DOD Awards $26.6M Engineering Services Contract to Canadian Commercial Corporation, Not Competed

Contract Overview

Contract Amount: $26,663,055 ($26.7M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2020-04-21

End Date: 2025-12-31

Contract Duration: 2,080 days

Daily Burn Rate: $12.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: STS CONTRACT FOR PM-LAV AND SWORD FMS.

Plain-Language Summary

Department of Defense obligated $26.7 million to CANADIAN COMMERCIAL CORPORATION for work described as: STS CONTRACT FOR PM-LAV AND SWORD FMS. Key points: 1. The contract is for engineering services related to PM-LAV and SWORD FMS. 2. Awarded to Canadian Commercial Corporation, indicating a lack of domestic competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The duration is 2080 days, spanning over five years.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type offers less incentive for cost control compared to fixed-price contracts. Without competitive pricing, it's difficult to assess if the $26.6 million is a fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition for a significant contract value raises concerns about the efficient use of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract (over 5 years) means potential cost increases are locked in. Dependence on a foreign entity for critical engineering services could pose strategic risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Foreign awardee

Positive Signals

Contract supports critical defense systems (PM-LAV, SWORD FMS)

Sector Analysis

Engineering services are crucial for defense systems. The benchmark for such services varies widely based on complexity and duration. A $26.6 million contract over five years for specialized engineering suggests a significant scope of work.

Small Business Impact

This contract was awarded to the Canadian Commercial Corporation and does not indicate any subcontracting opportunities for small businesses. The lack of competition further reduces potential small business involvement.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is performing efficiently and that costs are reasonable throughout the contract's life.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition may lead to inflated costs.
Cost Plus Fixed Fee structure can incentivize overspending.
Long contract duration increases risk of cost escalation.
Award to a foreign entity raises potential supply chain and strategic concerns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to CANADIAN COMMERCIAL CORPORATION. STS CONTRACT FOR PM-LAV AND SWORD FMS.

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 $26.7 million.

What is the period of performance?

Start: 2020-04-21. End: 2025-12-31.

What specific engineering services are being provided under this contract, and how do they align with the stated mission requirements?

The contract is for engineering services related to the Program Manager-Light Armored Vehicle (PM-LAV) and the Foreign Military Sales (FMS) of the SWORD system. These services likely encompass design, development, testing, integration, and sustainment engineering support to ensure the operational readiness and effectiveness of these critical defense platforms for both U.S. and allied forces.

What is the justification for awarding this contract on a sole-source basis, especially given the significant dollar value?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or specific circumstances where only one source can fulfill the requirement. For this contract, the rationale might stem from the Canadian Commercial Corporation's established role or unique expertise related to the PM-LAV and SWORD systems, potentially through existing international agreements or specialized knowledge not readily available elsewhere.

How will the Department of Defense ensure cost control and value for money with a Cost Plus Fixed Fee contract awarded without competition?

To ensure cost control and value, the Department of Defense will likely implement rigorous monitoring of contractor expenditures, performance metrics, and milestones. Regular audits, detailed cost reporting requirements, and strong program management oversight are essential. The fixed fee component provides some incentive for the contractor to manage costs efficiently to maximize their profit margin.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV19R0122

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 350 ALBERT ST SUITE 700, OTTAWA

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

Financial Breakdown

Contract Ceiling: $37,664,030

Exercised Options: $26,663,055

Current Obligation: $26,663,055

Actual Outlays: $4,702,460

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline