Department of the Army awards $18.5M for jump platforms, raising questions about competition and value

Contract Overview

Contract Amount: $18,548,328 ($18.5M)

Contractor: Canadian Commercial Corporation

Awarding Agency: Department of Defense

Start Date: 2008-02-15

End Date: 2016-06-30

Contract Duration: 3,058 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF THREE REPLACEMENT JUMP PLATFORMS FOR GOLDEN KNIGHTS.

Plain-Language Summary

Department of Defense obligated $18.5 million to CANADIAN COMMERCIAL CORPORATION for work described as: PROCUREMENT OF THREE REPLACEMENT JUMP PLATFORMS FOR GOLDEN KNIGHTS. Key points: 1. The contract for jump platforms was not competed, suggesting potential missed opportunities for cost savings. 2. A firm-fixed-price contract was used, which shifts some risk to the government. 3. The duration of the contract (over 8 years) is substantial, requiring careful performance monitoring. 4. The procurement falls under Aircraft Manufacturing, a specialized sector. 5. The sole awardee, Canadian Commercial Corporation, requires further investigation into its role and pricing. 6. The lack of competition may limit price discovery and potentially lead to higher costs for taxpayers.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and the specialized nature of the equipment. The firm-fixed-price structure, while providing cost certainty, can sometimes lead to higher prices if not adequately negotiated in a competitive environment. Without comparable contract data or market research, it's difficult to definitively assess if $18.5 million represents a fair price for three jump platforms over an eight-year period. The absence of competition is a significant indicator that the value for money may not have been optimized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances like international agreements. The lack of competition means there were no other bidders to compare against, which can hinder price negotiation and potentially lead to higher costs for the government. The rationale for not competing this requirement needs further scrutiny to ensure it was fully justified.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing. This can result in taxpayers potentially paying more than they would if multiple vendors had vied for the contract.

Public Impact

The primary beneficiaries are the Golden Knights, the U.S. Army's parachute team, who will receive essential equipment for their operations. The contract delivers three replacement jump platforms, critical for training and demonstration activities. The geographic impact is primarily within the Department of Defense's operational and training facilities. Workforce implications are likely minimal, as the contract focuses on equipment procurement rather than extensive service provision.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and missed opportunities for better value.
The long contract duration (over 8 years) increases the risk of price escalation or performance issues going unaddressed.
Firm-fixed-price contracts can sometimes result in higher costs if the initial price is not aggressively negotiated.
The specialized nature of aircraft manufacturing may limit the pool of potential suppliers, contributing to sole-source awards.

Positive Signals

The contract ensures the Golden Knights have necessary, specialized equipment for their demanding mission.
A firm-fixed-price contract provides cost certainty for the government, aiding budget planning.
The Canadian Commercial Corporation is an established entity, potentially offering a reliable supply chain.

Sector Analysis

The Aircraft Manufacturing sector (NAICS 336411) is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Procurements in this area often involve specialized components and stringent quality requirements. Given the niche nature of jump platforms for a specialized unit like the Golden Knights, it's plausible that the supplier pool is limited, contributing to the sole-source award. Comparable spending benchmarks are difficult to establish without more specific details on the platforms' capabilities and market dynamics.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans. Given the specialized nature of the equipment and the sole-source award, it is unlikely that small businesses played a significant role in this specific procurement. Further analysis would be needed to determine if opportunities for small business participation were overlooked.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Transparency is limited due to the sole-source nature of the award. Accountability measures would typically involve contract performance reviews and adherence to the firm-fixed-price terms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Specialized Military Equipment Acquisition
Golden Knights Support Contracts
Canadian Commercial Corporation Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Long Contract Duration
Sole-Source Award Justification
Specialized Equipment Procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to CANADIAN COMMERCIAL CORPORATION. PROCUREMENT OF THREE REPLACEMENT JUMP PLATFORMS FOR GOLDEN KNIGHTS.

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 $18.5 million.

What is the period of performance?

Start: 2008-02-15. End: 2016-06-30.

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

The provided data indicates the contract was 'NOT COMPETED,' which typically implies a sole-source award. The specific justification for this approach is not detailed in the provided data. Common reasons for sole-source procurements include a lack of available competition, urgent and compelling needs, or specific statutory authorities. For this contract, it's possible that only the Canadian Commercial Corporation (or its designated supplier) possessed the unique capabilities or technology required for these specialized jump platforms, or that international agreements facilitated this direct award. Without further documentation from the Department of the Army, the precise rationale remains speculative but is a critical area for further inquiry.

How does the $18.5 million cost compare to similar jump platform procurements or market rates?

Directly comparing the $18.5 million cost for three jump platforms is difficult without more specific information on the platforms' specifications, capabilities, and the contract's duration. The provided data indicates a contract duration of over 8 years (3058 days). If this cost is for the entire period, it averages approximately $2.3 million per year for three platforms. However, without access to market research, previous competitive bids for similar equipment, or detailed technical specifications, it's impossible to benchmark this price effectively. The lack of competition further complicates value assessment, as there's no baseline from competing offers to gauge reasonableness.

What are the potential risks associated with a firm-fixed-price contract for specialized equipment?

A firm-fixed-price (FFP) contract, while offering cost certainty to the buyer, can introduce risks if the initial price is not accurately estimated or if unforeseen issues arise. For specialized equipment like jump platforms, the contractor bears the risk of cost overruns. However, if the initial price is set too high due to inadequate market analysis or lack of competition, the government may end up paying a premium. Risks also include potential quality compromises if the contractor seeks to reduce costs, although stringent quality assurance measures can mitigate this. Given the sole-source nature, the government has less leverage to negotiate a lower price, potentially increasing the risk of paying more than necessary.

What is the track record of the Canadian Commercial Corporation in fulfilling similar defense contracts?

The Canadian Commercial Corporation (CCC) is a Canadian Crown corporation that facilitates international trade for Canadian companies. While CCC itself doesn't manufacture goods, it acts as a contracting agent, often for defense procurements. Its track record involves facilitating numerous government-to-government contracts. To assess its performance on this specific contract, one would need to examine performance reports, delivery timelines, and any quality issues encountered during the contract's lifespan (2008-2016). Information on CCC's general performance in defense contracting suggests a capacity to manage complex international agreements, but specific details regarding jump platform procurements would require deeper investigation into contract execution.

How does the duration of this contract (over 8 years) impact its overall value and risk?

The extended duration of this contract, spanning over eight years, presents both potential benefits and risks. On the positive side, it could provide stability and ensure a consistent supply of critical equipment for the Golden Knights throughout their operational life. It might also allow for better long-term planning and potentially volume discounts if the platforms were procured in phases. However, a long duration also increases the risk of obsolescence, technological advancements rendering the platforms outdated, or unforeseen maintenance and support cost increases. Furthermore, it extends the period during which the government is locked into a potentially non-competitive price, making it harder to adapt to market changes or secure better deals if new suppliers emerge.

What oversight mechanisms were in place for this sole-source, firm-fixed-price contract?

For a sole-source, firm-fixed-price contract, oversight typically focuses on ensuring the contractor meets the defined specifications and delivery schedules. The Department of the Army would have assigned contract officers and potentially technical representatives to monitor performance. Oversight would involve verifying that the delivered jump platforms conform to the agreed-upon technical requirements and are delivered by the specified dates. Since it's FFP, the primary financial oversight is ensuring the contractor adheres to the agreed price and that no unallowable costs are incurred. Given the long duration, periodic reviews and acceptance testing at key milestones would be crucial for effective oversight.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ07R0370

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: $18,548,328

Exercised Options: $18,548,328

Current Obligation: $18,548,328

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline