Marine Corps spent $60.4M on John Deere tractors, a sole-source award with a long duration

Contract Overview

Contract Amount: $60,387,077 ($60.4M)

Contractor: John Deere Construction & Forestry Company

Awarding Agency: Department of Defense

Start Date: 2000-10-26

End Date: 2011-08-23

Contract Duration: 3,953 days

Daily Burn Rate: $15.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200101!000016!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785401C3077 !A!N!*!N! !20001026!20050228!073489726!073489726!005267471!N!JOHN DEERE CONSTRUCTION EQUIPM!1175 EAST 90TH STREET !DAVENPORT !IA!52808!19000!163!19!DAVENPORT !SCOTT !IOWA !+000010754529!N!N!000000000000!2420!TRACTORS, WHEELED !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !333924!*!*!3! ! ! !*!*!*!B!*!*!A! !D !Y!J!1!001!N!1G!Z!N!Z! ! !Y!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: DAVENPORT, SCOTT County, IOWA, 52808

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $60.4 million to JOHN DEERE CONSTRUCTION & FORESTRY COMPANY for work described as: 200101!000016!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785401C3077 !A!N!*!N! !20001026!20050228!073489726!073489726!005267471!N!JOHN DEERE CONSTRUCTION EQUIPM!1175 EAST 90TH STREET !DAVENPORT !IA!52808!19000!163!19!DAVENPORT !SCOTT… Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. The contract's extended duration suggests a long-term need for these specialized vehicles. 3. Awarded by Marine Corps Systems Command, indicating a focus on operational equipment. 4. The product classification points to a need for heavy-duty, mobile equipment. 5. The fixed-price contract type aims to provide cost certainty for the government.

Value Assessment

Rating: fair

The total award amount of $60.4 million for tractors over a period of approximately 10 years (from initial award to final delivery) suggests a significant investment. Without specific per-unit pricing or comparison to similar contracts for wheeled tractors, it is difficult to definitively assess value for money. However, the sole-source nature of the award raises concerns about whether the government received the most competitive pricing possible. Benchmarking against market rates for similar industrial tractors would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, John Deere Construction & Forestry Company, was solicited. This approach bypasses the competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The lack of competition means that the government did not explore offers from other manufacturers of wheeled tractors, which could have resulted in a more favorable outcome.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. This limits the government's ability to secure the best possible value.

Public Impact

The U.S. Marine Corps benefits from the acquisition of specialized wheeled tractors. These tractors are likely used for logistical support, construction, and maintenance operations. The geographic impact is primarily on military installations where the Marine Corps operates. The contract supports jobs within John Deere's manufacturing and supply chain operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs.
Long contract duration may indicate a lack of market alternatives or lock-in.
Lack of detailed performance metrics makes it hard to assess operational effectiveness.
No clear indication of small business subcontracting opportunities.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to a known manufacturer suggests reliability and established product lines.
Long duration may indicate a stable, ongoing operational requirement.

Sector Analysis

This contract falls within the industrial equipment manufacturing and sales sector, specifically focusing on heavy machinery like wheeled tractors. The market for such equipment is characterized by large manufacturers with established distribution networks. Government procurement of specialized vehicles like these is common across various military branches and agencies for operational and logistical support. Benchmarking against other government contracts for similar heavy equipment would provide context on pricing and volume.

Small Business Impact

There is no indication in the provided data that this contract included a small business set-aside. The award to a large corporation like John Deere suggests that small businesses were likely not primary recipients of this prime contract. Subcontracting opportunities for small businesses are not explicitly detailed, but it is possible that John Deere engaged small businesses for components or services.

Oversight & Accountability

The contract was awarded by the Marine Corps Systems Command, which is responsible for equipping the Marine Corps. Oversight would typically involve contract administration by the Defense Contract Management Agency (DCMA) to ensure compliance with terms and conditions. Transparency is limited due to the sole-source nature and lack of publicly available performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Marine Corps Vehicle Procurement
Heavy Equipment Acquisition
Defense Logistics Support Equipment
Industrial Machinery Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.4 million to JOHN DEERE CONSTRUCTION & FORESTRY COMPANY. 200101!000016!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785401C3077 !A!N!*!N! !20001026!20050228!073489726!073489726!005267471!N!JOHN DEERE CONSTRUCTION EQUIPM!1175 EAST 90TH STREET !DAVENPORT !IA!52808!19000!163!19!DAVENPORT !SCOTT !IOWA !+000010754529!N!N!000000000000!2420!TRACTORS, WHEELED !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !333924!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is JOHN DEERE CONSTRUCTION & FORESTRY COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $60.4 million.

What is the period of performance?

Start: 2000-10-26. End: 2011-08-23.

What is the specific operational role of these wheeled tractors within the Marine Corps?

The provided data classifies the item as 'TRACTORS, WHEELED' under PSC 2420. While the specific operational role is not detailed, wheeled tractors of this nature are typically used for a variety of tasks including construction, material handling, towing, and general base support operations. Within the Marine Corps, they could be employed in forward operating bases for logistical movement of supplies, engineering tasks, or maintenance of grounds and facilities. The 'JOHN DEERE CONSTRUCTION EQUIPM' designation further suggests a utility geared towards construction and heavy-duty tasks rather than combat roles.

How does the $60.4 million award compare to typical spending on similar equipment by other defense agencies?

Comparing the $60.4 million award requires identifying comparable contracts for wheeled tractors or similar heavy construction equipment across the Department of Defense or other federal agencies. Without specific per-unit costs or detailed specifications, a direct comparison is challenging. However, the duration of the contract (initial award 2000-10-26, final delivery 2011-08-23, though the data shows an award of 3953 days which is over 10 years) and the sole-source nature suggest this was a significant, long-term acquisition. Agencies like the Army Corps of Engineers or Naval Facilities Engineering Command might procure similar equipment, but the pricing and competition levels would need to be analyzed on a case-by-case basis to establish a benchmark.

What are the potential risks associated with a sole-source award for such a large sum?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced value for money. Taxpayers may end up paying more than necessary because alternative suppliers were not considered. Additionally, sole-source contracts can create vendor lock-in, making it difficult or costly to switch to a different supplier in the future. There's also a risk that the awarded contractor may not be as innovative or responsive as they might be under competitive pressure. Oversight and negotiation become even more critical in sole-source situations to mitigate these risks.

What is John Deere Construction & Forestry Company's track record with government contracts, particularly with the Marine Corps?

John Deere Construction & Forestry Company, a well-established manufacturer of heavy equipment, has a history of supplying equipment to government entities. While this specific contract highlights a significant sole-source award to the Marine Corps, their broader track record likely includes numerous other contracts, potentially including competitively awarded ones, for various types of machinery across different federal agencies. A deeper analysis would involve reviewing their past performance ratings, any past issues or disputes on government contracts, and the volume and types of equipment previously supplied to the Department of Defense and specifically the Marine Corps.

Were there any justifications provided for awarding this contract on a sole-source basis?

The provided data simply states 'CT: NOT COMPETED', which indicates a sole-source or non-competitive award. Federal procurement regulations typically require a justification for sole-source awards, often citing reasons such as urgency, unique capabilities of a single source, or lack of adequate competition. Without access to the contract file or associated documentation, the specific justification for this award to John Deere is not discernible from the data presented. Such justifications are crucial for understanding why the standard competitive process was bypassed.

How does the duration of this contract (over 10 years) impact its overall value and risk assessment?

A contract duration spanning over 10 years (from initial award to final delivery date indicated) for heavy equipment like tractors can have mixed implications for value and risk. On one hand, it suggests a stable, long-term operational requirement for the Marine Corps, potentially allowing for bulk purchasing efficiencies and consistent support. On the other hand, such a long commitment increases the risk of technological obsolescence, changes in operational needs, and potential price escalation if not structured carefully. The firm fixed-price nature helps mitigate some cost overrun risks for the government, but the long duration necessitates careful monitoring to ensure the equipment remains relevant and the pricing remains fair throughout its lifecycle.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing

Product/Service Code: TRACTORS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1175 EAST 90TH STREET, DAVENPORT, IA, 01

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline