Department of Defense awards $26M for BPUP C Kits and Spares, a sole-source contract with fixed price redetermination

Contract Overview

Contract Amount: $26,037,066 ($26.0M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2008-03-07

End Date: 2009-03-31

Contract Duration: 389 days

Daily Burn Rate: $66.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Defense

Official Description: BPUP C KITS AND SPARES

Plain-Language Summary

Department of Defense obligated $26.0 million to CANADIAN COMMERCIAL CORPORATION for work described as: BPUP C KITS AND SPARES Key points: 1. The contract's fixed price redetermination structure may lead to cost overruns if not closely monitored. 2. Sole-source procurement limits competitive pressure, potentially impacting overall value for money. 3. The contractor, Canadian Commercial Corporation, has a history with the Department of Defense, suggesting some level of established relationship. 4. The contract duration of 389 days is relatively short, indicating a focused need for the specified spares. 5. The absence of small business participation raises questions about broader economic impact. 6. The Public Sector Code (PSC) is not specified, making direct comparisons to similar procurements challenging.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is difficult due to the lack of detailed cost breakdowns and the sole-source nature. The fixed price redetermination pricing type introduces uncertainty, as final costs are not fixed at the outset. Without comparable sole-source contracts for similar 'BPUP C Kits and Spares' from the Department of the Army, it's hard to definitively assess if the negotiated price represents fair market value. Further analysis would require insight into the cost drivers and the redetermination process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source can fulfill the requirement. The lack of competition means there was no opportunity for multiple vendors to bid, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding processes, potentially resulting in a higher overall expenditure for these specific kits and spares.

Public Impact

The primary beneficiaries are likely military units requiring specific armored vehicle components for operational readiness. The services delivered include the provision of 'BPUP C Kits and Spares', crucial for maintaining the functionality of armored vehicles. The geographic impact is primarily within the Department of Defense's operational theaters, though the spares themselves may be manufactured elsewhere. Workforce implications are likely concentrated within the contractor's organization and potentially the Department of Defense's maintenance and logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Fixed price redetermination pricing introduces uncertainty in final cost.
Lack of small business participation limits broader economic inclusion.
Limited public data on specific 'BPUP C Kits' makes value assessment difficult.

Positive Signals

Contract awarded to Canadian Commercial Corporation, suggesting a potentially established supplier relationship.
Contract addresses a specific need for 'BPUP C Kits and Spares', indicating a focus on critical equipment maintenance.
The award is managed by the Department of the Army, a major component of the DoD with significant procurement experience.

Sector Analysis

The defense industrial base relies heavily on specialized component manufacturing and spare parts to maintain operational readiness. Contracts for armored vehicle components fall within the broader 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' sector. This sector is characterized by high barriers to entry, specialized technical expertise, and often long-term relationships between government agencies and prime contractors. Benchmarking spending in this niche requires access to detailed procurement data for similar specialized components, which is often limited due to security and proprietary concerns.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there an indication of small business subcontracting. The award to the Canadian Commercial Corporation suggests a focus on established, potentially larger-scale suppliers. This lack of small business involvement means that opportunities to leverage the agility and innovation of smaller firms within the defense supply chain are missed, and the broader economic benefits for the small business ecosystem are not realized through this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms of the fixed price redetermination contract, including milestones for cost reporting and final price adjustments. Transparency is limited due to the sole-source nature and the proprietary aspects of defense contracting. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Vehicle Procurement
Military Vehicle Spare Parts
Armored Vehicle Component Manufacturing
Canadian Commercial Corporation Contracts
Fixed Price Redetermination Contracts

Risk Flags

Sole-source award
Fixed price redetermination pricing
Lack of small business participation
Limited public data on specific components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to CANADIAN COMMERCIAL CORPORATION. BPUP C KITS AND SPARES

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 $26.0 million.

What is the period of performance?

Start: 2008-03-07. End: 2009-03-31.

What is the specific nature and function of 'BPUP C Kits and Spares'?

The specific nature and function of 'BPUP C Kits and Spares' are not detailed in the provided data. 'BPUP' likely refers to a specific system or component within an armored vehicle platform, possibly related to power units, propulsion, or a similar critical subsystem. The 'C Kits' suggest a collection of components or a standardized package, while 'Spares' indicates replacement parts intended to maintain the operational readiness of these systems. Without further classification or context from the Department of Defense, the exact role of these kits and spares in military operations remains unspecified. This lack of detail makes it challenging to assess the criticality of the procurement or to benchmark its value against other defense expenditures.

How does the fixed price redetermination (FPR) pricing structure typically impact costs for the government?

The Fixed Price Redetermination (FPR) pricing structure is a hybrid approach that aims to balance cost control with flexibility. Initially, a target price is established, and the contractor is paid based on this target. However, after the contract is completed or at specific milestones, the final price is redetermined based on the actual costs incurred, subject to certain ceilings or floors. For the government, FPR can be advantageous when costs are highly uncertain at the outset, such as with new technologies or complex manufacturing processes. It allows the government to benefit if costs come in lower than anticipated, but it also carries the risk that the final price could exceed the initial target, especially if cost overruns occur and are deemed allowable. Effective oversight and detailed cost auditing are crucial for the government to manage the risks associated with FPR and ensure fair pricing.

What are the implications of awarding a sole-source contract to a foreign entity (Canadian Commercial Corporation) for defense spares?

Awarding a sole-source contract to a foreign entity like the Canadian Commercial Corporation (CCC) for defense spares has several implications. Firstly, it bypasses the competitive bidding process, which can limit opportunities for domestic small businesses and potentially lead to higher costs if competition would have driven prices down. Secondly, it relies on the CCC's established capabilities and relationship with the Department of Defense, suggesting a strategic decision to leverage existing supply chains or unique capabilities. From a national security perspective, reliance on foreign suppliers for critical components can introduce supply chain risks, including potential disruptions due to geopolitical factors or differing regulatory environments. However, agreements like the one between the US and Canada often facilitate streamlined procurement for mutually beneficial defense needs, potentially ensuring access to specialized parts or leveraging established interoperability.

What is the historical spending pattern for 'BPUP C Kits and Spares' or similar components by the Department of the Army?

Historical spending data for 'BPUP C Kits and Spares' specifically is not readily available in the provided summary. The contract ID '336992' and the award date of '2008-03-07' suggest this is a specific, potentially one-time or infrequent procurement. To understand historical spending patterns, one would need to query broader defense procurement databases using keywords related to armored vehicle components, specific vehicle platforms, or the Public Sector Code (PSC) if known. The fact that this was a sole-source award in 2008-2009 might indicate that competitive options were limited at that time, or that the requirement was highly specialized. Analyzing trends in spending on similar types of spares over multiple fiscal years would be necessary to identify any patterns or significant shifts in procurement volume or value.

What is the typical performance period for contracts of this nature (military vehicle spares)?

The typical performance period for contracts involving military vehicle spares can vary significantly depending on the nature of the spares, the quantity required, and the urgency of the need. For routine replenishment of common spares, contracts might be structured as indefinite-delivery, indefinite-quantity (IDIQ) vehicles with longer overall periods of performance (several years) but with individual orders having shorter delivery timelines. For specialized kits or urgent operational needs, contracts like this one, with a duration of 389 days (approximately 13 months), are not uncommon. This duration suggests a defined period for the delivery of a specific batch of kits and spares, potentially tied to a particular maintenance cycle, upgrade, or deployment. Shorter durations are often preferred for cost-redeterminable contracts to allow for more frequent review and adjustment of pricing based on actual costs incurred.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV07R0836

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

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, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $26,037,066

Exercised Options: $26,037,066

Current Obligation: $26,037,066

Timeline