DoD awards $1.26B for heavy tactical vehicles, with Oshkosh Defense securing the sole-source contract

Contract Overview

Contract Amount: $1,264,119,921 ($1.3B)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-10-31

End Date: 2012-09-30

Contract Duration: 1,430 days

Daily Burn Rate: $884.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ISSUANCE OF 3 YEAR REQUIREMENTS CONTRACT FOR FAMILY OF HEAVY TACTICAL VEHICLES- HEMTTS/HETS/PLSS AND PLS TRAILER (ALONG WITH ASSOCIATED KITS)

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $1.26 billion to OSHKOSH DEFENSE LLC for work described as: ISSUANCE OF 3 YEAR REQUIREMENTS CONTRACT FOR FAMILY OF HEAVY TACTICAL VEHICLES- HEMTTS/HETS/PLSS AND PLS TRAILER (ALONG WITH ASSOCIATED KITS) Key points: 1. This contract represents a significant investment in the Army's heavy tactical vehicle fleet. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited innovation. 3. Performance risk appears moderate given the established nature of the vehicles and contractor. 4. The contract duration of approximately four years provides a stable supply chain for critical equipment. 5. This spending falls within the broader Defense sector's procurement of ground vehicles and support equipment.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive bids. The total award of over $1.26 billion for a three-year requirement contract suggests a substantial commitment. However, the lack of competition means there's no direct market comparison to assess if the pricing is optimal. The firm-fixed-price structure offers some cost certainty, but the absence of competitive pressure could lead to less favorable terms for the government compared to a competed award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Oshkosh Defense LLC. The specific justification for this sole-source designation is not provided in the data, but it typically implies that only one responsible source could fulfill the requirement. This lack of competition limits the government's ability to explore alternative solutions or leverage market dynamics to achieve lower prices.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, the government cannot be assured it is receiving the best possible value for its investment in these critical vehicles.

Public Impact

The U.S. Army benefits from the acquisition of essential heavy tactical vehicles for troop transport and logistics. This contract ensures the continued availability of HEMTT, HETS, PLSS, and associated kits, crucial for military operations. The geographic impact is national, supporting military readiness across various operational theaters. Workforce implications include continued employment at Oshkosh Defense facilities and potentially at supplier companies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of competition may stifle innovation and limit the exploration of alternative vehicle technologies.
Dependence on a single contractor for critical heavy tactical vehicles could pose a supply chain risk if issues arise with the sole provider.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract addresses a clear and ongoing need for heavy tactical vehicles within the Department of Defense.
Oshkosh Defense is an established provider of military vehicles, suggesting a degree of reliability.

Sector Analysis

This contract falls within the Ground Vehicle manufacturing sector, a critical component of the Defense industry. The market for heavy tactical vehicles is specialized, often dominated by a few key players capable of meeting stringent military specifications. Spending in this area is driven by military modernization efforts, operational tempo, and the need to replace aging fleets. Comparable spending benchmarks would typically involve other large-scale vehicle procurement contracts within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, there are no direct subcontracting implications for small businesses specified here. However, the prime contractor may engage small businesses for components or services, but this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Family of Heavy Tactical Vehicles (FHTV)
Logistics Vehicle System Replacement (LVSR)
Medium Tactical Vehicle Replacement (MTVR)
Joint Light Tactical Vehicle (JLTV)

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Limited innovation incentive

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.26 billion to OSHKOSH DEFENSE LLC. ISSUANCE OF 3 YEAR REQUIREMENTS CONTRACT FOR FAMILY OF HEAVY TACTICAL VEHICLES- HEMTTS/HETS/PLSS AND PLS TRAILER (ALONG WITH ASSOCIATED KITS)

Who is the contractor on this award?

The obligated recipient is OSHKOSH DEFENSE 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 $1.26 billion.

What is the period of performance?

Start: 2008-10-31. End: 2012-09-30.

What is the historical spending trend for Oshkosh Defense LLC with the Department of Defense for heavy tactical vehicles?

Analyzing historical spending for Oshkosh Defense LLC with the DoD for heavy tactical vehicles requires access to broader contract databases. However, this specific award of approximately $1.26 billion over three years indicates a significant and ongoing relationship. Oshkosh Defense is a well-established prime contractor for various military vehicle platforms. Without more granular historical data, it's difficult to pinpoint precise trends, but the scale of this contract suggests a sustained demand for their products and a strong existing partnership with the Army. Future analysis could involve tracking the total value of contracts awarded to Oshkosh for similar vehicle families over multiple fiscal years to identify growth, decline, or stability in spending.

How does the per-unit cost of these vehicles compare to similar contracts or commercial equivalents?

Determining the per-unit cost and comparing it to similar contracts or commercial equivalents is challenging with the provided data. The contract is a requirements contract with delivery orders, and the total award amount of $1.26 billion covers a three-year period for a 'family of heavy tactical vehicles' along with associated kits. This means the total value encompasses various vehicle types and configurations, not a single standardized unit. Furthermore, as a sole-source award, there's no competitive benchmark to assess pricing efficiency. Commercial equivalents for military-grade heavy tactical vehicles are rare due to specialized requirements (armor, off-road capability, etc.), making direct comparisons difficult and often not representative of the actual cost drivers for military applications.

What are the specific risks associated with a sole-source award for critical military equipment?

Sole-source awards for critical military equipment like heavy tactical vehicles present several risks. Primarily, the lack of competition can lead to inflated prices, as the government cannot leverage market forces to secure the best value. This can result in taxpayers paying more than necessary. Secondly, it can stifle innovation; without the pressure of competing for new contracts, the incumbent contractor may have less incentive to invest in research and development or adopt more efficient production methods. Thirdly, it creates a dependency on a single supplier. If the sole-source contractor faces production issues, financial instability, or geopolitical challenges, the supply chain for essential military assets could be severely disrupted, impacting readiness.

What is the expected performance and reliability of the HEMTTS/HETS/PLSS vehicles under this contract?

The HEMTT (Heavy Expanded Mobility Tactical Truck), HETS (Heavy Equipment Transport System), and PLSS (Palletized Load System) are established platforms within the U.S. military's logistics backbone, manufactured by Oshkosh Defense. These vehicles are designed for demanding operational environments, offering robust mobility and payload capacity. While specific performance metrics and reliability data for this particular contract period are not detailed, these vehicle families have a proven track record in various military operations globally. Oshkosh Defense generally adheres to stringent military specifications, and the firm-fixed-price contract implies the government expects a certain level of performance and reliability as defined in the contract's technical requirements.

How does this contract align with the Department of the Army's overall vehicle modernization strategy?

This contract for the Family of Heavy Tactical Vehicles (FHTV) directly supports the Department of the Army's need for robust logistics and transport capabilities. These vehicles are essential for moving personnel, equipment, and supplies across diverse terrains and operational theaters. While the Army also pursues modernization through programs like the Joint Light Tactical Vehicle (JLTV) and the potential replacement of other vehicle classes, the continued procurement and sustainment of heavy tactical vehicles like the HEMTT, HETS, and PLSS indicate their ongoing strategic importance. This contract ensures the current fleet remains operational and capable, complementing broader modernization efforts by maintaining a critical component of the Army's logistical infrastructure.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oshkosh Corp (UEI: 006070445)

Address: 2307 OREGON ST, OSHKOSH, WI, 54903

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,264,119,921

Exercised Options: $1,264,119,921

Current Obligation: $1,264,119,921

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0024

IDV Type: IDC

Timeline