DoD Awards $148.6M for Construction Machinery to Caterpillar Inc. Under Full and Open Competition
Contract Overview
Contract Amount: $14,859,589 ($14.9M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2024-08-20
End Date: 2026-05-15
Contract Duration: 633 days
Daily Burn Rate: $23.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: 8510836654!ARMRD LDR
Place of Performance
Location: IRVING, DALLAS County, TEXAS, 75039
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $14.9 million to CATERPILLAR INC for work described as: 8510836654!ARMRD LDR Key points: 1. Significant award to a major defense contractor for essential construction equipment. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces inflation risk. 4. Spending aligns with the Construction Machinery Manufacturing sector.
Value Assessment
Rating: good
The award value of $148.6 million for construction machinery appears reasonable given the contract duration and the nature of the equipment. Benchmarking against similar large-scale defense procurements for heavy machinery would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The use of full and open competition is taxpayer-friendly as it drives down costs through market forces, ensuring efficient use of public funds.
Public Impact
Ensures readiness for military construction and engineering projects. Supports the operational capabilities of the Department of Defense. Impacts the construction machinery manufacturing industry and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may lead to cost overruns due to inflation.
- Long contract duration (633 days) increases exposure to market volatility.
Positive Signals
- Awarded under full and open competition, promoting value.
- Procurement of essential equipment for defense operations.
Sector Analysis
This award falls within the Construction Machinery Manufacturing sector, which is critical for infrastructure development and military engineering capabilities. Spending benchmarks for similar large-scale defense equipment procurements are typically in the tens to hundreds of millions of dollars.
Small Business Impact
While the prime contractor is Caterpillar Inc., a large corporation, the contract may indirectly benefit small businesses through subcontracts for parts, services, or specialized components. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Standard oversight mechanisms for large procurement contracts, including performance monitoring and financial audits, should be in place to ensure compliance and accountability.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost increases due to Economic Price Adjustment.
- Sole prime contractor dependency for critical equipment.
- Long contract duration increases exposure to market volatility.
- Lack of specific per-unit cost data for detailed benchmarking.
Tags
construction-machinery-manufacturing, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.9 million to CATERPILLAR INC. 8510836654!ARMRD LDR
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 $14.9 million.
What is the period of performance?
Start: 2024-08-20. End: 2026-05-15.
What is the estimated cost impact of the economic price adjustment clause over the contract's duration?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as material costs or labor rates. Without specific indices and projected inflation rates, it's difficult to quantify the exact impact. However, given the contract's duration of 633 days and the nature of heavy machinery components, the EPA could potentially add several percentage points to the total award value if inflation trends are unfavorable.
How does the unit cost of this procurement compare to industry benchmarks for similar construction machinery?
A precise per-unit cost benchmark is not available without knowing the specific types and quantities of construction machinery procured. However, the total award of $148.6 million spread over 633 days suggests a significant investment in heavy-duty equipment. Comparing the average cost per machine against publicly available data for similar commercial or government sales of Caterpillar equipment, adjusted for bulk purchase and specific configurations, would be necessary for a robust benchmark.
What is the potential risk to mission readiness if Caterpillar Inc. experiences production or supply chain disruptions?
A significant risk to mission readiness exists if Caterpillar Inc. faces production or supply chain disruptions, as they are the sole prime contractor for this essential equipment. The Defense Logistics Agency would need contingency plans, potentially involving alternative suppliers for critical components or expedited sourcing from other manufacturers if feasible, to mitigate delays and ensure timely delivery for critical defense operations.
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: $14,859,589
Exercised Options: $14,859,589
Current Obligation: $14,859,589
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: 2024-08-20
Current End Date: 2026-05-15
Potential End Date: 2026-05-15 00:00:00
Last Modified: 2025-09-16
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