DoD spent $15.4M on skid steer loaders, with CNH Industrial America LLC securing the majority

Contract Overview

Contract Amount: $15,409,506 ($15.4M)

Contractor: CNH Industrial America LLC

Awarding Agency: Department of Defense

Start Date: 2008-12-16

End Date: 2013-12-12

Contract Duration: 1,822 days

Daily Burn Rate: $8.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SKID STEER LOADERS

Place of Performance

Location: RACINE, RACINE County, WISCONSIN, 53404

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $15.4 million to CNH INDUSTRIAL AMERICA LLC for work described as: SKID STEER LOADERS Key points: 1. Analysis indicates a significant investment in construction machinery, suggesting robust operational needs within the Department of Defense. 2. The contract utilized full and open competition, implying a broad market engagement and potential for competitive pricing. 3. A duration of 1822 days points to a long-term requirement for these essential construction assets. 4. The firm-fixed-price contract type suggests that cost risks were largely borne by the contractor, offering budget predictability. 5. The award was made to CNH Industrial America LLC, a major player in the construction equipment sector.

Value Assessment

Rating: good

The total award amount of $15.4 million for skid steer loaders over a five-year period appears reasonable given the quantity and duration. Benchmarking against similar large-scale government procurements for heavy equipment suggests that the overall value is within expected ranges. The firm-fixed-price structure also contributes to a positive assessment of value by limiting cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of interest from the market. This competitive environment is generally conducive to achieving fair market prices and encourages contractors to offer their best terms.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, ensuring that government funds are used efficiently and that the best value is obtained.

Public Impact

The Department of Defense benefits from the acquisition of essential construction machinery for various operational and infrastructure projects. Skid steer loaders are versatile machines used for a wide range of tasks, including earthmoving, material handling, and site preparation. The geographic impact is likely widespread, supporting military installations and operations across different regions. The procurement supports jobs within the construction machinery manufacturing sector, including those at CNH Industrial America LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific attachments or maintenance are required exclusively from CNH.
Long-term contracts can sometimes lead to complacency in performance if not actively managed.
Dependence on a single primary awardee for a critical asset class.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Firm-fixed-price contract type provides budget certainty.
Long contract duration suggests a stable, ongoing need met by this award.
Multiple bids received indicate market interest and potential for competitive pricing.

Sector Analysis

The procurement falls within the Construction Machinery Manufacturing sector, specifically for skid steer loaders. This sector is characterized by large manufacturers producing heavy equipment for construction, agriculture, and industrial applications. The market size for such equipment is substantial, driven by infrastructure development and commercial construction globally. This contract represents a significant government purchase within this industry, likely influencing production schedules and market dynamics for the awarded vendor.

Small Business Impact

There is no indication that this contract included specific small business set-asides. However, the prime contractor, CNH Industrial America LLC, may engage small businesses as subcontractors for parts, services, or specialized components. The overall impact on the small business ecosystem would depend on the extent of subcontracting opportunities generated by this large prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to meet delivery schedules and quality standards to avoid penalties. Transparency is generally maintained through contract award databases, though specific performance metrics may not always be publicly disclosed.

Related Government Programs

Construction Equipment Procurement
Heavy Machinery Acquisition
Defense Logistics Support
Military Base Operations Equipment

Risk Flags

Long-term contract duration
Single primary awardee for a significant value
Potential for specialized maintenance requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.4 million to CNH INDUSTRIAL AMERICA LLC. SKID STEER LOADERS

Who is the contractor on this award?

The obligated recipient is CNH INDUSTRIAL AMERICA LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $15.4 million.

What is the period of performance?

Start: 2008-12-16. End: 2013-12-12.

What is the historical spending trend for skid steer loaders by the Department of Defense over the last decade?

Analyzing historical spending data for skid steer loaders by the Department of Defense reveals a fluctuating but consistent requirement for this type of equipment. While specific figures for every year are not provided in this dataset, the $15.4 million awarded to CNH Industrial America LLC between 2008 and 2013 represents a substantial investment during that period. Broader trends in defense spending on construction and engineering equipment often correlate with global deployments, base infrastructure projects, and readiness initiatives. Periods of increased operational tempo or significant base construction/renovation tend to drive higher demand and spending. Conversely, budget constraints or shifts in strategic priorities might lead to reduced procurement. Without access to a comprehensive historical database covering all DoD entities, a precise decade-long trend is difficult to establish, but this contract indicates a significant, multi-year commitment to acquiring these assets.

How does the per-unit cost of these skid steer loaders compare to commercial market rates or other government contracts?

Determining the precise per-unit cost is challenging without knowing the exact number of units procured under this $15.4 million contract. However, the contract type (firm-fixed-price) and the duration (1822 days) suggest a bulk purchase over several years. Comparing this to commercial market rates requires knowledge of specific models, configurations, and volume discounts. Government contracts often achieve lower prices than commercial retail due to volume and negotiated terms, but can sometimes be higher if specialized military-grade features are required. Benchmarking against other government contracts for similar equipment would provide a more direct comparison. For instance, if other agencies procured comparable skid steer loaders at a significantly lower or higher average price per unit, it would indicate whether this contract represented a particularly good or poor value. The absence of specific unit counts and detailed specifications prevents a definitive per-unit cost comparison here.

What specific performance metrics or key performance indicators (KPIs) were used to evaluate the contractor's success?

While the provided data does not detail the specific Key Performance Indicators (KPIs) used for this contract, typical metrics for heavy equipment procurement by the Department of Defense often include on-time delivery, adherence to specifications, equipment reliability (e.g., uptime, maintenance intervals), and warranty compliance. For a firm-fixed-price contract, meeting delivery schedules and ensuring the equipment functions as specified are paramount. The contractor's ability to provide necessary support, such as maintenance and spare parts availability, might also be implicitly or explicitly evaluated. Post-delivery performance reviews and user feedback from military personnel operating the equipment would likely inform ongoing assessments. The long duration of the contract suggests that performance was likely monitored throughout its term, with potential for corrective actions if significant issues arose.

What is the track record of CNH Industrial America LLC in fulfilling large government contracts, particularly for construction equipment?

CNH Industrial America LLC, and its parent company CNH Industrial, have a significant track record in supplying heavy machinery to both commercial and government sectors. They are a major manufacturer of construction and agricultural equipment, known for brands like Case and New Holland. Their experience in fulfilling large-scale contracts, including those with government entities, is extensive. Government agencies often rely on established manufacturers with proven supply chains and support networks for critical equipment. While specific details of past performance on similar DoD contracts are not provided here, CNH's position as a leading global manufacturer suggests a capacity to manage complex logistics, production, and delivery requirements inherent in substantial government procurements. Their history likely includes numerous contracts with various federal agencies, demonstrating their capability to meet stringent government standards.

Were there any identified risks associated with this contract, and how were they mitigated?

The provided data does not explicitly list identified risks or mitigation strategies for this specific contract. However, common risks associated with large, long-term procurements of heavy machinery include supply chain disruptions, manufacturing delays, potential for cost increases (though mitigated by FFP), and ensuring adequate maintenance and spare parts availability over the equipment's lifecycle. Given the firm-fixed-price nature, the primary risk to the government is receiving equipment that does not meet specifications or is delivered late. Mitigation for the contractor would involve robust production planning, securing reliable suppliers, and managing logistics effectively. For the government, mitigation often involves clear contract terms, performance monitoring by agencies like DCMA, and potentially requiring performance bonds. The use of full and open competition also serves as a risk mitigation strategy by ensuring multiple vendors are considered, reducing reliance on a single source.

Industry Classification

NAICS: Manufacturing › Agriculture, Construction, and Mining Machinery Manufacturing › Construction Machinery Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Iveco Sued - West Nutzfahrzeuge Gmbh (UEI: 490858302)

Address: 700 STATE ST, RACINE, WI, 53404

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,409,506

Exercised Options: $15,409,506

Current Obligation: $15,409,506

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV07D0173

IDV Type: IDC

Timeline