DoD Awards $23.1M Firm Fixed Price Order for Caterpillar Spare Parts to Israel
Contract Overview
Contract Amount: $20,564,257 ($20.6M)
Contractor: Caterpillar Inc
Awarding Agency: Department of Defense
Start Date: 2025-10-09
End Date: 2025-11-20
Contract Duration: 42 days
Daily Burn Rate: $489.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: THE PURPOSE OF THIS FIRM FIXED PRICE DELIVERY ORDER IS TO PURCHASE CATERPILLAR SPARE PARTS FOR THE COUNTRY OF ISRAEL. THE TOTAL DELIVERY ORDER AMOUNT IS $23,126,792.92.
Place of Performance
Location: IRVING, DALLAS County, TEXAS, 75039
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $20.6 million to CATERPILLAR INC for work described as: THE PURPOSE OF THIS FIRM FIXED PRICE DELIVERY ORDER IS TO PURCHASE CATERPILLAR SPARE PARTS FOR THE COUNTRY OF ISRAEL. THE TOTAL DELIVERY ORDER AMOUNT IS $23,126,792.92. Key points: 1. Significant award for essential spare parts to a key ally. 2. Sole-source nature raises questions about price competitiveness. 3. Focus on construction machinery parts suggests infrastructure or operational support. 4. Limited competition could lead to higher costs for taxpayers.
Value Assessment
Rating: questionable
The contract is firm fixed price, which provides cost certainty. However, without competitive bidding, it's difficult to assess if the $23.1M price is optimal compared to market rates for Caterpillar parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This is a sole-source award, meaning only one vendor, Caterpillar Inc., was solicited. This limits price discovery and negotiation opportunities, potentially leading to a higher price than if multiple vendors had competed.
Taxpayer Impact: Taxpayer funds are used for this purchase. The lack of competition means there's a higher risk of overpayment, impacting the overall value for taxpayer money.
Public Impact
Supports critical infrastructure and operational readiness for Israel. Ensures continued functionality of essential construction machinery. Potential for higher costs due to sole-source procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of price competition
- Potential for overpayment
Positive Signals
- Supports allied nation's needs
- Firm fixed price contract type
Sector Analysis
This spending falls within the Construction Machinery Manufacturing sector. The award amount is substantial for spare parts, suggesting significant operational needs or a large fleet of machinery requiring maintenance.
Small Business Impact
The data indicates this contract was awarded directly to Caterpillar Inc., a large corporation. There is no indication of small business participation in this specific delivery order.
Oversight & Accountability
The Department of the Army, under the Department of Defense, is the awarding agency. Oversight would typically involve ensuring delivery timelines and part specifications are met, but competitive oversight is absent due to the sole-source nature.
Related Government Programs
- Construction Machinery Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for inflated pricing.
- Lack of transparency in justification for sole-sourcing.
- No clear indication of small business subcontracting opportunities.
Tags
construction-machinery-manufacturing, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.6 million to CATERPILLAR INC. THE PURPOSE OF THIS FIRM FIXED PRICE DELIVERY ORDER IS TO PURCHASE CATERPILLAR SPARE PARTS FOR THE COUNTRY OF ISRAEL. THE TOTAL DELIVERY ORDER AMOUNT IS $23,126,792.92.
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 $20.6 million.
What is the period of performance?
Start: 2025-10-09. End: 2025-11-20.
What is the justification for the sole-source award, and were alternative procurement methods considered?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies must typically demonstrate that only one responsible source can fulfill the requirement. Without this justification, it's difficult to assess if taxpayers received the best possible value or if alternative, more competitive methods could have been explored to potentially lower costs.
How does the unit cost of these Caterpillar spare parts compare to industry benchmarks or previous government purchases?
Benchmarking the unit cost against industry standards or historical government purchase data is essential for evaluating value. If the prices are significantly higher, it indicates potential overpayment due to the lack of competition. A detailed cost analysis comparing these prices to market rates would reveal the extent of any potential financial disadvantage to the government.
What is the expected operational impact and duration of use for these spare parts in Israel?
Understanding the intended use and expected lifespan of these parts provides context for the $23.1M expenditure. If the parts are for critical, long-term operational needs or high-wear equipment, the cost might be more justifiable. Conversely, if they are for short-term or less critical functions, the price point warrants closer scrutiny regarding efficiency and necessity.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Caterpillar Inc.
Address: 100 NE ADAMS ST AB6310, PEORIA, IL, 61629
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: $23,160,631
Exercised Options: $23,160,631
Current Obligation: $20,564,257
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91CRB20D0005
IDV Type: IDC
Timeline
Start Date: 2025-10-09
Current End Date: 2025-11-20
Potential End Date: 2025-11-20 00:00:00
Last Modified: 2025-12-16
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