Department of Defense awards $3.45B for MRAP ATVs, including parts and field support, to Oshkosh Defense LLC

Contract Overview

Contract Amount: $3,452,976,200 ($3.5B)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2009-06-30

End Date: 2012-12-28

Contract Duration: 1,277 days

Daily Burn Rate: $2.7M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE MRAP ATVS, INCLUDING ASSOCIATED PARTS AND FIELD SUPPORT.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $3.45 billion to OSHKOSH DEFENSE LLC for work described as: PURCHASE MRAP ATVS, INCLUDING ASSOCIATED PARTS AND FIELD SUPPORT. Key points: 1. The contract represents a significant investment in armored vehicle capabilities for the U.S. Army. 2. Oshkosh Defense LLC, a known entity in military vehicle manufacturing, secured this award. 3. The duration of the contract suggests a sustained need for these vehicles and associated services. 4. The firm fixed-price nature of the contract aims to provide cost certainty for the government. 5. The award falls under the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry, indicating a specialized sector. 6. The contract's value places it among substantial procurement actions within the defense sector.

Value Assessment

Rating: good

The total award of over $3.45 billion for MRAP ATVs, parts, and field support is substantial. Benchmarking this against similar large-scale vehicle procurement contracts is challenging without more specific data on unit costs and support packages. However, the firm fixed-price contract type suggests an effort to control costs. The award amount reflects the complexity and scale of providing advanced armored vehicles and ongoing maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The fact that there were 5 bids received suggests a competitive environment, which is generally favorable for price discovery and obtaining better value. The specific details of the bidding process and the number of proposals submitted would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, potentially saving taxpayer dollars compared to sole-source or limited competition awards. A robust bidding process increases the likelihood of securing the best possible value for the government.

Public Impact

The primary beneficiaries are U.S. Army personnel who will be equipped with Mine-Resistant Ambush Protected All-Terrain Vehicles (MRAP ATVs). The contract delivers essential armored vehicles designed to protect troops from explosive threats, along with critical spare parts and field support services. The geographic impact is national, with production likely occurring at Oshkosh facilities and deployment to various Army units domestically and potentially overseas. This contract supports jobs within the defense manufacturing sector, specifically in armored vehicle production and maintenance, contributing to the industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if field support requirements exceed initial estimates.
Long-term sustainment costs for specialized vehicles can be significant.
Dependence on a single contractor for critical parts and support could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty for the base award.
Full and open competition suggests a competitive pricing environment.
Award to an established manufacturer with experience in military vehicles.
Inclusion of field support indicates a comprehensive approach to vehicle readiness.

Sector Analysis

The defense manufacturing sector, particularly in armored vehicle production, is characterized by high technological requirements, stringent quality standards, and significant government investment. This contract for MRAP ATVs fits within the broader category of military vehicle manufacturing, a segment that often sees large procurement values due to the specialized nature and critical role of these assets. Comparable spending benchmarks would involve other major vehicle platform procurements for various military branches.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify small business set-asides. While Oshkosh Defense LLC is a large business, there may be subcontracting opportunities for small businesses within the supply chain for parts and services. The extent of small business participation would depend on Oshkosh's subcontracting plan and the nature of the components and support required.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and compliance. Transparency is facilitated through contract award databases, though detailed performance metrics and financial breakdowns may be limited. Inspector General (IG) investigations could be initiated if specific concerns regarding fraud, waste, or abuse arise.

Related Government Programs

Mine-Resistant Ambush Protected (MRAP) Vehicle Program
Tactical Wheeled Vehicle Programs
Department of Defense Vehicle Procurement
Military Armored Vehicle Manufacturing

Risk Flags

Potential for scope creep in field support requirements.
Long-term sustainment costs may exceed initial projections.
Dependence on contractor for critical maintenance and parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.45 billion to OSHKOSH DEFENSE LLC. PURCHASE MRAP ATVS, INCLUDING ASSOCIATED PARTS AND FIELD SUPPORT.

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 $3.45 billion.

What is the period of performance?

Start: 2009-06-30. End: 2012-12-28.

What is the historical spending trend for MRAP ATVs by the Department of Defense?

Historical spending on MRAP ATVs has been substantial, particularly during periods of active conflict where their protective capabilities were highly valued. The initial surge in MRAP procurement occurred in the mid-to-late 2000s in response to threats in Iraq and Afghanistan. While the peak procurement years may have passed, ongoing sustainment, upgrades, and replacement of older fleets continue to represent significant, albeit often lower, annual expenditures. Analyzing specific contract awards over time, like the one to Oshkosh Defense, reveals the lifecycle costs associated with these critical assets, including initial acquisition, spare parts, and long-term field support. The total outlay for MRAP programs across all variants and contractors has amounted to tens of billions of dollars over the past two decades.

How does the unit cost of these MRAP ATVs compare to similar vehicles in the market or previous contracts?

Determining the precise unit cost for these MRAP ATVs is complex without access to the detailed pricing structure of the contract. However, MRAP vehicles, due to their specialized armor, advanced suspension, and survivability features, are inherently more expensive than standard tactical vehicles. Historical data suggests that unit costs for various MRAP variants have ranged significantly, often from several hundred thousand to over a million dollars per vehicle, depending on the specific model, configuration, and included support packages. Comparing this specific award's implied unit cost (total award divided by estimated number of vehicles, if known) to benchmarks from similar full-and-open competitive contracts awarded around the same period would be necessary for a robust value assessment. Factors like inflation, technological upgrades, and the inclusion of extensive field support can cause unit costs to fluctuate.

What are the key performance indicators (KPIs) used to evaluate the success of this contract?

Key performance indicators for a contract like this would likely focus on several critical areas. Delivery timeliness is paramount, ensuring that the vehicles and parts are provided according to the schedule outlined in the contract. Quality assurance is another major KPI, verifying that the MRAP ATVs meet all specified technical requirements, safety standards, and performance benchmarks. For field support, metrics might include response times for maintenance, availability of spare parts, and the overall readiness rate of the fielded vehicles. Contractor performance ratings, often assessed through systems like the Contractor Performance Assessment Reporting System (CPARS), would also be a crucial KPI, reflecting the contractor's overall adherence to contract terms, responsiveness, and management effectiveness. Ultimately, the successful fulfillment of the Army's operational requirements for protected mobility would be the overarching measure of success.

What is Oshkosh Defense LLC's track record with similar large-scale military vehicle contracts?

Oshkosh Defense LLC has a well-established and extensive track record in manufacturing heavy-duty military vehicles for the U.S. Department of Defense and allied nations. They are known for producing a wide range of tactical wheeled vehicles, including the Family of Heavy Tactical Vehicles (FHTV), Joint Light Tactical Vehicles (JLTV), and previously, various MRAP variants. Their experience encompasses large-scale production, complex logistics, and providing integrated support services. Oshkosh has consistently been a major player in defense vehicle programs, often winning significant contracts through competitive bidding processes. Their performance history generally reflects a capability to meet demanding production schedules and technical specifications, although like any large contractor, they have faced scrutiny and challenges on specific programs. Their long-standing relationship with the military underscores their perceived reliability and manufacturing prowess in this specialized sector.

Are there any specific risks associated with the 'field support' component of this contract?

Yes, the 'field support' component of this contract carries several potential risks. Firstly, the scope of field support can be difficult to precisely define and estimate upfront, potentially leading to cost growth if unforeseen maintenance needs or logistical challenges arise. Secondly, ensuring timely and effective support across potentially dispersed operational areas requires robust logistical planning and execution by the contractor, which can be complex and prone to disruption. Thirdly, the availability and cost of specialized technicians and spare parts for field repairs can fluctuate, impacting readiness and overall program costs. Finally, reliance on contractor support for critical maintenance functions can create dependencies that might be vulnerable to supply chain issues or contractor performance problems, necessitating careful oversight and contingency planning by the government.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2307 OREGON ST, OSHKOSH, WI, 54903

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

Financial Breakdown

Contract Ceiling: $3,452,976,200

Exercised Options: $3,452,976,200

Current Obligation: $3,452,976,200

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV09D0111

IDV Type: IDC

Timeline