DoD awards $27M for generators to Cummins Power Generation, a sole-source contract

Contract Overview

Contract Amount: $26,967,306 ($27.0M)

Contractor: Cummins Power Generation Inc.

Awarding Agency: Department of Defense

Start Date: 2022-04-26

End Date: 2023-06-30

Contract Duration: 430 days

Daily Burn Rate: $62.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AMMPS DELIVERY ORDER 0014 (W909MY-22-F-0030)

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to CUMMINS POWER GENERATION INC. for work described as: AMMPS DELIVERY ORDER 0014 (W909MY-22-F-0030) Key points: 1. Significant award value of $26.97 million. 2. Sole-source award raises questions about competition and potential price inflation. 3. Contract supports the Department of the Army, indicating a critical need. 4. The sector is Motor and Generator Manufacturing, essential for military operations.

Value Assessment

Rating: questionable

The contract value is substantial. Without competitive bidding, it's difficult to assess if the price is optimal compared to market rates for similar generator systems.

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 may lead to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition could result in the government paying a premium, impacting taxpayer funds negatively.

Public Impact

Ensures operational readiness for Army units by providing essential power generation equipment. Supports a major defense contractor, potentially impacting jobs and the supply chain. Highlights the reliance on specific manufacturers for critical military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Essential equipment for military operations
Supports established manufacturer

Sector Analysis

This award falls within the Motor and Generator Manufacturing sector, which is crucial for defense logistics and operational capabilities. Spending benchmarks for similar sole-source defense contracts can vary widely.

Small Business Impact

The contract was awarded to Cummins Power Generation Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and necessity. The Department of the Army is responsible for ensuring this delivery order meets all requirements and represents good value.

Related Government Programs

Motor and Generator Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to CUMMINS POWER GENERATION INC.. AMMPS DELIVERY ORDER 0014 (W909MY-22-F-0030)

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 $27.0 million.

What is the period of performance?

Start: 2022-04-26. End: 2023-06-30.

What is the justification for this contract being sole-source?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of alternative sources. Without specific documentation, it's presumed the Department of the Army determined that only Cummins Power Generation Inc. could meet the requirement, potentially due to specialized technology or existing integration with Army systems.

How can the government ensure fair pricing on this sole-source contract?

The government can ensure fair pricing through robust cost analysis, benchmarking against similar historical contracts (if available), and potentially negotiating profit margins. Independent cost estimates and audits can also provide assurance that the price paid is reasonable, even without direct competition.

What is the long-term impact of sole-source awards on defense procurement?

Sole-source awards can reduce competition over time, potentially leading to higher prices and less innovation. While sometimes necessary for critical or specialized needs, a pattern of sole-source awards may indicate systemic issues in market research or acquisition strategy, impacting overall defense budget efficiency.

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

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: $26,967,306

Exercised Options: $26,967,306

Current Obligation: $26,967,306

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W909MY18D0033

IDV Type: IDC

Timeline