DOD Awards $18.85M for Construction Machinery, Including 32 Dozers and ICL Services to Caterpillar Inc

Contract Overview

Contract Amount: $18,850,349 ($18.9M)

Contractor: Caterpillar Inc

Awarding Agency: Department of Defense

Start Date: 2024-03-27

End Date: 2026-09-30

Contract Duration: 917 days

Daily Burn Rate: $20.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DELIVERY ORDER W56HZV-24-F-0236 IS FOR THE PROCUREMENT OF 24 TYPE I EH DOZERS, 8 TYPE II EH DOZERS, 11 STTE KITS, AND 32 LOTS OF ICLS SERVICES.

Place of Performance

Location: IRVING, DALLAS County, TEXAS, 75039

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to CATERPILLAR INC for work described as: DELIVERY ORDER W56HZV-24-F-0236 IS FOR THE PROCUREMENT OF 24 TYPE I EH DOZERS, 8 TYPE II EH DOZERS, 11 STTE KITS, AND 32 LOTS OF ICLS SERVICES. Key points: 1. Significant award for heavy construction equipment and related services. 2. Sole awardee, Caterpillar Inc., dominates this specialized manufacturing sector. 3. Risk of limited competition and potential for higher costs due to sole-source nature. 4. Spending aligns with construction machinery manufacturing (NAICS 333120).

Value Assessment

Rating: fair

The total award of $18.85M for dozers and ICL services appears to be a significant investment. Benchmarking against similar contracts for specialized heavy machinery is difficult without more detailed cost breakdowns, but the price seems substantial for the quantity and type of equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government as there is no competitive pressure to drive down prices. The government may have justified this based on specific requirements or existing sole-source relationships.

Taxpayer Impact: The lack of competition raises concerns about taxpayer value, as the government may not have secured the best possible price for these essential construction assets.

Public Impact

Procurement of critical heavy equipment for potential military or infrastructure projects. Supports a major defense contractor, Caterpillar Inc., in the construction machinery sector. Long-term service component (ICLs) suggests ongoing support and maintenance needs. Award is for a significant dollar amount, impacting the defense budget. Delivery timeline extends over two years, indicating a substantial project duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
High dollar value for specialized equipment.
Long contract duration (over 2 years).

Positive Signals

Procurement of essential construction machinery.
Includes long-term support services (ICLs).

Sector Analysis

This award falls within the Construction Machinery Manufacturing sector, characterized by high-value, specialized equipment. Spending benchmarks in this sector are often driven by large government contracts for defense, infrastructure, and disaster relief efforts, with significant lead times for production.

Small Business Impact

There is no indication that small businesses were involved in this specific procurement. The award to Caterpillar Inc., a large corporation, suggests that the primary contractor is not a small business, and subcontracting opportunities for small businesses are not detailed here.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and that the government's needs are being met effectively. Accountability would involve tracking delivery, performance, and adherence to contract terms throughout the duration.

Related Government Programs

Construction Machinery Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
High dollar value
Long contract duration
Potential for price escalation
Dependence on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to CATERPILLAR INC. DELIVERY ORDER W56HZV-24-F-0236 IS FOR THE PROCUREMENT OF 24 TYPE I EH DOZERS, 8 TYPE II EH DOZERS, 11 STTE KITS, AND 32 LOTS OF ICLS SERVICES.

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 $18.9 million.

What is the period of performance?

Start: 2024-03-27. End: 2026-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the lack of viable alternatives. To ensure a fair and reasonable price, the contracting officer would likely conduct extensive market research, analyze historical pricing, and potentially negotiate directly with the vendor, possibly using independent government cost estimates as a baseline.

What are the specific risks associated with relying on a single supplier for such critical construction equipment, particularly concerning long-term availability and maintenance?

The primary risks include potential price escalation, limited access to spare parts or technical support if the supplier's priorities shift, and vulnerability to supply chain disruptions affecting the sole provider. This dependence can reduce the government's leverage in future negotiations and potentially impact operational readiness if equipment requires urgent repairs or replacements.

How will the effectiveness of the Type I and Type II EH dozers and ICL services be measured to ensure they meet the Department of the Army's operational requirements?

Effectiveness will likely be measured through performance metrics outlined in the contract, such as delivery timelines, equipment uptime, maintenance response times for ICL services, and adherence to technical specifications. Post-delivery inspections, user feedback from operational units, and potentially field performance evaluations will provide data on how well the equipment and services fulfill their intended purpose.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $18,850,349

Exercised Options: $18,850,349

Current Obligation: $18,850,349

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV21D0034

IDV Type: IDC

Timeline