DoD Awards $34M for 160 Graders to Caterpillar Inc. Under Full and Open Competition
Contract Overview
Contract Amount: $34,031,192 ($34.0M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2010-05-12
End Date: 2014-01-15
Contract Duration: 1,344 days
Daily Burn Rate: $25.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: PURCHASING 160EA GRADERS UNDER CLIN 0300AA, AT A TOTAL DOLLAR VALUE OF $34,006,324.80.
Place of Performance
Location: MOSSVILLE, PEORIA County, ILLINOIS, 61552
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $34.0 million to CATERPILLAR INC for work described as: PURCHASING 160EA GRADERS UNDER CLIN 0300AA, AT A TOTAL DOLLAR VALUE OF $34,006,324.80. Key points: 1. Significant investment in construction machinery for the Department of the Army. 2. Sole awardee is Caterpillar Inc., a major player in the heavy equipment market. 3. Contract type is Fixed Price with Economic Price Adjustment, introducing potential cost volatility. 4. The procurement falls under the Construction Machinery Manufacturing sector.
Value Assessment
Rating: good
The average price per grader is approximately $212,694. This price should be benchmarked against similar government and commercial procurements for graders of comparable specifications and quantities to ensure value.
Cost Per Unit: $212,694
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the single award to Caterpillar Inc. warrants further investigation into the number and competitiveness of bids received to confirm effective price discovery.
Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers as it promotes competitive pricing. However, the final price paid will depend on the specific bids submitted and the economic price adjustment clause.
Public Impact
Ensures operational readiness for construction and engineering tasks within the Department of the Army. Supports a major defense contractor, potentially impacting the heavy equipment manufacturing sector. The economic price adjustment clause could lead to increased costs for taxpayers if market prices for components or labor rise significantly. Procurement of essential heavy machinery for infrastructure projects.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment clause may increase costs.
- Limited number of awards despite full and open competition.
Positive Signals
- Procurement conducted under full and open competition.
- Award to a well-established manufacturer.
Sector Analysis
This procurement falls within the Construction Machinery Manufacturing sector, specifically for graders. Spending benchmarks for similar heavy equipment procurements by the government and private sector should be considered to assess cost-effectiveness.
Small Business Impact
The data indicates no specific set-aside for small businesses in this procurement. The prime contractor, Caterpillar Inc., is a large business. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.
Oversight & Accountability
The contract was awarded under full and open competition, suggesting a standard procurement process. Oversight would focus on the administration of the economic price adjustment clause and ensuring fair pricing throughout the contract duration.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to EPA clause.
- Limited visibility into the number of bids received.
- No indication of small business subcontracting goals.
- Long contract duration (1344 days) increases exposure to market fluctuations.
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 $34.0 million to CATERPILLAR INC. PURCHASING 160EA GRADERS UNDER CLIN 0300AA, AT A TOTAL DOLLAR VALUE OF $34,006,324.80.
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 $34.0 million.
What is the period of performance?
Start: 2010-05-12. End: 2014-01-15.
What was the competitive landscape during the bidding process for these graders?
While the contract was awarded under full and open competition, the data only shows a single awardee, Caterpillar Inc. Further investigation into the bid submissions would be necessary to understand the number of competing bids and the range of pricing offered. This would clarify the extent of competition and its impact on the final negotiated price.
What are the potential risks associated with the 'Fixed Price with Economic Price Adjustment' contract type for this procurement?
The primary risk with an Economic Price Adjustment (EPA) clause is cost escalation. If the prices of raw materials, labor, or other components used in grader manufacturing increase significantly during the contract period, the government will bear these increased costs. This can lead to the final price exceeding initial estimates and potentially exceeding budget.
How does the per-unit cost of these graders compare to industry benchmarks for similar equipment?
The per-unit cost of approximately $212,694 needs to be compared against current market prices for comparable graders from various manufacturers. Factors like specific features, warranty, and delivery terms will influence this comparison. A detailed benchmark analysis is crucial to determine if the government secured a competitive price.
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: $34,031,192
Exercised Options: $34,031,192
Current Obligation: $34,031,192
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV08D0037
IDV Type: IDC
Timeline
Start Date: 2010-05-12
Current End Date: 2014-01-15
Potential End Date: 2014-01-15 00:00:00
Last Modified: 2013-09-06
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