DoD spent $28M on illumination cartridges, with 3 bidders in a full and open competition

Contract Overview

Contract Amount: $28,078,155 ($28.1M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2006-11-15

End Date: 2013-03-31

Contract Duration: 2,328 days

Daily Burn Rate: $12.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M314A3 ILLUMINATION CARTRIDGE

Plain-Language Summary

Department of Defense obligated $28.1 million to CANADIAN COMMERCIAL CORPORATION for work described as: M314A3 ILLUMINATION CARTRIDGE Key points: 1. The contract value of $28 million over approximately 6.4 years suggests a moderate annual spend. 2. A firm fixed-price contract type indicates that the contractor assumes the risk for cost overruns. 3. The presence of 3 bidders in a full and open competition suggests a healthy level of market interest. 4. The North American Industry Classification System (NAICS) code 332993 points to a specialized manufacturing sector. 5. The contract was awarded by the Department of the Army, indicating a specific military application. 6. The contract duration of 2328 days (over 6 years) suggests a long-term need for these illumination cartridges.

Value Assessment

Rating: fair

Benchmarking the value of $28 million for illumination cartridges is challenging without specific performance metrics or detailed cost breakdowns. However, the firm fixed-price contract type generally aims for cost control. The number of bidders (3) in a full and open competition provides some assurance of competitive pricing, but a deeper analysis of the unit price against market rates for similar illumination devices would be needed for a definitive value assessment. The contract's duration suggests a significant quantity was procured, making the overall value substantial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of three bidders indicates a degree of market interest and competition for this specific type of ammunition. While three bidders is a reasonable number, it is not exceptionally high, suggesting that the market for these specialized illumination cartridges may be somewhat concentrated or that the barriers to entry for potential competitors are significant.

Taxpayer Impact: A full and open competition with multiple bidders generally leads to more competitive pricing, which is beneficial for taxpayers. It helps ensure that the government is not overpaying for the goods procured.

Public Impact

Military personnel requiring illumination for tactical operations will benefit from the supply of these cartridges. The services delivered include the manufacturing and supply of specialized ammunition. The geographic impact is likely focused on military bases and deployment zones where these cartridges are utilized. The contract supports jobs within the ammunition manufacturing sector, specifically related to illumination devices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific unit cost data makes it difficult to assess true value for money.
The specialized nature of the product might limit the number of potential competitors in the long run.
Long contract duration could lead to price increases if not managed carefully through contract modifications.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Full and open competition with multiple bidders suggests a competitive bidding process.
Award by the Department of the Army indicates a clear governmental need and application.

Sector Analysis

The contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The NAICS code 332993, 'Ammunition (except Small Arms) Manufacturing,' indicates a niche market. The defense industry is characterized by specialized production requirements, stringent quality control, and often long-term procurement cycles. Spending in this sector is heavily influenced by geopolitical factors and military readiness requirements. Comparable spending benchmarks would typically be found within the broader defense procurement data for ammunition and ordnance.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of ammunition manufacturing, it is possible that the primary contractors are larger, established firms. Further investigation into subcontracting plans would be necessary to determine if small businesses were involved in fulfilling parts of this contract, potentially in areas like component supply or specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally provided through contract award databases, though detailed cost breakdowns are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Support Equipment
Specialized Ordnance Manufacturing
Illumination Devices for Military Use

Risk Flags

Potential for limited competition due to specialized product
Long contract duration may introduce risks of obsolescence or price escalation if not managed
Dependence on specific manufacturing capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to CANADIAN COMMERCIAL CORPORATION. M314A3 ILLUMINATION CARTRIDGE

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 $28.1 million.

What is the period of performance?

Start: 2006-11-15. End: 2013-03-31.

What is the historical spending trend for illumination cartridges by the Department of Defense?

Analyzing historical spending trends for illumination cartridges by the Department of Defense requires access to comprehensive procurement data over multiple fiscal years. Without specific data, it's difficult to provide precise figures. However, spending in this category is typically driven by operational tempo, troop deployments, and modernization efforts. Periods of increased conflict or strategic shifts often correlate with higher demand and spending on essential supplies like illumination cartridges. The $28 million awarded in this single contract suggests a significant, albeit potentially infrequent, procurement need. Further analysis would involve examining annual reports, budget requests, and contract award databases to identify patterns, fluctuations, and the average annual expenditure for such items over extended periods.

How does the unit cost of these illumination cartridges compare to similar products in the market?

Determining the precise unit cost and comparing it to market rates is challenging without the specific quantity procured under this $28 million contract. The contract value alone does not reveal the per-unit price. To perform a meaningful comparison, one would need to know the total number of illumination cartridges purchased. Subsequently, this total cost would be divided by the quantity to derive a unit cost. This derived unit cost could then be benchmarked against publicly available pricing for similar military-grade illumination devices, or against data from other government contracts for comparable items. Factors such as technological sophistication, lifespan, and specific performance characteristics would need to be considered for an accurate comparison.

What are the primary risks associated with the manufacturing and supply of ammunition like illumination cartridges?

The primary risks associated with manufacturing and supplying ammunition, including illumination cartridges, are multifaceted. For the contractor, these include production quality control failures leading to defective products, supply chain disruptions for raw materials, and adherence to stringent safety and environmental regulations. For the government, risks involve potential cost overruns (though mitigated by firm fixed-price contracts), delivery delays impacting operational readiness, and the obsolescence of technology over the contract's lifespan. Furthermore, geopolitical instability can affect the availability and cost of specialized components. Ensuring the reliability and effectiveness of such critical supplies is paramount, and any failure can have significant operational consequences.

What is the track record of the Canadian Commercial Corporation (CCC) as a defense contractor?

The Canadian Commercial Corporation (CCC) acts as an agent of the Canadian government to facilitate international trade for Canadian companies. In the context of defense contracting, CCC often facilitates government-to-government procurement. Their track record as a contractor is therefore tied to the performance of the Canadian companies they represent. CCC has a long history of supporting Canadian exports, including defense-related goods and services, to allied nations, including the United States. Their role is typically to ensure contractual compliance, manage payment processes, and provide a government-backed assurance of performance. Specific performance metrics for CCC in defense contracts would depend on the individual projects and the capabilities of the underlying Canadian suppliers.

How does the competition level of 3 bidders impact price discovery for this contract?

A competition level of three bidders in a full and open process generally provides a reasonable basis for price discovery. It indicates that at least three entities found the opportunity attractive enough to invest resources in preparing a bid. This level of competition typically pressures bidders to offer competitive pricing to secure the contract. However, it is not as robust as a competition with five or more bidders, which might drive prices even lower. The specific nature of the product – specialized ammunition – could mean that the pool of qualified bidders is inherently limited, making three bidders a potentially strong outcome within that market context. The government's negotiation strategy and the clarity of the solicitation requirements also play a role in how effectively price discovery is achieved.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J05R0137

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Government of Canada (UEI: 241015486)

Address: 50 O'CONNOR ST SUITE 1100, OTTAWA

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

Financial Breakdown

Contract Ceiling: $28,078,155

Exercised Options: $28,078,155

Current Obligation: $28,078,155

Contract Characteristics

Cost or Pricing Data: NO

Timeline