DoD Awards $14M Caterpillar Contract for Construction Machinery, Lacking Competition

Contract Overview

Contract Amount: $13,955,868 ($14.0M)

Contractor: Caterpillar Inc

Awarding Agency: Department of Defense

Start Date: 2024-12-23

End Date: 2026-12-18

Contract Duration: 725 days

Daily Burn Rate: $19.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CAT EARTHMOVING SLEP

Place of Performance

Location: IRVING, DALLAS County, TEXAS, 75039

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to CATERPILLAR INC for work described as: CAT EARTHMOVING SLEP Key points: 1. Significant award for construction machinery, primarily impacting the Army. 2. Sole-source nature raises questions about price competitiveness. 3. Long-term contract (725 days) suggests critical operational need. 4. Focus on Texas indicates regional deployment or support.

Value Assessment

Rating: questionable

The contract value of $13.96M for construction machinery is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates or potential discounts from other manufacturers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Caterpillar Inc. This limits price discovery and potentially leads to higher costs for taxpayers as there's no market pressure to offer the best price.

Taxpayer Impact: The lack of competition on this $13.96M contract means taxpayers may be paying a premium for the construction machinery.

Public Impact

Military readiness may depend on specialized Caterpillar equipment. Taxpayers could face higher costs due to the absence of competitive bidding. Potential for long-term reliance on a single supplier for critical machinery. Economic impact on the Texas region where the equipment is destined.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpricing

Positive Signals

Addresses critical equipment needs
Long-term contract provides stability

Sector Analysis

The construction machinery manufacturing sector is vital for infrastructure and military operations. Awards in this sector, especially for specialized equipment like Caterpillar's, can be substantial. Benchmarks are hard to establish without competitive data.

Small Business Impact

This contract was awarded directly to Caterpillar Inc., a large corporation. There is no indication that small businesses were involved as subcontractors or prime contractors in this specific award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained fair value. Further review of the justification for not competing the contract is recommended.

Related Government Programs

Construction Machinery 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 in price negotiation
Risk of vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to CATERPILLAR INC. CAT EARTHMOVING SLEP

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 $14.0 million.

What is the period of performance?

Start: 2024-12-23. End: 2026-12-18.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's presumed the Army determined Caterpillar was the only viable option, potentially due to specific model requirements or existing fleet compatibility.

How does the contract price compare to industry benchmarks for similar construction machinery?

Direct comparison is challenging without knowing the exact specifications and configurations of the machinery. However, the absence of competition inherently prevents a true market-based price discovery. A benchmark analysis against publicly available pricing for comparable equipment, adjusted for features and volume, would be necessary to assess potential overpricing.

What is the long-term strategic implication of relying on a sole-source provider for critical military equipment?

Long-term sole-source reliance can create vendor lock-in, limit technological advancement through competition, and potentially increase costs over time. It also poses a risk if the sole provider faces production issues or significant price increases. Diversification and strategic sourcing strategies are often employed to mitigate these risks.

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: $13,955,868

Exercised Options: $13,955,868

Current Obligation: $13,955,868

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912CH25D0001

IDV Type: IDC

Timeline