Department of the Army awarded $56.5M engineering services contract, highlighting long-term engagement

Contract Overview

Contract Amount: $56,482,989 ($56.5M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2009-11-23

End Date: 2014-11-23

Contract Duration: 1,826 days

Daily Burn Rate: $30.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: REF. SOW PARA. C.2.4.5

Plain-Language Summary

Department of Defense obligated $56.5 million to CANADIAN COMMERCIAL CORPORATION for work described as: REF. SOW PARA. C.2.4.5 Key points: 1. Contract duration of 5 years suggests a need for sustained engineering support. 2. The use of a Cost Plus Fixed Fee (CPFF) pricing structure warrants scrutiny for cost control. 3. Competition level indicates a potentially robust market for these specialized engineering services. 4. The contract's value is significant within the engineering services sector for defense. 5. Performance context is tied to specific Statement of Work (SOW) paragraphs, implying detailed requirements. 6. The award to Canadian Commercial Corporation suggests international collaboration in defense procurement.

Value Assessment

Rating: fair

The contract value of $56.5 million over five years averages approximately $11.3 million annually. Benchmarking this against similar large-scale engineering services contracts for the Department of Defense is challenging without more specific service details. However, the CPFF structure can sometimes lead to higher costs if not managed tightly, as contractor incentives are geared towards cost incurrence rather than strict cost avoidance. Further analysis would require comparing the fixed fee percentage and the total costs incurred against industry standards for comparable projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing. The number of bidders is not specified, but the 'full and open' designation implies a market capable of supporting more than a single provider.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, leading to better value for money on government contracts.

Public Impact

The Department of the Army benefits from specialized engineering expertise to support its operations and infrastructure. Services delivered likely include design, analysis, and technical support for various military projects. Geographic impact is likely concentrated around Army installations or project sites requiring engineering support. Workforce implications include the potential for employment of engineers and technical staff, both within the contractor's organization and potentially through subcontracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can incentivize cost overruns if not rigorously monitored.
Long contract duration (5 years) increases the risk of scope creep or evolving requirements not being adequately addressed.
Reliance on a single awardee for a significant duration may limit future flexibility and access to potentially better solutions.
The involvement of a foreign entity (Canadian Commercial Corporation) may introduce complexities in oversight and intellectual property management.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The contract specifies a definitive contract type, suggesting a clear scope and terms.
The clear start and end dates provide a defined period for service delivery and financial planning.
The contract is tied to specific SOW paragraphs, implying well-defined requirements and expectations.

Sector Analysis

Engineering services are a critical component of the defense sector, encompassing a wide range of activities from initial design to ongoing maintenance and modernization of military infrastructure and systems. The market for these services is substantial, with significant government spending allocated annually. This contract fits within the broader category of professional services supporting defense readiness and operations. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for engineering and technical support services.

Small Business Impact

The provided data does not indicate any small business set-aside provisions (ss: false, sb: false). Therefore, this contract was not specifically targeted towards small businesses. There is no information on subcontracting plans or their impact on the small business ecosystem. The award to a large entity suggests that subcontracting opportunities for small businesses may exist, but this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Specific oversight mechanisms would be detailed within the contract's Statement of Work (SOW) and terms and conditions. Accountability is ensured through performance metrics, payment schedules tied to deliverables, and potential penalties for non-performance. Transparency is generally maintained through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

Department of Defense Engineering Services
Army Professional Services Contracts
Canadian Commercial Corporation Contracts
Cost Plus Fixed Fee Contracts
Long-Term Defense Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to manage costs.
Long contract duration may increase exposure to scope creep and evolving requirements.
Awardee is a foreign commercial corporation, potentially adding complexity to oversight and IP management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.5 million to CANADIAN COMMERCIAL CORPORATION. REF. SOW PARA. C.2.4.5

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 $56.5 million.

What is the period of performance?

Start: 2009-11-23. End: 2014-11-23.

What is the track record of Canadian Commercial Corporation in delivering similar engineering services to the Department of Defense?

Canadian Commercial Corporation (CCC) acts as a government-to-government contracting agency, facilitating international trade for Canadian companies. While CCC itself is not typically the direct service provider, it manages contracts awarded to Canadian firms. To assess the track record for this specific contract, one would need to examine the performance history of the underlying Canadian contractor(s) engaged by CCC for these engineering services. This would involve reviewing past performance evaluations, any disputes or claims, and the successful completion of similar projects within the Department of Defense or other government agencies. Without identifying the specific Canadian firm(s) performing the work under CCC's management, a direct assessment of their track record is not possible from the provided data.

How does the average annual value of this contract compare to other large-scale engineering services contracts awarded by the Department of the Army?

This contract has an average annual value of approximately $11.3 million ($56.5M / 5 years). To compare this, one would need to analyze the distribution of engineering services contract values awarded by the Department of the Army. Larger contracts might range from tens to hundreds of millions of dollars annually, often for major system design, infrastructure development, or extensive research and development support. Smaller contracts could be in the low millions or less, for specialized, short-term tasks. An annual value of $11.3 million places this contract in the mid-to-large tier for engineering services, suggesting a significant scope of work but likely not the absolute largest procurements within the Army's portfolio.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this engineering services engagement?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the 'fixed fee' component provides the contractor with a predetermined profit margin, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates, the government bears that additional expense. This structure can reduce the contractor's incentive to control costs rigorously, as their fee remains constant regardless of the actual costs. Effective risk mitigation requires robust government oversight, detailed cost accounting standards, and clear definitions of allowable costs to prevent unnecessary expenditures and ensure the government receives good value.

What specific engineering services were delivered under this contract, and how did they contribute to Army objectives?

The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330) awarded under a specific Statement of Work (SOW) paragraph C.2.4.5. However, the exact nature of these services is not detailed. Typically, Army engineering services can encompass a broad spectrum, including architectural design, civil engineering for infrastructure (barracks, airfields, roads), mechanical and electrical engineering for facilities, systems engineering for military platforms, environmental engineering, and technical consulting. These services are crucial for maintaining, upgrading, and developing the physical infrastructure and operational capabilities of the Army, directly supporting readiness, modernization, and mission accomplishment.

How has historical spending on engineering services by the Department of the Army trended over the past decade?

Historical spending on engineering services by the Department of the Army has generally been substantial and consistent, reflecting the ongoing need for technical expertise in infrastructure development, maintenance, and modernization. While specific figures fluctuate based on global security environments, budget allocations, and major procurement cycles, the Army consistently invests billions annually in various engineering and technical support contracts. Trends may show shifts towards areas like cybersecurity engineering, advanced materials, sustainable infrastructure, and digital engineering solutions in recent years, driven by evolving technological landscapes and strategic priorities.

What is the significance of the Canadian Commercial Corporation being the awardee for a Department of the Army contract?

The involvement of the Canadian Commercial Corporation (CCC) signifies a government-to-government procurement arrangement. CCC facilitates contracting between foreign governments and Canadian suppliers, often used when a specific Canadian capability is required or when it aligns with broader international cooperation agreements. For the Department of the Army, this means the contract is managed through a specific international framework, potentially simplifying certain aspects of cross-border procurement but also requiring adherence to specific protocols governing such agreements. It highlights the use of international partnerships in defense acquisition and support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56HZV09R0087

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $94,982,989

Exercised Options: $94,982,989

Current Obligation: $56,482,989

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline