Dozer procurement for Army exceeds $26.7M, awarded to Caterpillar Inc. under full and open competition

Contract Overview

Contract Amount: $26,743,852 ($26.7M)

Contractor: Caterpillar Inc

Awarding Agency: Department of Defense

Start Date: 2008-12-11

End Date: 2014-06-13

Contract Duration: 2,010 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: FAMILY OF DOZERS

Place of Performance

Location: MOSSVILLE, PEORIA County, ILLINOIS, 61552

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $26.7 million to CATERPILLAR INC for work described as: FAMILY OF DOZERS Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a robust market for construction machinery. 3. Risk indicators include contract type (fixed price with economic price adjustment). 4. Performance context is within the Department of the Army's construction machinery needs. 5. Sector positioning is within the Construction Machinery Manufacturing industry.

Value Assessment

Rating: fair

The contract value of $26.7 million for a family of dozers appears substantial. Benchmarking against similar contracts is difficult without more specific details on the type and quantity of dozers. The fixed-price with economic price adjustment (FPEPA) contract type introduces potential for cost increases over the contract's duration, which warrants careful monitoring. The number of bidders (7) suggests some level of competition, but the final price relative to market rates for comparable equipment would be the key determinant of value.

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. Seven bids were received, suggesting a healthy level of interest and competition for this requirement. A competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition and seven bids received are positive indicators for taxpayers, suggesting that the government likely secured a competitive price for the dozers.

Public Impact

Benefits the Department of the Army by providing essential construction machinery. Services delivered include the supply of a family of dozers. Geographic impact is likely within Army operational areas requiring construction capabilities. Workforce implications may involve training and maintenance personnel for the new equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns if market prices for components or labor increase significantly.
Contract duration of over 5 years requires sustained oversight to ensure performance and cost control.
Potential for obsolescence of technology over the contract life, depending on the specific dozer models procured.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Receipt of 7 bids indicates a competitive marketplace for construction machinery.
Contract awarded to a well-established manufacturer (Caterpillar Inc.) with a track record in heavy equipment.

Sector Analysis

The construction machinery manufacturing sector is a significant part of the industrial base, supplying essential equipment for infrastructure projects, defense operations, and commercial development. This contract fits within the broader category of defense procurement for heavy equipment. Comparable spending benchmarks would depend on the specific models and configurations of dozers, but the overall value suggests a substantial acquisition.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on small businesses is not evident from this award alone. However, the prime contractor, Caterpillar Inc., may engage small businesses for parts, services, or specialized components as part of its supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures would be tied to contract performance clauses, delivery schedules, and equipment specifications. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Construction Equipment Procurement
Heavy Machinery Acquisition
Defense Logistics Agency Equipment Contracts
Tactical Wheeled Vehicle Programs

Risk Flags

Potential for cost increases due to Economic Price Adjustment clause.
Contract duration requires sustained oversight.
Lack of specific model details hinders precise value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to CATERPILLAR INC. FAMILY OF DOZERS

Who is the contractor on this award?

The obligated recipient is CATERPILLAR 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 $26.7 million.

What is the period of performance?

Start: 2008-12-11. End: 2014-06-13.

What specific models and configurations of dozers were procured under this contract, and how do they compare to current market offerings?

The provided data identifies the procurement as a 'FAMILY OF DOZERS' but does not specify the exact models or configurations. This lack of detail makes a direct comparison to current market offerings challenging. Typically, a family of dozers might include various sizes and capabilities (e.g., small, medium, large dozers) tailored for different operational needs. Understanding the specific models would allow for an assessment of their technological relevance, fuel efficiency, and performance features against contemporary equipment available from Caterpillar and its competitors. Without this information, it's difficult to ascertain if the procured dozers represent the latest technology or if they might be older models.

How does the awarded price per dozer, considering the total contract value and estimated quantity, benchmark against similar government or commercial acquisitions?

The total contract value is $26,743,852. The data indicates 'NO' (number of offers) as 7, and 'BR' (base year) as 13305, which likely refers to a base year quantity or value, but it's not explicitly clear. If we assume 'BR' represents a quantity, and if it were, for example, 100 dozers, the average price per dozer would be approximately $267,438. However, without a clear quantity or breakdown of the 'family of dozers,' calculating a precise per-unit cost is impossible. Benchmarking would require knowing the specific models, quantities, and the period of performance. Government contracts often include economic price adjustments, which can complicate direct price comparisons over time. Commercial acquisitions might have different pricing structures and volume discounts.

What are the key performance metrics and delivery schedules associated with this contract, and how has the contractor historically performed on similar contracts?

The provided data includes the start date (2008-12-11) and end date (2014-06-13), indicating a performance period of approximately 5.5 years. Key performance metrics would typically include timely delivery of equipment meeting specified technical requirements, warranty provisions, and potentially training or support services. Historical performance data for Caterpillar Inc. on similar large-scale government contracts for heavy machinery would be crucial for a comprehensive risk assessment. While Caterpillar is a major manufacturer, the specific performance on this contract, such as adherence to schedule and quality standards, would need to be evaluated through contract performance reports or past performance reviews, which are not included in the provided data.

What is the potential impact of the 'Economic Price Adjustment' (EPA) clause on the total contract cost over its duration?

The contract type is 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA). This clause allows for adjustments to the contract price based on fluctuations in specified economic factors, such as labor rates, material costs (e.g., steel, components), or transportation costs. Over a contract duration of approximately 5.5 years (from 2008 to 2014), significant market volatility could lead to substantial price increases. The extent of the impact depends on the specific indices used for adjustment, the caps or limits on adjustments, and the actual market trends during the contract period. Without access to the specific EPA formula and market data from that period, quantifying the exact impact is not possible, but it represents a potential risk for cost overruns compared to a firm fixed-price contract.

How does the procurement of construction machinery align with the Army's broader modernization and operational readiness goals?

The procurement of a family of dozers directly supports the Army's need for construction and engineering capabilities, which are critical for forward operating bases, infrastructure development, and logistical support in various operational environments. Modern, efficient dozers can enhance troop mobility, enable rapid construction of facilities, and improve survivability. Aligning this procurement with modernization goals would involve ensuring the acquired equipment incorporates relevant technological advancements (e.g., improved fuel efficiency, enhanced operator safety, reduced maintenance needs) and is suitable for deployment in diverse theaters of operation. Readiness goals are directly supported by having the necessary equipment available for engineering tasks, disaster response, and combat support operations.

Industry Classification

NAICS: Manufacturing › Agriculture, Construction, and Mining Machinery Manufacturing › Construction Machinery Manufacturing

Product/Service Code: CONSTRUCT/MINE/EXCAVATE/HIGHWY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 7

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Caterpillar Inc. (UEI: 005070479)

Address: 14009 OLD GALENA RD TC-A, MOSSVILLE, IL, 16

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $26,743,852

Exercised Options: $26,743,852

Current Obligation: $26,743,852

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV08D0169

IDV Type: IDC

Timeline