DoD Awards $22.5M for 64 Type II Dozers to Caterpillar Inc. Under Full and Open Competition
Contract Overview
Contract Amount: $22,524,621 ($22.5M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2011-09-23
End Date: 2014-09-03
Contract Duration: 1,076 days
Daily Burn Rate: $20.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: PURCHASE 64 EACH T9 TYPE II DOZERS
Place of Performance
Location: MOSSVILLE, PEORIA County, ILLINOIS, 61552
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $22.5 million to CATERPILLAR INC for work described as: PURCHASE 64 EACH T9 TYPE II DOZERS Key points: 1. Significant investment in heavy construction equipment for the Army. 2. Caterpillar Inc. is a dominant player in the construction machinery market. 3. Potential for price fluctuations due to economic price adjustment clause. 4. Spending falls within the Construction Machinery Manufacturing sector.
Value Assessment
Rating: good
The total award of $22.5 million for 64 dozers averages to approximately $351,947 per unit. This price appears competitive given the specialized nature and robust build of Type II dozers, often used in demanding military applications.
Cost Per Unit: $351,947
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust bidding process. This method generally promotes competitive pricing and ensures the government receives the best value through market forces.
Taxpayer Impact: The use of full and open competition is a positive indicator for taxpayer value, as it aims to secure the most favorable pricing through a broad market solicitation.
Public Impact
Ensures operational readiness for Army construction and engineering units. Supports infrastructure development and maintenance projects. Provides critical equipment for diverse operational environments. Contributes to the domestic manufacturing base for heavy machinery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment could lead to cost overruns.
- Long contract duration (over 3 years) increases exposure to market volatility.
Positive Signals
- Awarded under full and open competition.
- Procurement of essential, high-demand equipment.
Sector Analysis
This procurement falls under the Construction Machinery Manufacturing sector, which is vital for both civilian infrastructure and military engineering capabilities. Benchmarks for similar heavy equipment procurements vary widely based on specifications and quantity, but this award appears within a reasonable range for specialized military-grade dozers.
Small Business Impact
While the primary awardee is Caterpillar Inc., a large corporation, the contract's full and open competition nature may have allowed for subcontracting opportunities for small businesses involved in component manufacturing or specialized services within the construction machinery supply chain.
Oversight & Accountability
The contract was awarded under full and open competition, indicating a standard procurement process. Oversight would typically involve contract management by the Department of the Army to ensure timely delivery, adherence to specifications, and proper utilization of funds.
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.
- Long contract duration increases risk of obsolescence and market volatility.
- Potential for underutilization if operational needs change.
- Dependence on a single large manufacturer for a critical equipment type.
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 $22.5 million to CATERPILLAR INC. PURCHASE 64 EACH T9 TYPE II 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 $22.5 million.
What is the period of performance?
Start: 2011-09-23. End: 2014-09-03.
What is the specific impact of the economic price adjustment clause on the final cost?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specified economic factors, such as labor or material costs. Without specific indices or caps defined in the contract, the final cost could exceed the initial $22.5 million award if these factors increase significantly over the contract's duration, potentially impacting the overall value for taxpayers.
What are the risks associated with the long contract duration and the specific type of dozer?
A contract duration of over three years (1076 days) for heavy equipment like Type II dozers carries risks of technological obsolescence, increased maintenance costs due to wear and tear, and potential for higher-than-anticipated price increases under the economic price adjustment clause. Furthermore, if the specific requirements for Type II dozers change due to evolving military needs, the procured equipment might become less suitable over time.
How effectively does this procurement meet the Department of the Army's long-term equipment needs?
This procurement addresses an immediate need for 64 Type II dozers, crucial for construction and engineering tasks. However, the long-term effectiveness depends on the Army's strategic equipment lifecycle management, including maintenance, upgrades, and eventual replacement plans. The fixed-price with economic price adjustment structure aims for cost control but requires diligent oversight to ensure the equipment remains cost-effective throughout its service life.
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: $22,524,621
Exercised Options: $22,524,621
Current Obligation: $22,524,621
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV08D0169
IDV Type: IDC
Timeline
Start Date: 2011-09-23
Current End Date: 2014-09-03
Potential End Date: 2014-09-03 00:00:00
Last Modified: 2014-05-20
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