DoD's $14.2M engine and wheel contract awarded to Canadian Commercial Corporation lacked competition

Contract Overview

Contract Amount: $14,220,458 ($14.2M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2008-07-23

End Date: 2009-06-05

Contract Duration: 317 days

Daily Burn Rate: $44.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINE AND AUX ASSY; WHEEL, PNEUMATIC TIRE

Plain-Language Summary

Department of Defense obligated $14.2 million to CANADIAN COMMERCIAL CORPORATION for work described as: ENGINE AND AUX ASSY; WHEEL, PNEUMATIC TIRE Key points: 1. The contract value of $14.2 million for engine and auxiliary assemblies and pneumatic tires represents a significant investment in military vehicle components. 2. Awarded to Canadian Commercial Corporation, the contract's sole-source nature raises questions about potential overpayment and lack of market-driven pricing. 3. The absence of competition is a key risk indicator, potentially limiting innovation and driving up costs for taxpayers. 4. This contract falls within the broader Defense Logistics Agency's mission to supply military equipment and parts. 5. The specific product codes suggest a focus on specialized components for armored vehicles, indicating a niche market.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging due to the lack of competitive bids. Without comparable offers, it's difficult to ascertain if the $14.2 million price reflects fair market value. The sole-source award suggests that the government may not have achieved the best possible price. Further analysis would require access to historical pricing data for similar components or an independent cost assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The data indicates that only one bidder, Canadian Commercial Corporation, was considered. This lack of competition limits the government's ability to leverage market forces to secure the best pricing and terms. It suggests potential reliance on a specific supplier or a situation where competition was deemed impractical or unavailable.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This contract's $14.2 million value could have been lower if multiple vendors had the opportunity to bid.

Public Impact

The primary beneficiaries are the military units relying on the armored vehicles equipped with these engine and auxiliary assemblies and tires. The services delivered include the provision of critical components essential for the operational readiness of military equipment. The geographic impact is likely focused on military bases and operational theaters where these vehicles are deployed. Workforce implications may include support roles within the Canadian Commercial Corporation and potentially U.S. military personnel involved in logistics and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Sole-source award raises concerns about transparency and potential for uncompetitive pricing.
Limited data on contractor performance for this specific contract.

Positive Signals

Contract awarded to Canadian Commercial Corporation, a known entity for government procurement.
Contract duration of approximately one year suggests a defined need.
Firm Fixed Price contract type provides cost certainty once awarded.

Sector Analysis

The defense logistics and component manufacturing sector is characterized by specialized suppliers and often long procurement cycles. Contracts like this, for specific vehicle parts, are crucial for maintaining military readiness. The market size for such specialized components can be substantial, but often dominated by a few key players due to stringent quality and security requirements. Benchmarking against similar contracts for armored vehicle parts would be necessary for a comprehensive value assessment.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. The award to a large entity like Canadian Commercial Corporation suggests that small businesses were likely not primary participants in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the relevant branches of the Department of Defense. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award, but contract award data is publicly available through federal procurement databases.

Related Government Programs

Military Vehicle Parts Procurement
Defense Logistics Agency Contracts
Armored Vehicle Component Manufacturing
Canadian Commercial Corporation Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for uncompetitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to CANADIAN COMMERCIAL CORPORATION. ENGINE AND AUX ASSY; WHEEL, PNEUMATIC TIRE

Who is the contractor on this award?

The obligated recipient is CANADIAN COMMERCIAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2008-07-23. End: 2009-06-05.

What is the track record of Canadian Commercial Corporation in supplying similar engine and auxiliary assemblies and tires to the U.S. Department of Defense?

Information regarding Canadian Commercial Corporation's specific track record for supplying engine and auxiliary assemblies and pneumatic tires to the U.S. Department of Defense is not detailed in the provided data. However, as an entity facilitating procurement for the Canadian government and often acting as a prime contractor for foreign military sales, they have experience in government contracting. A deeper dive into historical contract awards and performance reviews would be necessary to fully assess their reliability and past performance on similar items. The sole-source nature of this particular award suggests a specific reason for their selection, which could be based on prior positive performance or unique capabilities.

How does the $14.2 million contract value compare to market rates for similar engine and auxiliary assemblies and pneumatic tires?

Directly comparing the $14.2 million contract value to current market rates for similar engine and auxiliary assemblies and pneumatic tires is difficult without more specific product details and competitive bidding data. The contract was awarded on a sole-source basis, meaning there was no competitive process to establish a market-driven price. To benchmark this value, one would need to identify comparable contracts awarded competitively, analyze the unit costs of similar components from other suppliers, or conduct an independent cost analysis of the components' materials, labor, and overhead. The absence of competition inherently raises concerns that the price may not be optimized.

What are the primary risks associated with awarding a $14.2 million contract on a sole-source basis for military vehicle components?

The primary risks associated with awarding a $14.2 million contract on a sole-source basis for military vehicle components include: 1. **Price Inflation:** Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to overpayment by the government. 2. **Limited Innovation:** A sole-source award can stifle innovation as there is no pressure from competing firms to develop more efficient or cost-effective solutions. 3. **Supply Chain Vulnerability:** Over-reliance on a single supplier can create vulnerabilities in the supply chain if the contractor faces production issues, financial instability, or geopolitical challenges. 4. **Reduced Transparency:** Sole-source procurements generally offer less transparency compared to competitive processes, making it harder for the public and oversight bodies to verify the fairness of the award and pricing.

What is the expected effectiveness of these engine and auxiliary assemblies and pneumatic tires in supporting military operations?

The effectiveness of these engine and auxiliary assemblies and pneumatic tires is critical for the operational readiness and performance of the military vehicles they are intended for. As components for armored vehicles, they are expected to meet stringent military specifications for durability, reliability, and performance under demanding conditions, including combat environments. The firm fixed-price contract type suggests a clear definition of the required specifications and quality standards. However, the ultimate effectiveness will depend on the quality of the manufactured components, their proper integration into the vehicles, and the maintenance protocols followed by the end-users. Without specific performance metrics tied to this contract, assessing effectiveness relies on the assumption that the components meet military-grade standards.

How does this $14.2 million contract fit into the broader historical spending patterns for military vehicle components by the Department of Defense?

This $14.2 million contract represents a specific procurement within the vast and ongoing spending of the Department of Defense on military vehicle components. Historical spending patterns for such components are typically substantial, driven by the need to maintain and modernize a large fleet of vehicles. Contracts for engines, assemblies, and tires are recurring necessities. The value of this particular contract, while significant, is likely one of many such awards. Analyzing historical data would reveal trends in spending on specific vehicle types, the prevalence of sole-source versus competitive awards, and the average costs for similar components over time. This contract's sole-source nature might deviate from a pattern of competitive bidding if such a pattern exists for these specific parts.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV08R0485

Offers Received: 1

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: $14,220,458

Exercised Options: $14,220,458

Current Obligation: $14,220,458

Timeline