DoD awards $31.5M for M1 Cartridges, with delivery orders extending through February 2027

Contract Overview

Contract Amount: $31,527,166 ($31.5M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2025-06-16

End Date: 2027-02-28

Contract Duration: 622 days

Daily Burn Rate: $50.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M1 CARTRIDGES AND NRE

Plain-Language Summary

Department of Defense obligated $31.5 million to CANADIAN COMMERCIAL CORPORATION for work described as: M1 CARTRIDGES AND NRE Key points: 1. Contract awarded via full and open competition after exclusion of sources, suggesting a deliberate selection process. 2. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 3. Delivery orders will be issued over a period of 622 days. 4. The North American Industry Classification System (NAICS) code 332993 indicates a focus on ammunition manufacturing. 5. The awarding agency is the Department of the Army, a major component of the Department of Defense. 6. The contract value is approximately $31.5 million, representing a significant investment in ordnance.

Value Assessment

Rating: good

The contract value of $31.5 million for M1 Cartridges and NRE appears reasonable given the scope and duration. Benchmarking against similar ammunition contracts would provide a more precise value-for-money assessment. The Firm Fixed Price (FFP) contract type is generally favorable for the government as it caps the contractor's potential profit and transfers cost overrun risks. However, without specific details on the NRE (Non-Recurring Engineering) costs, a full assessment of the pricing structure is limited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources were excluded, possibly due to specialized capabilities, security requirements, or prior performance. The exact number of bidders is not provided, but the 'after exclusion' clause suggests a more controlled competition than a purely open solicitation. This approach can sometimes lead to higher prices if the pool of qualified bidders is significantly reduced.

Taxpayer Impact: The exclusion of certain sources may limit the potential for the lowest possible price. Taxpayers benefit from ensuring that the selected contractor possesses the necessary specialized expertise for this specific type of ammunition.

Public Impact

This contract directly supports the U.S. Army's logistical and operational readiness by providing essential M1 cartridges. The services delivered include the manufacturing and potentially the development (NRE) of ammunition components. The geographic impact is primarily within the United States, where the ammunition will be produced and likely deployed. Workforce implications include jobs in manufacturing, engineering, and quality control within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusion impacting price discovery.
Reliance on a single or limited number of suppliers could create supply chain vulnerabilities.
The 'NRE' component requires careful oversight to ensure costs are justified and not inflated.

Positive Signals

Firm Fixed Price contract structure provides cost certainty for the government.
Award to Canadian Commercial Corporation suggests established international defense trade relationships.
The contract duration allows for sustained supply and potential economies of scale in production.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on ammunition manufacturing. The market for military-grade ammunition is characterized by high barriers to entry due to stringent quality, security, and performance requirements. Spending in this area is driven by military readiness needs and geopolitical factors. Comparable spending benchmarks would typically be found within the broader DoD procurement data for ordnance and munitions, often involving specialized manufacturers with extensive testing and certification processes.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting plans for this contract. Given the specialized nature of ammunition manufacturing and the potential for exclusion of sources, it is less likely that small businesses would be primary awardees unless they possess highly niche capabilities. Further investigation into subcontracting opportunities would be necessary to assess the impact on the small business ecosystem.

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 the contractor to meet specifications and delivery schedules. Transparency is generally maintained through contract award databases, though specific details of NRE costs and the rationale for source exclusion may be limited. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance and Munitions Programs
Defense Industrial Base Manufacturing Contracts
Canadian Commercial Corporation Defense Contracts

Risk Flags

Potential supply chain disruption due to international sourcing.
Limited competition may impact price optimization.
Unclear scope and cost justification for NRE components.
Dependence on specific manufacturing capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.5 million to CANADIAN COMMERCIAL CORPORATION. M1 CARTRIDGES AND NRE

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 $31.5 million.

What is the period of performance?

Start: 2025-06-16. End: 2027-02-28.

What is the specific nature of the 'NRE' (Non-Recurring Engineering) costs included in this contract, and how were they evaluated?

The 'NRE' component typically refers to one-time costs associated with the design, development, and testing of a product or process. For M1 Cartridges, this could involve tooling, specialized equipment setup, or process optimization for manufacturing. The evaluation of NRE costs by the Department of the Army would involve reviewing the contractor's proposed cost breakdown, comparing it to industry standards for similar development efforts, and ensuring that the costs are directly attributable to the contract's requirements. Without access to the detailed proposal and evaluation documentation, the precise nature and justification of these NRE costs remain unclear, representing a potential area for further scrutiny to ensure fair pricing and prevent cost overruns.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact the overall cost-effectiveness compared to a standard full and open competition?

The 'Full and Open Competition After Exclusion of Sources' method implies that while the competition was not restricted to a sole source, certain potential bidders were deliberately excluded. This exclusion could be based on factors such as specialized technical requirements, security clearances, or unique manufacturing capabilities that only a limited number of firms possess. While this ensures the awardee has the necessary qualifications, it inherently reduces the competitive pool. Consequently, the cost-effectiveness might be lower than a standard full and open competition where all eligible sources could participate, as reduced competition can lessen the downward pressure on pricing. The government aims to balance this by ensuring the excluded sources were legitimately necessary to exclude based on stringent criteria.

What is the track record of the Canadian Commercial Corporation (CCC) in fulfilling defense contracts for the U.S. Department of Defense?

The Canadian Commercial Corporation (CCC) acts as a government-to-government contracting agency for Canada, facilitating international defense trade. CCC has a history of successfully delivering goods and services to various international partners, including the U.S. Department of Defense. Their role often involves managing complex supply chains and ensuring compliance with international trade regulations. While specific performance metrics for every contract are not publicly detailed, CCC's continued engagement in facilitating defense procurements suggests a generally reliable track record. For this specific contract, the Department of the Army would have conducted due diligence on CCC's capabilities and past performance relevant to ammunition supply.

Are there any known risks associated with the supply chain for M1 Cartridges, particularly given the international nature of the awardee?

Risks associated with the supply chain for M1 Cartridges, especially with an international awardee like the Canadian Commercial Corporation, can include geopolitical factors, international trade policy changes, currency fluctuations, and logistical complexities. Dependence on foreign sources for critical defense materiel can also pose strategic risks. However, the U.S. and Canada maintain a strong defense industrial cooperation agreement, which often mitigates some of these risks. The Department of Defense likely assessed these potential supply chain vulnerabilities during the procurement process, possibly requiring contingency plans or ensuring alternative sourcing options exist to maintain readiness.

How does the $31.5 million contract value compare to historical spending on similar ammunition types by the Department of the Army?

Comparing the $31.5 million contract value requires access to historical spending data for M1 Cartridges or functionally equivalent ammunition types procured by the Department of the Army. Without specific historical data points, a direct comparison is difficult. However, the value suggests a significant procurement quantity or a complex manufacturing process, potentially including the aforementioned NRE. The Department of the Army typically procures ammunition in large volumes, and contract values can range from millions to billions of dollars depending on the item, quantity, and duration. This $31.5 million award appears to be a substantial, but not unprecedented, investment for specialized ordnance.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 ALBERT ST STE 1100, OTTAWA

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

Financial Breakdown

Contract Ceiling: $31,527,166

Exercised Options: $31,527,166

Current Obligation: $31,527,166

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W519TC25D0005

IDV Type: IDC

Timeline