DoD's $36M UH-60M flight trainer contract awarded to CAE USA Inc. lacked competition

Contract Overview

Contract Amount: $36,176,282 ($36.2M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2013-02-15

End Date: 2017-11-07

Contract Duration: 1,726 days

Daily Burn Rate: $21.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UH-60M OPERATIONAL FLIGHT TRAINER (OFT)

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $36.2 million to CAE USA INC. for work described as: UH-60M OPERATIONAL FLIGHT TRAINER (OFT) Key points: 1. The contract was awarded on a sole-source basis, indicating a lack of competitive bidding. 2. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns. 3. The contract duration of 1726 days (approx. 4.7 years) represents a significant, long-term commitment. 4. The contractor, CAE USA Inc., is a significant player in the aerospace and defense simulation market. 5. The absence of competition raises questions about potential overpayment and value for taxpayer money. 6. The contract's focus on operational flight training for the UH-60M Black Hawk helicopter highlights its critical role in military readiness.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to benchmark the pricing for this UH-60M Operational Flight Trainer (OFT). The total value of approximately $36.18 million over nearly five years suggests a substantial investment. However, the lack of a competitive process means there's no clear market validation of the price. Comparisons to similar training systems or contracts would be necessary to assess value for money, but such data is not readily available in this context. The firm-fixed-price nature shifts cost risk to the contractor, which can be positive, but the overall value proposition is obscured by the non-competitive award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one bidder, CAE USA Inc., was solicited or considered for this requirement. The lack of competition limits the government's ability to explore alternative solutions or negotiate the best possible price through a bidding process. It suggests that either the government identified a unique capability only CAE could provide, or that the procurement process did not adequately explore competitive options.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no market pressure to drive down prices. This limits the government's leverage in negotiations and potentially results in less value for the allocated funds.

Public Impact

Pilots and aircrews operating the UH-60M Black Hawk helicopter benefit from advanced training capabilities. The contract delivers essential operational flight training services, enhancing pilot proficiency and mission readiness. The training services are likely delivered within the United States, supporting domestic military operations. The contract supports specialized jobs in simulation technology, engineering, and training instruction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated costs for taxpayers.
Sole-source award raises concerns about the thoroughness of the procurement process.
The long contract duration could lock the government into a potentially suboptimal solution.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Contract supports critical training for a key military helicopter platform.
Contractor is an established provider of simulation and training systems.

Sector Analysis

The defense simulation and training market is a significant segment within the broader aerospace and defense industry. Companies like CAE USA Inc. specialize in developing and providing sophisticated training solutions, including flight simulators, for various military platforms. This contract for the UH-60M OFT fits within this sector, addressing the need for realistic and cost-effective pilot training. Spending in this area is driven by the continuous need for pilot proficiency and the desire to reduce the operational costs and risks associated with live flight training.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests it is not a small business prime contract. Therefore, the primary impact on small businesses would likely be through potential subcontracting opportunities, which are not detailed in the provided data. Without specific subcontracting plans, it's difficult to assess the extent to which small businesses will benefit from this award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices. Specific oversight mechanisms would include contract performance monitoring, financial audits, and quality assurance checks to ensure the training services meet the required standards. The Defense Contract Management Agency (DCMA) is listed as the 'sa' (servicing agency), indicating their role in contract administration and oversight. Transparency is generally maintained through contract databases, but detailed operational oversight specifics are not provided.

Related Government Programs

UH-60 Black Hawk Helicopter Procurement
Aviation Training Systems
Defense Simulation and Training Contracts
Fixed-Wing and Rotary-Wing Flight Simulators

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.2 million to CAE USA INC.. UH-60M OPERATIONAL FLIGHT TRAINER (OFT)

Who is the contractor on this award?

The obligated recipient is CAE USA INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $36.2 million.

What is the period of performance?

Start: 2013-02-15. End: 2017-11-07.

What is the track record of CAE USA Inc. in providing similar flight training systems to the Department of Defense?

CAE USA Inc. has a well-established track record in providing simulation and training solutions to the Department of Defense and other military organizations globally. They are known for developing advanced flight simulators, including full-mission simulators, for a wide range of aircraft platforms. Their expertise encompasses not only hardware development but also integrated training systems and curriculum design. For the UH-60 platform specifically, CAE has a history of delivering training devices that meet rigorous military standards. This includes simulators designed to replicate various operational scenarios, environmental conditions, and aircraft malfunctions, thereby enhancing pilot readiness and safety. Their long-standing presence in the defense sector suggests a deep understanding of military training requirements and a capacity to deliver complex training solutions.

How does the cost of this UH-60M OFT contract compare to other similar training systems procured by the DoD?

Direct cost comparisons for this specific UH-60M OFT contract are challenging due to its sole-source nature and the lack of readily available benchmark data for comparable systems. However, the total contract value of approximately $36.18 million over roughly 4.7 years, for a firm-fixed-price definitive contract, suggests a significant investment. The cost per year is roughly $7.7 million. To assess value, one would need to compare this to the cost of procuring and operating similar high-fidelity flight simulators for other rotary-wing aircraft or even fixed-wing platforms, considering factors like simulator fidelity, maintenance, and training hours delivered. Without access to detailed pricing structures or competitive bids for analogous systems, a definitive value-for-money assessment remains difficult. The absence of competition inherently limits the ability to establish a clear market price.

What are the primary risks associated with a sole-source award for a critical training system like the UH-60M OFT?

The primary risk associated with a sole-source award for a critical training system like the UH-60M OFT is the potential for inflated costs due to the lack of competitive pressure. Without multiple bidders vying for the contract, the government may end up paying a premium for the goods or services. Another significant risk is the potential for a suboptimal solution, as the government does not benefit from the innovation and diverse approaches that competition can foster. There's also a risk that the sole-source provider might not be as responsive to evolving requirements or might have less incentive to maintain high service levels compared to a contractor operating in a competitive environment. Furthermore, sole-source awards can raise concerns about the fairness and transparency of the procurement process, potentially leading to perceptions of favoritism or inefficiency.

How effective is the UH-60M OFT in enhancing pilot proficiency and overall military readiness?

Operational Flight Trainers (OFTs) like the UH-60M OFT are designed to be highly effective tools for enhancing pilot proficiency and contributing significantly to overall military readiness. These simulators provide a safe and controlled environment for pilots to practice a wide range of flight maneuvers, emergency procedures, and mission scenarios that would be too dangerous, costly, or impractical to replicate in actual aircraft. The UH-60M OFT, in particular, would allow pilots to train for complex operations, adverse weather conditions, and combat environments, thereby building critical skills and decision-making capabilities. By offering a high degree of realism and repeatability, simulators help pilots achieve and maintain a high level of competency, reducing the need for expensive and resource-intensive live flight hours while ensuring pilots are prepared for real-world missions. This contributes directly to the effectiveness and readiness of units operating the UH-60M Black Hawk.

What has been the historical spending trend for UH-60M related training systems by the Department of Defense?

Analyzing the historical spending trend for UH-60M related training systems requires access to comprehensive historical contract data beyond this single award. However, it is reasonable to infer that spending on training systems for a widely operated platform like the UH-60M Black Hawk would be substantial and ongoing throughout its service life. The DoD consistently invests in simulation and training to maintain pilot proficiency and operational readiness. Spending typically fluctuates based on fleet modernization, new training requirements, and the lifecycle of training equipment. Contracts for simulators often involve initial procurement costs followed by sustainment, upgrades, and potentially new simulator development as the aircraft evolves or new mission sets emerge. Without specific historical data for this contract vehicle or related procurements, it's difficult to pinpoint precise trends, but the continuous need for effective training suggests sustained investment in this area.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W900KK12R0056

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3 Technologies, Inc. (UEI: 008898884)

Address: 2200 ARLINGTON DOWNS RD, ARLINGTON, TX, 76011

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,176,282

Exercised Options: $36,176,282

Current Obligation: $36,176,282

Subaward Activity

Number of Subawards: 2168

Total Subaward Amount: $1,260,966,669

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline