Army awards $31.9M for 92,937 81mm HE M821A4 rounds, with full and open competition after source exclusion

Contract Overview

Contract Amount: $31,929,519 ($31.9M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2026-10-31

Contract Duration: 2,314 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 92,937 EACH 81MM HIGH EXPLOSIVE (HE) M821A4 LOAD, ASSEMBLE, AND PACK (LAP) (INCLUDING FIRST ARTICLE TEST)

Plain-Language Summary

Department of Defense obligated $31.9 million to CANADIAN COMMERCIAL CORPORATION for work described as: 92,937 EACH 81MM HIGH EXPLOSIVE (HE) M821A4 LOAD, ASSEMBLE, AND PACK (LAP) (INCLUDING FIRST ARTICLE TEST) Key points: 1. High volume of critical ammunition procured. 2. Canadian Commercial Corporation is the prime contractor. 3. Contract includes first article testing, ensuring quality. 4. Long-term delivery schedule through October 2026.

Value Assessment

Rating: good

The per-unit cost of $343.40 for the 81mm HE M821A4 rounds appears reasonable given the quantity and inclusion of first article testing. Benchmarking against similar high-explosive munition contracts would provide a more definitive assessment.

Cost Per Unit: $343.40

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a competitive process was used, but specific sources were initially excluded. This method aims for best value while potentially addressing specific capability needs.

Taxpayer Impact: The competitive award process is expected to yield a fair price for taxpayers, ensuring value for money on this significant ammunition procurement.

Public Impact

Ensures readiness for Army operations by supplying essential artillery ammunition. Supports defense industrial base capacity for critical munitions. Potential for follow-on procurements based on performance and need.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single contractor for a large quantity.
Potential supply chain vulnerabilities for specialized components.

Positive Signals

Long-term contract provides predictable supply.
Inclusion of First Article Test ensures quality standards.

Sector Analysis

This procurement falls within the Ammunition (except Small Arms) Manufacturing sector. Spending in this sector is critical for national defense readiness. Benchmarks for similar large-scale ammunition contracts vary significantly based on type, quantity, and technological complexity.

Small Business Impact

No direct indication of small business participation is provided in the data. The prime contractor, Canadian Commercial Corporation, is a government agency, suggesting subcontracts may be utilized, but their distribution to small businesses is not specified.

Oversight & Accountability

The Department of the Army is responsible for oversight of this contract. The 'Full and Open Competition After Exclusion of Sources' method implies a structured procurement process, but further details on performance monitoring and accountability are not provided.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Contract awarded to a foreign entity (Canadian Commercial Corporation).
Long contract duration increases exposure to market volatility.
Potential for supply chain disruptions impacting critical defense materiel.
Specifics of 'exclusion of sources' methodology require further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 million to CANADIAN COMMERCIAL CORPORATION. 92,937 EACH 81MM HIGH EXPLOSIVE (HE) M821A4 LOAD, ASSEMBLE, AND PACK (LAP) (INCLUDING FIRST ARTICLE TEST)

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 $31.9 million.

What is the period of performance?

Start: 2020-06-30. End: 2026-10-31.

What specific factors led to the exclusion of certain sources in the 'Full and Open Competition After Exclusion of Sources' award?

The exclusion of specific sources typically occurs when certain technical capabilities, security clearances, or specialized manufacturing processes are required that only a limited number of vendors can meet. This ensures the selected contractor possesses the necessary expertise and infrastructure for producing the specialized 81mm HE M821A4 rounds, while still allowing competition among those qualified.

What are the potential risks associated with the long-term delivery schedule (2026) for this ammunition?

A long-term schedule introduces risks such as potential price fluctuations in raw materials, evolving military requirements, and contractor performance issues over an extended period. Geopolitical events or unforeseen production challenges could also impact timely delivery. Mitigation strategies might include price adjustment clauses and robust performance monitoring.

How does the inclusion of First Article Test (FAT) impact the overall value and effectiveness of this contract?

The FAT is crucial for ensuring the initial production batch meets all stringent specifications and performance requirements before mass production begins. This significantly enhances the contract's value by reducing the risk of costly defects or failures later on, thereby improving the effectiveness and reliability of the ammunition in operational use.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

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: $31,929,519

Exercised Options: $31,929,519

Current Obligation: $31,929,519

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J17D0004

IDV Type: IDC

Timeline