DoD Awards $686M for Construction Machinery, Primarily Fixed Price with EPA
Contract Overview
Contract Amount: $6,860,124 ($6.9M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2024-07-24
End Date: 2026-04-15
Contract Duration: 630 days
Daily Burn Rate: $10.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: 8510769573!BULLDOZER
Place of Performance
Location: IRVING, DALLAS County, TEXAS, 75039
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $6.9 million to CATERPILLAR INC for work described as: 8510769573!BULLDOZER Key points: 1. Significant contract value of $686 million for construction machinery. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Fixed Price with Economic Price Adjustment (EPA) contract type introduces some risk. 4. Spending is within the Construction Machinery Manufacturing sector.
Value Assessment
Rating: good
The contract value of $686 million is substantial. Pricing is fixed with economic price adjustments, which can mitigate inflation risk but may lead to higher initial bids compared to firm fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, indicating a robust process for soliciting bids. This method generally promotes competitive pricing and allows for a wide range of potential contractors to participate.
Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers, as it aims to secure the best value through market forces.
Public Impact
Ensures availability of critical construction machinery for Department of Defense operations. Supports the construction machinery manufacturing industry, potentially impacting jobs and supply chains. Economic price adjustments may lead to cost fluctuations over the contract period.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause can increase final costs.
- Contract awarded to a single large business, no small business participation noted.
Positive Signals
- Full and open competition utilized.
- Significant contract value awarded.
Sector Analysis
This contract falls under Construction Machinery Manufacturing, a sector vital for infrastructure and military operations. Benchmarks for similar large-scale machinery procurements vary widely based on specific equipment and duration.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). Further analysis would be needed to determine if small business set-asides were considered or if opportunities were missed.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a key component of DoD oversight for supply chain management. The use of full and open competition suggests a structured procurement process.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause.
- No small business participation noted.
- Contract awarded to a single large business.
Tags
construction-machinery-manufacturing, department-of-defense, tx, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.9 million to CATERPILLAR INC. 8510769573!BULLDOZER
Who is the contractor on this award?
The obligated recipient is CATERPILLAR INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $6.9 million.
What is the period of performance?
Start: 2024-07-24. End: 2026-04-15.
What is the expected impact of the economic price adjustment on the final contract cost?
The economic price adjustment (EPA) allows for changes in contract price based on fluctuations in specified economic factors, such as labor or material costs. While it protects the contractor from unforeseen cost increases, it introduces uncertainty for the government regarding the final expenditure. The actual impact depends on the specific index used and the volatility of the underlying economic indicators during the contract period.
What are the risks associated with awarding a large contract to a single large business without small business participation?
Awarding a large contract solely to a large business can limit opportunities for small businesses to gain experience and grow. It may also reduce overall competition in the long run if small businesses are consistently excluded from significant contracts. This can potentially lead to less innovation and higher prices if the large business faces limited competitive pressure.
How does the fixed-price nature with EPA compare to other contract types in terms of cost control for the government?
A fixed-price contract with EPA offers more cost certainty than a cost-plus contract but less than a firm fixed-price contract. It aims to balance contractor risk with government cost control by allowing price adjustments for external economic factors. This is generally considered a reasonable approach for long-term contracts where cost volatility is a concern, but it requires careful monitoring of the adjustment indices.
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
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Caterpillar Inc.
Address: 5205 N O CONNOR BLVD STE 100, IRVING, TX, 75039
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $6,860,124
Exercised Options: $6,860,124
Current Obligation: $6,860,124
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE8EC23D0002
IDV Type: IDC
Timeline
Start Date: 2024-07-24
Current End Date: 2026-04-15
Potential End Date: 2026-04-15 00:00:00
Last Modified: 2025-12-22
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