar large-caliber ammunition contracts can range from several million to tens of millions of dollars annually. The current $23 million award over a multi-year period suggests a consistent demand and a significant investment in maintaining adequate stockpiles.

How does the awarded price per unit compare to market rates for similar ammunition?

Determining the exact price per unit is not possible with the provided data, as only the total contract value and the number of delivery orders are available. To compare this to market rates, one would need to divide the total contract value by the estimated quantity of ammunition to be delivered. This unit cost would then be benchmarked against publicly available pricing for comparable munitions from other defense contractors or international markets. Factors such as specific technical requirements, lot size, and delivery timelines significantly influence unit pricing. A thorough analysis would involve comparing specifications, quantities, and contract terms to ensure a like-for-like comparison.

What are the key performance indicators (KPIs) for this contract, and how is contractor performance being monitored?

Key performance indicators for ammunition contracts typically revolve around on-time delivery, quality assurance (meeting all technical specifications and defect rates), and adherence to safety standards during manufacturing and transport. The Department of the Army's contracting officer and quality assurance representatives (QARs) are responsible for monitoring contractor performance. This often involves regular inspections, testing of delivered lots, and review of production schedules. Performance is formally assessed through contract-specific metrics and may influence future contract awards. Failure to meet KPIs can result in penalties, contract termination, or reduced future opportunities.

What is the track record of the Canadian Commercial Corporation (CCC) in fulfilling defense contracts of this nature?

The Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates international trade for Canadian companies, particularly in the defense sector. CCC has a long history of acting as a contracting agent for the Canadian government and its allies, including the U.S. Department of Defense. Their track record typically involves managing complex procurements, ensuring compliance with international trade regulations, and facilitating secure supply chains. While CCC itself doesn't manufacture, its role is to ensure that Canadian suppliers meet the contractual obligations. Their experience in managing large-scale defense procurements suggests a capability to handle contracts like this, focusing on program management, quality assurance, and timely delivery.

Are there any identified risks associated with the supply chain or manufacturing process for these specific ammunition types?

Risks associated with the supply chain and manufacturing of ammunition are inherent due to the specialized nature of the materials and processes involved. Potential risks include the availability and cost volatility of raw materials (e.g., propellants, metals), reliance on a limited number of specialized manufacturers for certain components, and geopolitical factors that could disrupt international supply chains. Manufacturing risks include ensuring consistent quality control to meet stringent military specifications, maintaining safety protocols in hazardous production environments, and managing production capacity to meet demand. The long-term nature of this contract necessitates robust risk management strategies to mitigate potential disruptions and ensure a steady supply.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

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: $22,949,822

Exercised Options: $22,949,822

Current Obligation: $22,949,822

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J22D0032

IDV Type: IDC

Timeline