DoD Awards $56.5M Delivery Order to Cummins for Generators, Lacking Competition

Contract Overview

Contract Amount: $56,516,641 ($56.5M)

Contractor: Cummins Power Generation Inc.

Awarding Agency: Department of Defense

Start Date: 2022-07-28

End Date: 2023-12-31

Contract Duration: 521 days

Daily Burn Rate: $108.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AMMPS DELIVERY ORDER 0015

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $56.5 million to CUMMINS POWER GENERATION INC. for work described as: AMMPS DELIVERY ORDER 0015 Key points: 1. Significant award value of $56.5 million for motor and generator manufacturing. 2. Sole-source award raises concerns about price discovery and potential overpayment. 3. Limited competition could impact innovation and access to alternative solutions. 4. Sector context: Defense spending on essential equipment like generators is critical but requires robust oversight.

Value Assessment

Rating: questionable

The award is a delivery order under an unspecified contract, making direct pricing comparisons difficult. The lack of competition suggests potential for higher costs than if multiple vendors were considered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This delivery order was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to less favorable pricing and reduced market pressure on the contractor.

Taxpayer Impact: The absence of competition raises concerns about whether taxpayers received the best possible value for this significant expenditure.

Public Impact

Military readiness relies on functional equipment like generators, impacting operational capabilities. Taxpayer funds are allocated to defense procurement, necessitating efficient and competitive sourcing. The defense industrial base for critical components like generators is vital for national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Limited transparency in award justification

Positive Signals

Award supports critical defense infrastructure
Firms up supply chain for essential equipment

Sector Analysis

The Department of Defense frequently procures specialized equipment like generators to maintain operational readiness. Benchmarks for similar generator contracts vary widely based on size, features, and specific military requirements.

Small Business Impact

This award was made to a large business (Cummins Power Generation Inc.) and does not appear to include specific provisions or set-asides for small businesses.

Oversight & Accountability

The sole-source nature of this delivery order warrants scrutiny to ensure the justification for not competing the award is sound and that pricing is fair and reasonable.

Related Government Programs

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

Risk Flags

Sole-source award lacks competitive pricing
Potential for inflated costs
Limited transparency on award justification
No apparent small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.5 million to CUMMINS POWER GENERATION INC.. AMMPS DELIVERY ORDER 0015

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 $56.5 million.

What is the period of performance?

Start: 2022-07-28. End: 2023-12-31.

What was the specific justification for awarding this delivery order on a sole-source basis rather than through a competitive process?

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services, or in cases of urgent need. Without further documentation, it's impossible to assess the validity of this justification and its impact on price discovery.

How does the $56.5 million award compare to benchmarks for similar generator systems procured competitively by the DoD?

Direct comparison is challenging without detailed specifications of the generators. However, the lack of competition inherently raises the risk that this award may be higher than if multiple bids were solicited. A benchmark analysis would require comparing unit costs, features, and warranty terms against recently awarded competitive contracts for similar equipment.

What mechanisms are in place to ensure the effectiveness and reliability of these generators, given the sole-source award?

While the award method impacts price discovery, the effectiveness and reliability of the delivered generators should be governed by the contract's technical specifications, quality assurance clauses, and acceptance testing procedures. The Department of the Army is responsible for ensuring these generators meet all performance requirements regardless of the procurement method.

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: $56,516,641

Exercised Options: $56,516,641

Current Obligation: $56,516,641

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W909MY18D0033

IDV Type: IDC

Timeline