DoD spent $2.8M on generators, with 6 bidders and a 2-year delivery timeline

Contract Overview

Contract Amount: $27,937,575 ($27.9M)

Contractor: Cummins Power Generation Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-23

End Date: 2013-07-31

Contract Duration: 677 days

Daily Burn Rate: $41.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE FUNDING FOR THE PURCHASE OF GENERATORS.

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55432

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to CUMMINS POWER GENERATION INC. for work described as: PROVIDE FUNDING FOR THE PURCHASE OF GENERATORS. Key points: 1. The contract value of $2.8M for generators appears reasonable given the scope and duration. 2. Full and open competition suggests a healthy market for generator supply to the DoD. 3. The firm-fixed-price contract type transfers risk to the contractor, potentially stabilizing costs. 4. The contract duration of 677 days indicates a significant, long-term need for these assets. 5. The award was made by the Defense Contract Management Agency, suggesting a focus on operational readiness. 6. The North American Industry Classification System (NAICS) code 335312 points to motor and generator manufacturing.

Value Assessment

Rating: good

The total contract value of $2.8 million for generators is a moderate expenditure. Without specific details on the generator specifications (e.g., power output, fuel type, mobility), a precise per-unit cost benchmark is difficult. However, the presence of multiple bidders in a full and open competition suggests that the pricing achieved was likely competitive. The firm-fixed-price nature of the contract also implies that the contractor bore the risk of cost overruns, which is generally favorable for the government.

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 solicitation resulted in 6 bids, which suggests a reasonable level of competition for this requirement. A competitive environment like this typically leads to better price discovery and potentially lower costs for the government as contractors vie for the award.

Taxpayer Impact: The use of full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to obtain the best possible price for the generators.

Public Impact

Military units requiring reliable power generation capabilities will benefit from this contract. The services delivered include the purchase of essential generator equipment. The contract's geographic impact is likely tied to military installations requiring these generators, with the contractor based in Minnesota. The contract supports the manufacturing sector, specifically motor and generator production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence if generator technology advances rapidly during the contract period.
Dependence on a single contractor for delivery could lead to delays if unforeseen issues arise.
Ensuring long-term maintenance and spare parts availability for the acquired generators.

Positive Signals

Firm-fixed-price contract structure mitigates cost escalation risks for the government.
Full and open competition likely resulted in a competitive price.
Award to a manufacturer in the motor and generator sector ensures specialized expertise.

Sector Analysis

The contract falls within the industrial equipment manufacturing sector, specifically NAICS code 335312 (Motor and Generator Manufacturing). This sector is critical for providing essential power solutions across various industries, including defense. The market for generators is diverse, ranging from small portable units to large industrial installations. The DoD's spending in this area is often driven by the need for reliable power at domestic and deployed locations, making it a recurring and significant area of expenditure.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award was made to Cummins Power Generation Inc., a large business entity. Therefore, this specific contract does not appear to directly benefit the small business ecosystem through set-asides or mandated subcontracting.

Oversight & Accountability

The contract was awarded by the Defense Contract Management Agency (DCMA), which provides contract administration services to the Department of Defense. DCMA's oversight typically includes monitoring contractor performance, ensuring compliance with contract terms, and verifying delivery schedules. The firm-fixed-price nature of the contract shifts some financial risk to the contractor, but DCMA would still oversee adherence to specifications and delivery timelines. Further transparency would be available through contract databases and potentially Inspector General reports if any issues arose.

Related Government Programs

Department of Defense Procurement
Generator Procurement
Industrial Equipment Manufacturing
Defense Contract Management Agency Contracts

Risk Flags

Potential for cost overruns if initial estimates were inaccurate (mitigated by FFP).
Risk of delivery delays impacting operational readiness.
Ensuring long-term maintainability and availability of spare parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to CUMMINS POWER GENERATION INC.. PROVIDE FUNDING FOR THE PURCHASE OF GENERATORS.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $27.9 million.

What is the period of performance?

Start: 2011-09-23. End: 2013-07-31.

What specific types and capacities of generators were procured under this contract?

The provided data indicates the procurement of generators but does not specify the exact types, models, or power capacities. The NAICS code 335312 suggests the purchase of motors and generators, which can range widely in size and application. To understand the precise nature of the equipment, one would need to consult the detailed contract statement of work or specifications. This information is crucial for assessing the suitability of the procured items for their intended military purpose and for comparing their value against market offerings.

How does the per-unit cost of these generators compare to similar military or commercial procurements?

A direct per-unit cost comparison is challenging without knowing the specific generator specifications (e.g., kW output, fuel type, features). However, the contract was awarded under full and open competition with 6 bidders, suggesting a competitive pricing environment. The firm-fixed-price contract type also implies that the contractor assumed cost risks. To perform a robust benchmark, one would need to identify comparable contracts for generators with similar technical requirements and analyze their pricing, considering factors like quantity, delivery location, and warranty.

What is the track record of Cummins Power Generation Inc. in fulfilling government contracts, particularly for generators?

Cummins Power Generation Inc. is a known entity in the power generation market. While this specific contract data doesn't detail their past performance, government contracting databases often track contractor performance ratings and past awards. A review of these databases would reveal their history with the DoD and other federal agencies, including on-time delivery, quality of goods, and adherence to contract terms. Their established presence suggests a capacity to handle such procurements, but a detailed performance review would be necessary for a complete assessment.

What are the potential risks associated with the firm-fixed-price contract type for this generator procurement?

The firm-fixed-price (FFP) contract type generally benefits the government by capping costs. However, for complex or long-duration procurements like this generator purchase, there's a risk that the contractor may have underestimated costs, leading to potential quality compromises or delivery delays if they struggle to maintain profitability. Conversely, if the contractor significantly overestimated costs, the government might have paid a premium. The risk is mitigated by the competitive bidding process and the contractor's incentive to deliver a quality product to secure future business.

How does the $2.8 million spending on generators align with historical DoD spending patterns for similar equipment?

The $2.8 million expenditure for generators represents a specific instance of DoD spending. To assess alignment with historical patterns, one would need to analyze aggregate DoD spending data for generators over several fiscal years. This would involve identifying similar contract types, quantities, and specifications. Factors such as evolving military requirements, technological advancements, and budget allocations influence these patterns. Without broader historical data, it's difficult to definitively state whether this $2.8 million is typical, high, or low relative to past spending.

What is the expected operational lifespan and maintenance plan for the generators procured under this contract?

The provided contract abstract does not specify the expected operational lifespan or the details of the maintenance plan for the generators. These critical aspects are typically defined in the contract's statement of work and associated technical specifications. A comprehensive understanding would require reviewing those documents. Generally, military equipment is expected to have a robust lifespan, and maintenance plans, including warranty provisions and spare parts availability, are crucial considerations negotiated during the procurement process to ensure long-term readiness.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Cummins Inc. (UEI: 006415160)

Address: 1400 73RD AVENUE NE, MINNEAPOLIS, MN, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,937,575

Exercised Options: $27,937,575

Current Obligation: $27,937,575

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T04DA003

IDV Type: IDC

Timeline