DoD awards $61M for generators to Cummins Power Generation, facing limited competition
Contract Overview
Contract Amount: $61,070,686 ($61.1M)
Contractor: Cummins Power Generation Inc.
Awarding Agency: Department of Defense
Start Date: 2020-03-13
End Date: 2021-10-31
Contract Duration: 597 days
Daily Burn Rate: $102.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AMMPS DELIVERY ORDER #0008 (W909MY20F0039)
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432
Plain-Language Summary
Department of Defense obligated $61.1 million to CUMMINS POWER GENERATION INC. for work described as: AMMPS DELIVERY ORDER #0008 (W909MY20F0039) Key points: 1. Significant award value of $61 million for generator manufacturing. 2. Limited competition raises questions about price discovery and value for money. 3. Potential risk associated with sole-source or limited competition awards. 4. Sector focus on Motor and Generator Manufacturing (NAICS 335312).
Value Assessment
Rating: fair
The award value of $61 million is substantial. Without competitive bids, it's difficult to assess if this price is optimal compared to similar contracts for generators. Benchmarking against market rates for comparable units is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT COMPETED,' indicating a limited competition approach. This method may lead to higher prices than a full and open competition, as it restricts the pool of potential offerors and reduces market pressure.
Taxpayer Impact: The lack of robust competition could result in taxpayers paying more than necessary for these generators.
Public Impact
Military readiness may be impacted by the availability and cost of these essential power generation units. The defense industrial base for generator manufacturing is influenced by this significant award. Taxpayer funds are allocated towards critical defense infrastructure, highlighting the need for efficient procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Lack of price benchmark
- Potential for overpayment
Positive Signals
- Award to established manufacturer
- Supports military operations
Sector Analysis
The Motor and Generator Manufacturing sector (NAICS 335312) is vital for defense and infrastructure. Spending in this sector can fluctuate based on defense needs and technological advancements. This award represents a significant portion of spending within this specific sub-sector.
Small Business Impact
The data indicates this contract was not awarded to a small business (ss: false, sb: false). There is no indication of subcontracting opportunities for small businesses within this specific delivery order.
Oversight & Accountability
The Department of the Army awarded this delivery order. Oversight would focus on ensuring the terms of the limited competition were justified and that the price paid was reasonable given the circumstances.
Related Government Programs
- Motor and Generator Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition raises value concerns.
- Potential for inflated pricing.
- Lack of transparency in source selection.
- No small business participation noted.
Tags
motor-and-generator-manufacturing, department-of-defense, mn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.1 million to CUMMINS POWER GENERATION INC.. AMMPS DELIVERY ORDER #0008 (W909MY20F0039)
Who is the contractor on this award?
The obligated recipient is CUMMINS POWER GENERATION 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 $61.1 million.
What is the period of performance?
Start: 2020-03-13. End: 2021-10-31.
What was the justification for not competing this significant generator contract?
The justification for not competing this $61 million generator contract is critical for assessing value. Agencies typically limit competition when only one source can meet requirements, or in urgent situations. Understanding the specific reason is key to determining if the limited competition was appropriate and if a better price could have been achieved through broader solicitation.
How does the unit cost compare to industry benchmarks for similar generator sets?
Without competitive bids, a direct comparison to industry benchmarks is challenging. However, an analysis of the total award value ($61,070,686) spread over the duration (597 days) and potentially the number of units (if known) against market prices for comparable military-grade generators is essential. This would help identify potential overpricing due to the lack of competition.
What is the long-term impact of limited competition on the defense generator supply chain?
Consistently awarding contracts with limited competition can stifle innovation and reduce the number of capable suppliers in the defense generator market over time. This can lead to increased costs and reduced responsiveness in the future. Encouraging broader competition, where feasible, helps maintain a healthy and competitive industrial base.
Industry Classification
NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing
Product/Service Code: ELECTRIC WIRE, POWER DISTRIB 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: Cummins Inc. (UEI: 006415160)
Address: 1400 73RD AVE NE, MINNEAPOLIS, MN, 55432
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: $61,070,686
Exercised Options: $61,070,686
Current Obligation: $61,070,686
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W909MY18D0033
IDV Type: IDC
Timeline
Start Date: 2020-03-13
Current End Date: 2021-10-31
Potential End Date: 2021-10-31 12:10:00
Last Modified: 2021-12-07
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