Department of the Army awards $1.94B for 2,634 Family of Medium Tactical Vehicles (FMTV), OY 02 Program Support

Contract Overview

Contract Amount: $1,943,242,978 ($1.9B)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2010-05-07

End Date: 2015-08-31

Contract Duration: 1,942 days

Daily Burn Rate: $1.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ADDING 2,634 EACH FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV), ORDERING YEAR (OY) 02 PROGRAM SUPPORT, AND FRET TO CONTRACT W56HZV-09-D-0159

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $1.94 billion to OSHKOSH DEFENSE LLC for work described as: ADDING 2,634 EACH FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV), ORDERING YEAR (OY) 02 PROGRAM SUPPORT, AND FRET TO CONTRACT W56HZV-09-D-0159 Key points: 1. Value for money assessed through firm-fixed-price contract type, aiming for cost certainty. 2. Full and open competition suggests a robust market with potential for competitive pricing. 3. Delivery order under an existing contract indicates a need for continued supply and potential for follow-on orders. 4. The contract supports the Army's tactical vehicle fleet, crucial for operational readiness. 5. Oshkosh Defense LLC, the incumbent contractor, has a track record with this specific vehicle program. 6. The duration of the contract (1942 days) suggests a significant, long-term requirement.

Value Assessment

Rating: good

This contract, a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, represents a significant investment in tactical vehicle sustainment. The firm-fixed-price (FFP) structure is generally favorable for the government, as it shifts cost risk to the contractor. Benchmarking against similar large-scale vehicle procurements is challenging without more granular data on specific configurations and support services. However, the scale of this order suggests a competitive process likely yielded reasonable pricing for the quantity of vehicles and associated program support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete for this requirement. This approach is designed to foster a competitive environment, which typically leads to better pricing and innovation. The specific number of bidders is not provided, but the 'full and open' designation implies a broad solicitation.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it is expected to drive down costs and ensure the Army receives the best possible value for its investment in tactical vehicles.

Public Impact

The primary beneficiaries are the U.S. Army units requiring medium tactical vehicles for troop transport, logistics, and various mission support roles. Services delivered include the provision of 2,634 Family of Medium Tactical Vehicles (FMTV) along with program support. The geographic impact is nationwide, supporting Army operations across various installations and deployment locations. Workforce implications include continued employment for manufacturing and support personnel at Oshkosh Defense and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if program support elements are not tightly managed.
Dependence on a single contractor for a critical fleet component could pose supply chain risks.
Ensuring adequate spare parts availability and maintenance support throughout the vehicle lifecycle.

Positive Signals

Firm-fixed-price contract type provides cost predictability.
Full and open competition suggests a healthy market and potential for competitive pricing.
Award to an established contractor with experience in FMTV production offers reduced execution risk.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by high R&D costs, long production cycles, and significant government investment. This contract falls within the broader category of tactical wheeled vehicle procurement, a critical component of military logistics and operational capability. The market is dominated by a few large defense contractors, making competition dynamics crucial for value. Comparable spending benchmarks would involve analyzing other large-scale tactical vehicle procurements by the U.S. military or allied nations.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no explicit small business set-aside (ss) for this specific delivery order. This suggests that the primary award went to a large business. However, Oshkosh Defense, like many prime contractors, likely engages small businesses through subcontracting opportunities to fulfill various components and services required for the FMTV production and support. The extent of small business subcontracting would need further investigation to assess its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is primarily managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded within the firm-fixed-price contract terms, requiring delivery of specified vehicles and support. Transparency is facilitated through contract award databases like FPDS-NG. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Family of Medium Tactical Vehicles (FMTV) Program
Tactical Wheeled Vehicle Fleet Modernization
U.S. Army Logistics Support Contracts
Defense Vehicle Manufacturing
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Potential for cost creep in program support elements.
Long-term sustainment and parts availability risks.
Dependence on incumbent contractor for specialized knowledge.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.94 billion to OSHKOSH DEFENSE LLC. ADDING 2,634 EACH FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV), ORDERING YEAR (OY) 02 PROGRAM SUPPORT, AND FRET TO CONTRACT W56HZV-09-D-0159

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 $1.94 billion.

What is the period of performance?

Start: 2010-05-07. End: 2015-08-31.

What is the historical spending trend for the FMTV program under Oshkosh Defense?

Historical spending data for the FMTV program under Oshkosh Defense reveals a consistent and substantial investment by the Department of the Army over several years. The initial contract for FMTV was awarded in 2008, and subsequent delivery orders and modifications have cumulatively amounted to billions of dollars. This specific $1.94 billion order for OY 02 program support and additional vehicles represents a significant tranche of that ongoing expenditure. Analyzing the annual spending patterns would show fluctuations based on production schedules, modernization efforts, and evolving operational requirements. The sustained funding indicates the critical role the FMTV plays in the Army's logistical capabilities and the long-term commitment to maintaining and replacing this fleet.

How does the per-unit cost of these FMTVs compare to previous orders or similar vehicle types?

Determining the precise per-unit cost for these specific FMTVs is complex without access to the detailed breakdown within the delivery order, as it includes program support. However, the average cost per FMTV in previous large orders has generally ranged from approximately $150,000 to $200,000, depending on the specific variant (e.g., cargo, troop transport, recovery) and the inclusion of associated support packages. This $1.94 billion order for 2,634 vehicles, plus program support, suggests a blended average that needs careful analysis. If the program support component is substantial, the direct vehicle cost might align with historical benchmarks. Variations can arise due to inflation, updated technology, specific configuration requirements, and the competitive landscape at the time of each order. A detailed comparison would require isolating the vehicle cost from the support services.

What are the key performance indicators (KPIs) used to evaluate Oshkosh Defense's performance on this contract?

Key performance indicators (KPIs) for contracts like this typically revolve around delivery timeliness, quality of manufactured vehicles, and the effectiveness of program support. For the FMTV program, the Army likely tracks metrics such as on-time delivery rates for vehicles and parts, defect rates (e.g., number of reported issues per vehicle), Mean Time Between Failures (MTBF) for critical components, and the responsiveness of maintenance and repair services. Program support KPIs might include the availability of technical documentation, the efficiency of training programs, and the successful integration of any upgrades or modifications. Contractual milestones and adherence to specifications are also crucial performance indicators that influence payment and contractor evaluation.

What is the risk associated with the sole source nature of program support, if applicable?

While the vehicle procurement itself was under full and open competition, the 'program support' aspect of this delivery order could potentially involve elements that are more limited in competition, or even sole-source, depending on the specific services required (e.g., specialized technical support, unique diagnostic software). If program support is indeed limited in competition, the primary risk is reduced price competition, potentially leading to higher costs for these services compared to a fully competed scenario. This could also increase the government's reliance on Oshkosh Defense for critical sustainment knowledge and capabilities, potentially limiting flexibility in future support arrangements. Mitigating this risk involves rigorous negotiation of support service pricing, clear performance standards, and potentially exploring options for organic government support or alternative third-party providers where feasible.

How has the Army's requirement for FMTVs evolved since the initial contract award?

The Army's requirements for FMTVs have evolved significantly since the initial contract award, driven by changing operational environments, technological advancements, and lessons learned from deployments. Initially conceived as a replacement for older vehicle platforms, the FMTV program has adapted to incorporate new variants, enhanced protection features, and improved communication systems. The Army has also focused on optimizing the fleet's lifecycle sustainment, leading to increased emphasis on program support, maintenance, and parts availability, as evidenced by this delivery order. Furthermore, evolving threats and mission requirements may necessitate specific configurations or capabilities that have been integrated over time, reflecting a dynamic approach to fleet management rather than a static procurement.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer 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: 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: $1,943,242,978

Exercised Options: $1,943,242,978

Current Obligation: $1,943,242,978

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0159

IDV Type: IDC

Timeline