DoD awards $32.4M for Construction Machinery to Caterpillar Inc. under Full and Open Competition
Contract Overview
Contract Amount: $32,416,920 ($32.4M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2012-09-05
End Date: 2015-08-31
Contract Duration: 1,090 days
Daily Burn Rate: $29.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: PROCUREMENT OF TYPE I, TYPE II AND NET CLASSES.
Place of Performance
Location: MOSSVILLE, PEORIA County, ILLINOIS, 61552, UNITED STATES OF AMERICA
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $32.4 million to CATERPILLAR INC for work described as: PROCUREMENT OF TYPE I, TYPE II AND NET CLASSES. Key points: 1. Significant award to a single large business, Caterpillar Inc. 2. Contract covers construction machinery, a critical component for military operations. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract duration spans over three years, indicating a substantial need.
Value Assessment
Rating: fair
The award amount of $32.4M for construction machinery appears reasonable given the contract duration and the nature of the equipment. Benchmarking against similar large-scale machinery procurements would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the widest possible range of bidders and promotes price discovery. The presence of 7 bidders suggests a competitive market for this type of equipment.
Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it aims to secure the best value through competitive pricing.
Public Impact
Ensures availability of essential construction machinery for Department of the Army operations. Supports a major defense contractor, Caterpillar Inc., contributing to the industrial base. The procurement process aimed for competitive pricing, potentially saving taxpayer funds. Long-term contract provides stability for both the government and the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases due to economic price adjustment clause.
- Reliance on a single large business contractor for critical equipment.
Positive Signals
- Utilized full and open competition.
- Multiple bidders participated in the procurement process.
- Contract duration aligns with operational needs.
Sector Analysis
The procurement falls under Construction Machinery Manufacturing, a sector vital for infrastructure development and military logistics. Spending benchmarks for this category can vary significantly based on specific equipment types and quantities required.
Small Business Impact
The data indicates that this contract was awarded to a large business (Caterpillar Inc.) and does not show any specific set-asides or participation goals for small businesses. Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The contract was awarded under full and open competition, suggesting a structured procurement process. Oversight would involve monitoring contract performance, adherence to terms, and managing the economic price adjustment clause to ensure fair pricing.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Economic Price Adjustment clause may lead to increased costs.
- Lack of small business participation noted.
- Potential for price increases over the contract duration.
- Reliance on a single primary contractor.
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 $32.4 million to CATERPILLAR INC. PROCUREMENT OF TYPE I, TYPE II AND NET CLASSES.
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 $32.4 million.
What is the period of performance?
Start: 2012-09-05. End: 2015-08-31.
What is the specific breakdown of Type I, Type II, and Net classes of construction machinery procured, and how does this align with the Army's operational requirements?
The provided data does not specify the exact quantities or types of construction machinery within the 'Type I, Type II and Net classes.' A detailed breakdown would be necessary to assess if the procured equipment precisely matches the Army's current and future operational needs, ensuring optimal resource allocation and mission readiness.
How were the economic price adjustments calculated, and what mechanisms were in place to mitigate potential cost overruns for the government?
The contract includes an 'Economic Price Adjustment' (EPA) clause, which allows for modifications to the contract price based on fluctuations in economic factors like labor and material costs. The specific formula and triggers for these adjustments are not detailed here. Effective oversight would involve scrutinizing these adjustments to ensure they are justified and do not lead to excessive costs for the taxpayer.
What was the competitive landscape like beyond the 7 bidders, and could further competition have yielded better pricing or terms?
While 7 bidders participated, indicating some level of competition, it's difficult to ascertain the full competitive landscape without more data. Further analysis could explore if the barriers to entry were high, if potential bidders were excluded, or if alternative procurement strategies could have stimulated even greater competition, potentially leading to more favorable pricing or contract terms for the Department of Defense.
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, 61552
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $32,416,920
Exercised Options: $32,416,920
Current Obligation: $32,416,920
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV08D0169
IDV Type: IDC
Timeline
Start Date: 2012-09-05
Current End Date: 2015-08-31
Potential End Date: 2015-08-31 00:00:00
Last Modified: 2015-03-23
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