DoD awards $32.6M for Wheel Loaders to Caterpillar Inc., with delivery orders extending to October 2026
Contract Overview
Contract Amount: $32,647,702 ($32.6M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2024-11-26
End Date: 2026-10-27
Contract Duration: 700 days
Daily Burn Rate: $46.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Construction
Official Description: 8511039903!WHEEL LOADER
Place of Performance
Location: IRVING, DALLAS County, TEXAS, 75039
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $32.6 million to CATERPILLAR INC for work described as: 8511039903!WHEEL LOADER Key points: 1. Significant contract value for construction machinery. 2. Solely awarded to Caterpillar Inc., raising questions about competition. 3. Fixed Price with Economic Price Adjustment contract type introduces potential cost escalation risks. 4. Spending falls within the Construction Machinery Manufacturing sector.
Value Assessment
Rating: fair
The awarded amount of $32.6M for wheel loaders appears substantial. Benchmarking against similar contracts for heavy construction equipment is necessary to determine if the pricing is competitive, especially given the fixed-price with economic adjustment structure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although the contract type is 'FULL AND OPEN COMPETITION', the award was made to a single entity, Caterpillar Inc. This suggests that while the opportunity was open, only one bid was successful or deemed viable, potentially limiting price discovery.
Taxpayer Impact: The fixed-price with economic price adjustment could lead to higher costs for taxpayers if material or labor costs increase significantly over the contract period.
Public Impact
Military readiness may be enhanced with new wheel loaders. Taxpayers bear the risk of potential price increases due to economic adjustments. Dependence on a single manufacturer could impact future procurement flexibility. The contract supports the Defense Logistics Agency's operational needs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to economic price adjustment.
- Limited competition despite 'full and open' designation.
- Single source awardee may limit future negotiation leverage.
Positive Signals
- Addresses critical equipment needs for the Department of Defense.
- Contract duration provides long-term supply stability.
Sector Analysis
This contract falls under Construction Machinery Manufacturing, a sector critical for infrastructure and military support operations. Spending benchmarks for similar heavy equipment procurements by defense agencies would be useful for comparison.
Small Business Impact
The data indicates no specific set-aside for small businesses. The award to Caterpillar Inc., a large corporation, suggests that small businesses were either not involved in this specific procurement or did not win the bid.
Oversight & Accountability
Oversight will be crucial to monitor the economic price adjustments and ensure they are justified. The Defense Logistics Agency should ensure adherence to contract terms and performance standards throughout the delivery period.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Limited effective competition despite 'full and open' designation.
- Dependence on a single supplier could impact future flexibility.
- Lack of small business participation noted.
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 $32.6 million to CATERPILLAR INC. 8511039903!WHEEL LOADER
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 $32.6 million.
What is the period of performance?
Start: 2024-11-26. End: 2026-10-27.
What is the justification for the fixed-price with economic price adjustment structure, and what are the projected cost increases?
The justification for an economic price adjustment typically lies in mitigating risks associated with volatile input costs, such as raw materials or labor, over a long contract duration. For this contract, the agency likely sought to ensure supply continuity by allowing for cost fluctuations. However, it shifts the risk of significant cost increases to the taxpayer, necessitating robust oversight to validate any price adjustments claimed by the contractor.
How does the awarded price compare to market benchmarks for similar wheel loaders, considering the contract's duration and adjustment clauses?
Without specific market benchmark data for comparable wheel loaders procured under similar long-term contracts with economic price adjustments, a definitive comparison is difficult. The $32.6M award, spread over the contract period, needs to be evaluated against industry pricing for heavy construction equipment. The 'full and open' competition designation, despite a single awardee, implies a competitive process, but the actual price discovery effectiveness is questionable without further analysis of bid submissions.
What is the potential impact on future procurement if Caterpillar Inc. remains the sole viable supplier for these specific wheel loaders?
If Caterpillar Inc. is consistently the sole viable supplier for these specific wheel loaders, it could lead to reduced competition in future procurements, potentially driving up prices and limiting negotiation leverage for the government. This reliance could also impact the government's ability to adopt newer technologies or alternative solutions if they are not offered by the incumbent supplier.
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: $32,647,702
Exercised Options: $32,647,702
Current Obligation: $32,647,702
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: 2024-11-26
Current End Date: 2026-10-27
Potential End Date: 2026-10-27 00:00:00
Last Modified: 2025-11-06
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