DoD's $28.3M generator contract awarded to Cummins Power Generation Inc. for motor and generator manufacturing

Contract Overview

Contract Amount: $28,260,000 ($28.3M)

Contractor: Cummins Power Generation Inc.

Awarding Agency: Department of Defense

Start Date: 2013-07-17

End Date: 2014-08-31

Contract Duration: 410 days

Daily Burn Rate: $68.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BEAR POWER UNITS

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $28.3 million to CUMMINS POWER GENERATION INC. for work described as: BEAR POWER UNITS Key points: 1. The contract value of $28.3 million represents a significant investment in power generation capabilities. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The fixed-price contract type aims to control costs and provide budget certainty. 4. The duration of 410 days indicates a substantial project timeline. 5. The contract falls under the Motor and Generator Manufacturing sector, highlighting specialized industrial needs. 6. The award was made by the Department of the Air Force, a major component of the DoD.

Value Assessment

Rating: good

The contract value of $28.3 million for generator units appears reasonable given the context of defense procurement, which often involves specialized equipment and stringent quality requirements. Benchmarking against similar defense contracts for power generation equipment would provide a more precise value assessment. However, the fixed-price nature of the award suggests an effort to establish clear cost expectations upfront.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 6 bids suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently by driving down prices through market forces. Multiple bidders increase the likelihood of securing the best value.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, which receives essential power generation equipment. The services delivered include the manufacturing and provision of motor and generator units, crucial for operational readiness. The geographic impact is primarily within the United States, where the manufacturing and delivery would likely occur, supporting domestic industrial capacity. Workforce implications include employment within the motor and generator manufacturing sector, potentially benefiting skilled labor in Minnesota where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial fixed-price estimates do not account for unforeseen manufacturing complexities.
Risk of delivery delays impacting Air Force operational timelines if production or logistics face challenges.
Dependence on a single contractor for a critical component could pose supply chain risks.

Positive Signals

Award under full and open competition with multiple bids suggests a competitive market and potential for good value.
Fixed-price contract type provides cost certainty for the government.
Contractor's established presence in motor and generator manufacturing indicates relevant expertise.

Sector Analysis

The Motor and Generator Manufacturing sector (NAICS 335312) is a critical part of the industrial base, supplying essential components for various applications, including defense. The market size for such specialized manufacturing can be substantial, driven by both commercial and government demand. This contract fits within the broader defense industrial base strategy, ensuring access to necessary equipment for military operations. Comparable spending benchmarks would involve analyzing other DoD contracts for similar power generation systems.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Cummins Power Generation Inc. chooses to engage them. Without specific subcontracting plans detailed in the award, it's difficult to assess the direct impact on the small business ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Air Force Equipment Acquisition
Power Generation Systems
Motor and Generator Manufacturing Contracts

Risk Flags

Potential for cost overruns if initial estimates are inaccurate.
Risk of delivery delays impacting operational readiness.
Supply chain vulnerabilities for specialized components.
Quality control challenges in manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.3 million to CUMMINS POWER GENERATION INC.. BEAR POWER UNITS

Who is the contractor on this award?

The obligated recipient is CUMMINS POWER GENERATION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $28.3 million.

What is the period of performance?

Start: 2013-07-17. End: 2014-08-31.

What is the track record of Cummins Power Generation Inc. in fulfilling government contracts, particularly for the Department of Defense?

Cummins Power Generation Inc. has a history of supplying power generation solutions to various government agencies. While specific details on past performance for this exact type of contract with the Air Force would require deeper analysis of historical contract data, Cummins is a well-established manufacturer known for its industrial engines and power generation equipment. Their experience in the commercial sector often translates to a strong capability in meeting government requirements. Reviewing past performance evaluations and any reported issues on similar contracts would provide a more comprehensive understanding of their track record.

How does the awarded price of $28.3 million compare to market rates for similar generator units?

Benchmarking the $28.3 million award against market rates for similar generator units requires detailed specifications of the equipment procured. Factors such as power output (kVA/kW), fuel type, environmental hardening, and specific features (e.g., noise reduction, automatic transfer switches) significantly influence pricing. Without these specifics, a direct comparison is challenging. However, given that this is a defense contract awarded under full and open competition with 6 bidders, the price is likely competitive within the specialized defense procurement landscape. Further analysis would involve comparing unit costs against publicly available data for commercial equivalents or other government awards for comparable systems.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential production delays, quality control issues, and supply chain disruptions for critical components. Mitigation strategies are inherent in the contract structure: the firm fixed-price (FFP) nature incentivizes the contractor to manage costs and deliver on time to maximize profit. The full and open competition with multiple bidders also reduces the risk of relying on a single source. The Department of the Air Force likely has quality assurance representatives (QARs) involved to monitor production and ensure compliance with specifications. Contract clauses regarding timely delivery and performance standards also serve as risk mitigation tools.

How effective is the competition level (6 bidders) in ensuring value for taxpayers?

A competition level of 6 bidders is generally considered robust and indicative of a healthy market for this type of equipment. This level of competition significantly increases the likelihood that the government received competitive pricing and favorable terms. It suggests that multiple manufacturers were interested and capable of meeting the Air Force's requirements, thereby driving down the price through market forces. This contrasts with sole-source or limited competition scenarios where price discovery is less effective, potentially leading to higher costs for taxpayers.

What is the historical spending pattern for similar motor and generator manufacturing contracts by the Department of the Air Force?

Analyzing historical spending patterns for similar contracts by the Department of the Air Force would reveal trends in contract values, competition levels, and awardees within the motor and generator manufacturing sector. This specific contract of $28.3 million awarded in 2013 provides a data point. Understanding the frequency and average value of such awards over time can help contextualize the current expenditure and identify any significant shifts in procurement strategies or market dynamics. A review of past solicitations and awards for generator sets and related equipment would illuminate these patterns.

What are the implications of the fixed-price contract type on cost control and contractor performance?

The firm fixed-price (FFP) contract type is designed to provide the government with cost certainty. Under an FFP contract, the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their costs efficiently and to perform diligently to ensure profitability. For the government, it means the final price is known at the time of award, simplifying budgeting and financial planning. However, it can also lead to less flexibility if changes are needed, and the contractor may be less inclined to incorporate improvements beyond the contract scope unless formally modified. The focus remains on meeting the defined requirements at the agreed-upon price.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cummins Inc. (UEI: 006415160)

Address: 1400 73RD AVE NE, MINNEAPOLIS, MN, 55432

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: $28,260,000

Exercised Options: $28,260,000

Current Obligation: $28,260,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA853309D0004

IDV Type: IDC

Timeline