Department of Defense awards $52.3M contract for light armored vehicle support to Saudi Arabia

Contract Overview

Contract Amount: $52,319,544 ($52.3M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2016-07-25

End Date: 2023-07-31

Contract Duration: 2,562 days

Daily Burn Rate: $20.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SERVICES CONTRACT FOR FIELD SERVICE REPRESENTATIVES IN SUPPORT OF LIGHT ARMORED VEHICLES FOR THE SAUDI ARABIAN MINISTRY OF NATIONAL GUARD.

Plain-Language Summary

Department of Defense obligated $52.3 million to CANADIAN COMMERCIAL CORPORATION for work described as: IGF::OT::IGF SERVICES CONTRACT FOR FIELD SERVICE REPRESENTATIVES IN SUPPORT OF LIGHT ARMORED VEHICLES FOR THE SAUDI ARABIAN MINISTRY OF NATIONAL GUARD. Key points: 1. Contract awarded to Canadian Commercial Corporation for field service representatives. 2. Significant duration of 2562 days indicates a long-term support requirement. 3. Cost Plus Fixed Fee contract type may incentivize cost overruns. 4. Sole-source award raises questions about potential lack of competition. 5. Services support light armored vehicles for the Saudi Arabian Ministry of National Guard. 6. Contract falls under 'All Other Professional, Scientific, and Technical Services' NAICS code.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specific nature and international focus. The Cost Plus Fixed Fee (CPFF) structure, while common for complex services, carries inherent risks of cost escalation if not managed tightly. Without comparable contracts for similar international military support services, assessing whether the $52.3 million represents fair value is difficult. The long duration suggests a substantial need, but the pricing mechanism warrants close scrutiny to ensure efficiency.

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 Canadian Commercial Corporation was the only entity considered for this requirement. This approach bypasses the typical competitive bidding process, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The rationale for a sole-source award, especially for a significant dollar amount, would need to be clearly justified.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to a higher overall expenditure for this service.

Public Impact

The primary beneficiary is the Saudi Arabian Ministry of National Guard, receiving support for their light armored vehicles. Services delivered include field service representatives to maintain and support military equipment. The geographic impact is primarily in Saudi Arabia, where the vehicles are operated. Workforce implications involve personnel deployed to support the contract, likely including technical specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Lack of transparency in the justification for sole-source award.
Long contract duration increases exposure to potential scope creep or changing requirements.
International nature of the contract may add complexity to oversight and performance monitoring.

Positive Signals

Contract addresses a specific and potentially critical need for military equipment support.
Canadian Commercial Corporation may have unique expertise or existing relationship facilitating this support.
Long duration suggests a stable, ongoing requirement that can provide consistent work.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically supporting defense-related equipment. The market for defense logistics and technical support services is substantial, often involving specialized contractors with specific security clearances and expertise. While this contract is with a foreign military, it aligns with broader trends in defense spending for equipment maintenance and operational readiness. Comparable spending benchmarks are difficult to establish due to the unique international and sole-source nature of this award.

Small Business Impact

There is no indication that this contract included small business set-asides. The award to the Canadian Commercial Corporation, a government agency, suggests that subcontracting opportunities for U.S. small businesses may be limited unless specifically incorporated into the prime contract's terms. The absence of small business participation could mean missed opportunities to leverage the agility and innovation of the small business sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, specifically the Department of the Army. Given the international nature and sole-source award, robust oversight mechanisms are crucial to ensure accountability and transparency. This includes monitoring performance, verifying costs, and ensuring adherence to contract terms. The Inspector General's office may have jurisdiction depending on the specific funding and nature of the services provided.

Related Government Programs

Foreign Military Sales Program
Defense Logistics Agency Support Contracts
International Security Assistance Programs

Risk Flags

Sole-source award
Cost-reimbursable contract type
Long contract duration
International contract complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.3 million to CANADIAN COMMERCIAL CORPORATION. IGF::OT::IGF SERVICES CONTRACT FOR FIELD SERVICE REPRESENTATIVES IN SUPPORT OF LIGHT ARMORED VEHICLES FOR THE SAUDI ARABIAN MINISTRY OF NATIONAL GUARD.

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 $52.3 million.

What is the period of performance?

Start: 2016-07-25. End: 2023-07-31.

What is the specific justification for awarding this contract on a sole-source basis to the Canadian Commercial Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the requirement, or in cases of urgent need. For international contracts, reasons might include existing intergovernmental agreements, unique capabilities of the foreign entity, or specific national security considerations. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale. Without this justification, it is difficult to assess whether the lack of competition was warranted or if it potentially disadvantaged the government by limiting price discovery and alternative solutions.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing structures for similar international defense support services?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs incurred plus a fixed fee representing profit. This structure is often used for complex services where the scope is not fully defined or is subject to change, such as long-term technical support. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but carries a higher risk of cost overruns for the government, as the contractor is incentivized to incur costs to complete the work, while their profit remains fixed. Other structures like Cost Plus Incentive Fee (CPIF) tie profit to performance metrics, potentially offering better value. For international defense support, CPFF is common due to the inherent uncertainties, but requires stringent cost monitoring and controls to mitigate risks.

What are the potential risks associated with the long duration (2562 days) of this contract?

The long duration of 2562 days (approximately 7 years) for this contract presents several potential risks. Firstly, it increases the likelihood of scope creep, where the requirements may evolve significantly over the contract period, potentially leading to cost increases if not managed through formal contract modifications. Secondly, maintaining consistent performance and quality over such an extended period can be challenging. Thirdly, the longer the contract, the greater the exposure to economic fluctuations, such as inflation or currency exchange rate volatility, which could impact the overall cost. Finally, a prolonged contract term might delay the adoption of newer technologies or more efficient support methods that could become available during its lifespan.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract to measure the effectiveness of the field service representatives?

The provided data does not specify any performance metrics or Key Performance Indicators (KPIs) for this contract. In a Cost Plus Fixed Fee contract, especially one awarded on a sole-source basis for international support, the effectiveness of field service representatives is typically monitored through regular reporting, site visits, and feedback from the end-user (Saudi Arabian Ministry of National Guard). However, without explicit KPIs defined in the contract, it can be challenging to objectively measure and benchmark performance. Establishing clear metrics related to response times, equipment uptime, technical accuracy, and customer satisfaction would be crucial for ensuring value and accountability.

What is the historical spending pattern for similar services provided by the Department of Defense to foreign military entities?

Historical spending patterns for similar services by the Department of Defense to foreign military entities vary widely depending on the country, the type of equipment, and the nature of the support. Programs like Foreign Military Sales (FMS) facilitate the transfer of U.S. defense articles, services, and training to allies. Spending can range from millions to billions of dollars annually across numerous countries. Contracts for technical support, maintenance, and training are common components of these sales. Analyzing specific historical data for Saudi Arabia or comparable nations would reveal trends in contract types (e.g., FFP, CPFF), durations, and overall investment in maintaining military readiness through external support services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV16R0091

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 350 RUE ALBERT ST SUITE 700, OTTAWA

Business Categories: Category Business, Foreign Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $52,319,544

Exercised Options: $52,319,544

Current Obligation: $52,319,544

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline