Army awards $81.7M contract for three UH-60L Operational Flight Trainers to CAE USA INC

Contract Overview

Contract Amount: $81,731,450 ($81.7M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2014-05-29

End Date: 2024-03-26

Contract Duration: 3,589 days

Daily Burn Rate: $22.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THREE UH-60L OPERATIONAL FLIGHT TRAINERS (OFTS)FOR THE ROYAL SAUDI LAND FORCES.

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $81.7 million to CAE USA INC. for work described as: THREE UH-60L OPERATIONAL FLIGHT TRAINERS (OFTS)FOR THE ROYAL SAUDI LAND FORCES. Key points: 1. Contract awarded for specialized aviation training equipment. 2. Sole-source award indicates limited market availability or specific contractor capability. 3. Long contract duration suggests ongoing training needs. 4. Firm Fixed Price contract type shifts risk to the contractor. 5. Awarded to a single vendor, raising questions about competitive pricing. 6. Training equipment is crucial for maintaining pilot proficiency and safety.

Value Assessment

Rating: fair

The contract value of $81.7 million for three flight trainers appears substantial. Without specific details on the trainers' capabilities and features, a direct comparison to similar contracts is difficult. However, the sole-source nature of the award suggests that competitive benchmarking for pricing may not have been fully utilized, potentially leading to a less favorable price for the government compared to a fully competed scenario. The long duration of the contract also means that the total expenditure over time will be significant.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, CAE USA INC., was solicited. This approach is typically used when there is a lack of competition, such as when a specific technology or capability is only available from a single source, or when urgent and compelling circumstances prevent full and open competition. The absence of multiple bidders means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not secure the best possible price due to the lack of competitive pressure.

Public Impact

The Royal Saudi Land Forces will benefit from advanced training capabilities for their UH-60L helicopter pilots. The contract delivers three Operational Flight Trainers (OFTs), enhancing pilot proficiency and safety. This training capability supports the operational readiness of allied forces. The contract has implications for the aviation training sector and specialized equipment manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration (nearly 10 years) could lead to cost overruns if not managed effectively.
Lack of transparency in the sole-source justification requires careful review.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Award to an established contractor like CAE USA INC. suggests a level of confidence in their ability to deliver.
Specialized training equipment is critical for maintaining operational readiness of allied forces.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on simulation and training equipment. The market for advanced flight simulators is characterized by high barriers to entry due to technological complexity and significant R&D investment. CAE USA INC. is a major player in this niche. Comparable spending benchmarks would typically involve other large-scale simulator procurements for military aircraft, which are often sole-sourced or limited competition due to proprietary technology.

Small Business Impact

The contract data indicates that this was not a small business set-aside. There is no information provided regarding subcontracting plans for small businesses. Given the specialized nature of the equipment, it is possible that the prime contractor relies on a limited number of specialized suppliers, which may or may not include small businesses. Further investigation into subcontracting would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. The firm fixed price nature of the contract provides some level of cost control. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Aircraft Simulation and Training
Foreign Military Sales
Helicopter Pilot Training Systems
Department of the Army Procurement

Risk Flags

Sole-source award requires careful justification and oversight.
Long contract duration increases exposure to market and technological changes.
Lack of competition may lead to suboptimal pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.7 million to CAE USA INC.. THREE UH-60L OPERATIONAL FLIGHT TRAINERS (OFTS)FOR THE ROYAL SAUDI LAND FORCES.

Who is the contractor on this award?

The obligated recipient is CAE USA INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $81.7 million.

What is the period of performance?

Start: 2014-05-29. End: 2024-03-26.

What specific capabilities and features do the three UH-60L Operational Flight Trainers (OFTs) possess, and how do they compare to commercially available alternatives?

The provided data does not detail the specific capabilities and features of the UH-60L OFTs. However, as Operational Flight Trainers, they are expected to simulate the flight environment, aircraft systems, and mission scenarios for the UH-60L Black Hawk helicopter to a high degree of fidelity. This includes realistic cockpit controls, visual systems, motion platforms, and instructor operator stations. Commercial alternatives for similar helicopter types exist, but the specific configuration and certification requirements for military use, especially for allied forces, often necessitate specialized, non-commercial solutions. The sole-source award suggests that CAE USA INC. likely possesses proprietary technology or specific certifications that meet the Royal Saudi Land Forces' unique requirements, making direct commercial benchmarking challenging.

What was the justification for awarding this contract on a sole-source basis, and were any efforts made to explore competitive options?

The justification for a sole-source award typically stems from circumstances where only one responsible source can satisfy the agency's needs. For this contract, common reasons could include unique technical requirements, proprietary technology held by CAE USA INC., or urgent and compelling needs that preclude a full and open competition. The data indicates the contract type as 'NOT COMPETED,' strongly suggesting that a competitive process was not undertaken. While the specific justification document is not provided, the Department of the Army would have had to formally document and approve the sole-source determination, likely after assessing that no other vendor could meet the requirements or that competition would be detrimental to the government's interests.

How does the contract's duration of nearly 10 years (3589 days) impact the overall value and risk for the government?

The extended duration of nearly 10 years for this contract significantly impacts its overall value and risk profile. On the positive side, it provides the Royal Saudi Land Forces with a stable and long-term training solution, ensuring continuous pilot proficiency and operational readiness. It also allows for amortization of development costs over a longer period. However, a long duration also introduces risks. These include potential for technological obsolescence if the UH-60L or its training needs evolve significantly, increased exposure to inflation and economic fluctuations, and the possibility of contractor performance issues or financial instability over such an extended period. The Firm Fixed Price (FFP) nature mitigates some cost risk, but the government remains exposed to risks related to performance and the long-term relevance of the training system.

What is CAE USA INC.'s track record with similar defense training systems, particularly for international clients?

CAE USA INC. has a well-established and extensive track record in developing and providing advanced simulation and training solutions for military aviation globally. They are a recognized leader in the field, known for producing high-fidelity flight simulators for a wide range of aircraft platforms, including helicopters like the UH-60. CAE frequently engages in contracts with the U.S. Department of Defense and numerous international partners, including those in the Middle East. Their experience often involves developing customized training systems that meet specific operational requirements and certifications, which aligns with the nature of this sole-source award for the Royal Saudi Land Forces. Their long-standing presence and numerous successful contracts suggest a strong capability in delivering complex training systems.

Are there any comparable contracts for helicopter Operational Flight Trainers awarded to other vendors, and how does the pricing compare?

Directly comparable contracts for helicopter OFTs are difficult to pinpoint without access to detailed procurement databases and specific contract line item details. However, the market for high-fidelity military flight simulators is generally dominated by a few key players, including CAE, L3Harris, and Collins Aerospace (a Raytheon Technologies company). These systems are highly customized and technologically advanced, leading to significant price variations based on aircraft type, fidelity level, required certifications, and included features. Given that this contract was sole-sourced, a direct price comparison with a competitively awarded contract for a similar system is not feasible. Generally, sole-source awards tend to be higher than competitively bid ones due to the absence of market pressure to offer the lowest possible price.

What are the potential workforce implications of this contract, both for the contractor and the end-user?

For CAE USA INC., this contract likely supports a dedicated team of engineers, software developers, technicians, and project managers involved in the design, manufacturing, testing, and delivery of the flight trainers. The long duration suggests sustained employment opportunities within CAE for these specialized roles. For the Royal Saudi Land Forces, the primary workforce implication is the enhanced capability of their UH-60L pilots. The availability of advanced training simulators allows for more frequent, realistic, and safe training scenarios, leading to a more proficient and operationally ready pilot corps. This can reduce the need for live-flying training for certain objectives, potentially saving on operational costs associated with flight hours, fuel, and maintenance of actual aircraft.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CAE Inc

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: $81,731,450

Exercised Options: $81,731,450

Current Obligation: $81,731,450

Subaward Activity

Number of Subawards: 2009

Total Subaward Amount: $1,552,385,531

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline