DoD's $51M Motorized Grader Contract with Caterpillar Inc. Awarded via Full and Open Competition
Contract Overview
Contract Amount: $50,969,040 ($51.0M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2009-02-20
End Date: 2012-03-19
Contract Duration: 1,123 days
Daily Burn Rate: $45.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: MOTORIZED GRADER
Place of Performance
Location: MOSSVILLE, PEORIA County, ILLINOIS, 61552
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $51.0 million to CATERPILLAR INC for work described as: MOTORIZED GRADER Key points: 1. Significant spending on construction machinery, with a substantial portion allocated to Caterpillar Inc. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. Potential risks include price fluctuations due to economic price adjustment clauses. 4. The sector is Construction Machinery Manufacturing, a critical component of infrastructure development.
Value Assessment
Rating: good
The contract value of $50.97 million over approximately three years appears reasonable for specialized construction equipment. Benchmarking against similar large-scale grader procurements would provide a more precise assessment.
Cost Per Unit: $45,387 (average per unit)
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This method generally promotes price discovery and can lead to more favorable pricing for the government.
Taxpayer Impact: The competitive nature of the award suggests taxpayers likely benefited from a fair market price, though economic price adjustments could introduce future cost variability.
Public Impact
Essential for military base construction and maintenance, ensuring operational readiness. Supports the construction industry and manufacturing jobs within the United States. The use of economic price adjustments may lead to increased costs for taxpayers if inflation rises significantly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause introduces cost uncertainty.
- Lack of small business participation noted.
Positive Signals
- Awarded through full and open competition.
- Clear contract duration and defined scope.
Sector Analysis
The Department of Defense's procurement of construction machinery falls within the broader manufacturing sector. Spending benchmarks for this category are often tied to infrastructure projects and military base development, with significant federal investment typically seen during periods of increased construction activity.
Small Business Impact
The data indicates no specific allocation or award to small businesses for this contract. Further analysis would be needed to determine if opportunities were missed or if the nature of the procurement inherently favored larger manufacturers.
Oversight & Accountability
The contract was awarded by the Department of the Army, a component of the DoD. Standard oversight mechanisms for federal contracts would apply, including performance monitoring and financial accountability, to ensure the equipment meets specifications and is delivered on time.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- No small business participation identified.
- Potential for price increases due to fluctuating economic conditions.
- Dependence on a single large manufacturer (Caterpillar Inc.).
Tags
construction-machinery-manufacturing, department-of-defense, il, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.0 million to CATERPILLAR INC. MOTORIZED GRADER
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 $51.0 million.
What is the period of performance?
Start: 2009-02-20. End: 2012-03-19.
What is the potential impact of the economic price adjustment on the total contract cost over its lifespan?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on changes in economic conditions, such as inflation. Without specific indices or caps defined in the contract, the total cost could significantly exceed the initial $50.97 million if inflation is high during the contract period, potentially impacting the government's budget and taxpayer burden.
How does the average per-unit cost of $45,387 compare to industry benchmarks for similar motorized graders?
The average per-unit cost of $45,387 appears competitive, especially considering the potential for specialized military-grade features or configurations. However, a definitive assessment requires comparison with current market prices for comparable models from other manufacturers, factoring in volume discounts and specific contract terms like delivery and warranty.
What oversight mechanisms were in place to ensure the quality and timely delivery of the motorized graders?
Standard DoD contract oversight would typically involve contract officers, quality assurance representatives, and potentially site inspectors. These mechanisms ensure adherence to specifications, monitor production progress, and verify delivery schedules. The contract's duration and the agency involved suggest established procedures were likely followed.
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: 2
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, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $50,969,040
Exercised Options: $50,969,040
Current Obligation: $50,969,040
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV08D0037
IDV Type: IDC
Timeline
Start Date: 2009-02-20
Current End Date: 2012-03-19
Potential End Date: 2012-03-19 00:00:00
Last Modified: 2012-07-05
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