DoD Awards $76.3M for Generators to Cummins, Lacking Competition

Contract Overview

Contract Amount: $76,335,513 ($76.3M)

Contractor: Cummins Power Generation Inc.

Awarding Agency: Department of Defense

Start Date: 2023-08-22

End Date: 2025-12-12

Contract Duration: 843 days

Daily Burn Rate: $90.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AMMPS DELIVERY ORDER 21

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $76.3 million to CUMMINS POWER GENERATION INC. for work described as: AMMPS DELIVERY ORDER 21 Key points: 1. Significant award to a single vendor for essential equipment. 2. Lack of competition raises concerns about price discovery and value. 3. Potential for higher costs due to sole-source nature. 4. Sector is Motor and Generator Manufacturing, critical for military operations.

Value Assessment

Rating: questionable

The award amount of $76.3 million for a delivery order is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar generator contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to inflated costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these generators, as the government did not explore potentially lower-cost options from other qualified vendors.

Public Impact

Ensures operational readiness by providing essential power generation equipment. Potential for taxpayer funds to be used inefficiently due to non-competitive award. Highlights a reliance on a specific vendor for critical military assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Essential equipment for military operations
Award to established vendor

Sector Analysis

The Department of Defense is awarding a significant sum to Cummins Power Generation Inc. within the Motor and Generator Manufacturing sector. This sector is crucial for maintaining operational capabilities, especially in remote or deployed environments.

Small Business Impact

This award does not appear to include provisions for small business participation, as the data indicates the vendor is not a small business and the contract was not competed, which could have offered opportunities for subcontracting.

Oversight & Accountability

The non-competed nature of this award warrants scrutiny from oversight bodies to ensure the government obtained the best possible value and that the sole-source justification was appropriate.

Related Government Programs

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

Risk Flags

Lack of competition
Potential for overpricing
Sole-source award
Limited transparency in price justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.3 million to CUMMINS POWER GENERATION INC.. AMMPS DELIVERY ORDER 21

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 $76.3 million.

What is the period of performance?

Start: 2023-08-22. End: 2025-12-12.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, urgent needs, or compatibility requirements with existing systems. Without further documentation, the specific rationale remains unclear, but it is a critical factor in assessing the value and necessity of this procurement.

How does the awarded price compare to industry benchmarks for similar generator systems, considering the lack of competition?

Assessing the price against industry benchmarks is challenging without competitive data. However, sole-source contracts often carry a premium. A thorough review would involve comparing the specifications and pricing to publicly available data on similar government or commercial generator purchases, adjusted for quantity and specific features, to identify potential cost deviations.

What is the long-term strategic impact of relying on a single vendor for such critical power generation equipment?

Long-term reliance on a single vendor can create strategic vulnerabilities, including potential supply chain disruptions, price escalation over time, and limited access to technological advancements from competitors. It also reduces the government's leverage in future negotiations. Diversifying suppliers or ensuring robust long-term agreements with clear performance metrics and price controls would mitigate these risks.

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: $76,335,513

Exercised Options: $76,335,513

Current Obligation: $76,335,513

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W909MY18D0033

IDV Type: IDC

Timeline