Caterpillar Inc. has won a $663 million contract with the U.S. Department of Defense for commercial construction equipment, triggering the company’s stock to climb. According to the investment site Zachs.com, Caterpillar shares rose by more than 0.83 percent Wednesday morning, hitting a new all-time intra-day trading high of $117.00 per share. The stock closed at $17.55 a share.
The Pentagon contract is to run five years, ending Aug. 28, 2022. Specifics of the equipment were not disclosed by the Pentagon. The equipment is to be built at multiple Cat sites in the United States and abroad, including Illinois, according to the Pentagon. Its announcement does not say whether any of the equipment will come out of central Illinois.
Citing military confidentiality, Caterpillar declined to discuss specifics of the deal. However, a source said, the order involves large track-type tractors, which are built only in East Peoria’s Building SS and which typically handles military orders.
The Pentagon’s announcement was made as part of the Department of Defense’s daily list of awarded contracts. According to its complete Cat announcement: “Caterpillar Inc., Peoria, Illinois, has been awarded a maximum $663,584,042 fixed-price with economic-price-adjustment contract for commercial construction equipment. This is a five-year contract with no option periods. This was a competitive acquisition with four responses received.
Locations of performance are Illinois, North Carolina, Georgia, Texas, Arkansas, Wisconsin, Minnesota, Austria, Belgium, England, France, Italy and Japan, with an Aug. 28, 2022, performance completion date. Using customers are Army, Navy, Air Force, Marine Corps and federal civilian agencies. Type of appropriation is fiscal 2017 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8EC-17-D-0012).”
Caterpillar said in a statement, “Caterpillar Defense, a key supplier to governments and government contractors globally, was recently awarded a five-year U.S. Department of Defense contract for commercial construction equipment with a maximum value of $663 million. This multi-year agreement with the Defense Logistics Agency is an Indefinite Delivery/Requirements Contract and is expected to include delivery of a variety of machines across Caterpillar’s earthmoving, excavation, material handling & underground, and building construction products.
“The contract reinforces Caterpillar’s long tradition of supporting our men and women in uniform with high-quality equipment for their use in the field.”