Department of Defense awards $35.7M contract for Light Armored Vehicle variants to Canadian Commercial Corporation

Contract Overview

Contract Amount: $35,741,911 ($35.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2010-07-30

End Date: 2013-04-30

Contract Duration: 1,005 days

Daily Burn Rate: $35.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LIGHT ARMORED VEHICLE VARIANTS LAV-25, LAV-L, LAV-CC, AND LAV-M.

Plain-Language Summary

Department of Defense obligated $35.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: LIGHT ARMORED VEHICLE VARIANTS LAV-25, LAV-L, LAV-CC, AND LAV-M. Key points: 1. Contract awarded to a foreign government entity, raising questions about direct competition and potential cost efficiencies. 2. The contract covers multiple Light Armored Vehicle (LAV) variants, indicating a broad scope of support. 3. A firm-fixed-price contract suggests that cost risks are primarily borne by the contractor. 4. The duration of the contract (1005 days) indicates a medium-term commitment for these specialized vehicles. 5. Lack of competition suggests potential limitations in market availability or strategic sourcing decisions. 6. The award value is moderate for defense procurement, but specific value-for-money analysis is limited without benchmarks.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the sole-source nature and the award to a foreign government entity. Without competitive bids, it's difficult to assess if the $35.7 million price reflects optimal market value. The firm-fixed-price structure shifts cost risk to the contractor, which can be beneficial if managed effectively, but doesn't inherently guarantee the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The reasons for this approach are not detailed, but it typically implies that only one source was deemed capable or available to meet the requirement. The lack of competition means there was no opportunity for multiple bidders to offer proposals, potentially limiting price discovery and innovation.

Taxpayer Impact: For taxpayers, a sole-source award means there was no direct price competition to drive down costs. This can lead to higher prices compared to a fully competed contract, as the government may not benefit from the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the Department of the Army, receiving critical Light Armored Vehicle variants. Services delivered include the provision of LAV-25, LAV-L, LAV-CC, and LAV-M variants. The geographic impact is primarily within the operational theaters where these vehicles are deployed by the U.S. Army. Workforce implications are likely related to the maintenance, operation, and support of these armored vehicles within the Army.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Award to a foreign government entity (Canadian Commercial Corporation) may introduce complexities in oversight and direct market engagement.
Absence of small business subcontracting data raises questions about opportunities for smaller domestic firms.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Contract covers multiple essential LAV variants, ensuring a range of capabilities.
Award to a government-to-government entity can sometimes streamline procurement processes for specific international agreements.

Sector Analysis

The defense sector, particularly military vehicle manufacturing and sustainment, is characterized by high barriers to entry, specialized technologies, and significant government investment. Contracts for armored vehicles like the LAV are crucial for maintaining force projection capabilities. Spending in this area is often driven by strategic defense needs, technological advancements, and geopolitical considerations. Comparable spending benchmarks would typically involve other large-scale vehicle procurements or sustainment contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no specific information provided regarding subcontracting plans or performance related to small businesses. This suggests that opportunities for small businesses to participate in this specific contract may be limited, and their impact on the broader small business ecosystem from this award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a sole-source award to a foreign government entity, specific oversight mechanisms might involve intergovernmental agreements and potentially the Defense Contract Management Agency (DCMA). Transparency is limited by the non-competitive nature of the award, and Inspector General jurisdiction would apply to ensure proper use of funds and contract compliance.

Related Government Programs

Light Armored Vehicle (LAV) Program
Department of Defense Vehicle Procurement
Foreign Military Sales (FMS) - though this is direct award
Armored Vehicle Manufacturing

Risk Flags

Sole-source award
Award to foreign government entity
Lack of competition
Limited small business participation potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.7 million to CANADIAN COMMERCIAL CORPORATION. LIGHT ARMORED VEHICLE VARIANTS LAV-25, LAV-L, LAV-CC, AND LAV-M.

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 $35.7 million.

What is the period of performance?

Start: 2010-07-30. End: 2013-04-30.

What is the track record of the Canadian Commercial Corporation (CCC) in fulfilling similar defense contracts for the U.S. Department of Defense?

The Canadian Commercial Corporation (CCC) acts as a government-to-government contracting entity for Canadian companies. While CCC has a history of facilitating exports for Canadian firms, its direct track record specifically with the U.S. Department of Defense for large-scale armored vehicle production or sustainment requires detailed examination. Typically, CCC's role is to provide a government guarantee, which can streamline processes but doesn't replace the performance of the underlying Canadian manufacturer. Assessing the specific manufacturer's performance history, alongside CCC's administrative and oversight capabilities in similar contexts, would be crucial for a comprehensive understanding of their reliability on this contract.

How does the $35.7 million contract value compare to historical spending on Light Armored Vehicle variants?

Comparing the $35.7 million contract value requires context on the specific variants procured (LAV-25, LAV-L, LAV-CC, LAV-M) and the quantity of units. Historical spending data for LAV variants can fluctuate significantly based on production runs, upgrades, and sustainment needs. For instance, major production contracts for new LAVs have historically run into hundreds of millions of dollars. This $35.7 million award appears to be for a specific set of vehicles or a sustainment package over a defined period (1005 days). Without knowing the exact number of units or the scope of services, a direct comparison to historical spending is difficult, but it represents a moderate investment within the broader LAV program lifecycle.

What are the primary risks associated with a sole-source award for military armored vehicles?

The primary risks associated with a sole-source award for military armored vehicles include a lack of price competition, which can lead to inflated costs for taxpayers. There's also a reduced incentive for the contractor to innovate or improve efficiency, as they face no direct market pressure. Furthermore, sole-sourcing can limit the government's access to alternative technologies or suppliers, potentially creating vendor lock-in and reducing strategic flexibility. Dependence on a single source can also pose supply chain risks if that source encounters production issues or geopolitical challenges, as might be the case with an award to a foreign entity.

What is the expected program effectiveness given the contract details?

The expected program effectiveness hinges on the reliability and performance of the delivered LAV variants and the contractor's ability to meet the firm-fixed-price terms. The contract covers multiple essential variants (LAV-25, LAV-L, LAV-CC, LAV-M), suggesting a comprehensive approach to meeting specific operational needs. The firm-fixed-price structure implies that the contractor bears the financial risk of cost overruns, which can incentivize efficient execution. However, the effectiveness is also tied to the quality of the vehicles and the support provided, which is harder to gauge without performance metrics or competitive benchmarks. The sole-source nature means effectiveness is largely dependent on the chosen contractor's capabilities and the government's oversight.

Are there any specific performance metrics or key performance indicators (KPIs) associated with this contract?

The provided data does not explicitly detail specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, as a firm-fixed-price contract, the primary performance expectation is the delivery of the specified Light Armored Vehicle variants (LAV-25, LAV-L, LAV-CC, and LAV-M) according to the agreed-upon schedule and quality standards. The Department of Defense would typically have internal quality assurance and acceptance procedures to verify that the delivered vehicles meet technical specifications and operational requirements. The absence of publicly listed KPIs might suggest that these are managed through standard DoD quality assurance processes or are detailed in separate contract clauses not included in this summary.

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: W56HZV10R0304

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

Financial Breakdown

Contract Ceiling: $35,741,911

Exercised Options: $35,741,911

Current Obligation: $35,741,911

Contract Characteristics

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline