DoD awards $12.4M for HMEE Type III Backhoe Loader support, extending contract to 2016
Contract Overview
Contract Amount: $12,437,490 ($12.4M)
Contractor: CNH Industrial America LLC
Awarding Agency: Department of Defense
Start Date: 2008-06-16
End Date: 2016-08-30
Contract Duration: 2,997 days
Daily Burn Rate: $4.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Other
Official Description: NEW SERVICE AND MAINTENANCE CONTRACT TO SUPPORT HMEE TYPE III - BACKHOE LOADER (BHL) ON THE PRODUCTION CONTRACT W56HZV-05-D-0285.
Place of Performance
Location: RACINE, RACINE County, WISCONSIN, 53404
Plain-Language Summary
Department of Defense obligated $12.4 million to CNH INDUSTRIAL AMERICA LLC for work described as: NEW SERVICE AND MAINTENANCE CONTRACT TO SUPPORT HMEE TYPE III - BACKHOE LOADER (BHL) ON THE PRODUCTION CONTRACT W56HZV-05-D-0285. Key points: 1. Contract value of $12.4M for essential heavy equipment maintenance. 2. CNH Industrial America LLC is the sole awardee. 3. Risk of price escalation due to time and materials pricing. 4. Spending falls within the Commercial and Industrial Machinery repair sector.
Value Assessment
Rating: fair
The contract value of $12.4M appears reasonable for a multi-year maintenance agreement for specialized heavy equipment. However, the time and materials pricing structure introduces uncertainty regarding the final cost and potential for overruns compared to fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may have restricted the pool of potential bidders, potentially impacting price discovery and leading to a less competitive outcome than a truly full and open process.
Taxpayer Impact: The limited competition and time and materials pricing could lead to higher costs for taxpayers than a more competitive, fixed-price contract might achieve.
Public Impact
Ensures operational readiness of critical Army equipment. Supports maintenance and repair services for heavy machinery. Potential for increased costs due to pricing structure. Limited competition may not yield the best value for taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing
- Limited competition
- Long contract duration
Positive Signals
- Supports critical defense equipment
- Awarded to established vendor
Sector Analysis
This contract falls within the Commercial and Industrial Machinery and Equipment Repair and Maintenance sector (NAICS 811310). Spending in this sector is crucial for maintaining the operational readiness of government fleets and infrastructure, with benchmarks varying widely based on equipment type and service complexity.
Small Business Impact
The awardee, CNH Industrial America LLC, is a large business. There is no indication in the provided data that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would typically involve contract officers and technical representatives ensuring adherence to terms, quality of service, and proper billing under the time and materials structure.
Related Government Programs
- Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to Time and Materials pricing.
- Limited competition may not result in optimal pricing.
- Lack of transparency in source exclusion justification.
- Long contract duration increases exposure to price fluctuations.
Tags
commercial-and-industrial-machinery-and-, department-of-defense, wi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.4 million to CNH INDUSTRIAL AMERICA LLC. NEW SERVICE AND MAINTENANCE CONTRACT TO SUPPORT HMEE TYPE III - BACKHOE LOADER (BHL) ON THE PRODUCTION CONTRACT W56HZV-05-D-0285.
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $12.4 million.
What is the period of performance?
Start: 2008-06-16. End: 2016-08-30.
What was the justification for excluding other sources, and how was the pricing determined to be fair and reasonable under a time and materials basis?
The justification for excluding other sources is not detailed in the provided data. Typically, such exclusions require a strong rationale, such as unique capabilities or existing infrastructure. For time and materials contracts, fair and reasonable pricing is often determined by comparing labor rates and material markups against industry standards and historical data, though this can be challenging without competitive bids.
What are the potential risks associated with the time and materials (T&M) pricing model over the contract's duration, and how are these risks mitigated?
The primary risk of T&M is the potential for cost overruns as the final price is not fixed. Mitigation strategies include establishing ceiling prices, requiring detailed cost reporting, implementing robust oversight to ensure efficient labor use and necessary parts, and conducting regular audits. Without these, the government may pay more than necessary for services rendered.
How does the performance of HMEE Type III equipment under this maintenance contract impact overall Army operational readiness and cost-effectiveness?
Effective maintenance under this contract is critical for ensuring the HMEE Type III backhoe loaders are operational when needed, directly supporting Army missions and readiness. If maintenance is efficient and cost-effective, it preserves asset value and minimizes downtime. Conversely, poor performance or excessive costs could negatively impact readiness and strain the equipment budget.
Industry Classification
NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
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, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $12,954,695
Exercised Options: $12,437,490
Current Obligation: $12,437,490
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-06-16
Current End Date: 2016-08-30
Potential End Date: 2016-08-30 12:08:00
Last Modified: 2019-01-25
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