Department of Defense awards $524M for truck trailer manufacturing, with Oshkosh Defense LLC as the primary contractor

Contract Overview

Contract Amount: $524,217,302 ($524.2M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2013-01-09

End Date: 2019-09-15

Contract Duration: 2,440 days

Daily Burn Rate: $214.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ADDING ORDERING YEAR 05 PROGRAM SUPPORT.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $524.2 million to OSHKOSH DEFENSE LLC for work described as: ADDING ORDERING YEAR 05 PROGRAM SUPPORT. Key points: 1. Contract value of over half a billion dollars indicates significant investment in logistics and transportation capabilities. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. A duration of 2440 days (approximately 6.7 years) points to a long-term need for these services. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The North American Industry Classification System (NAICS) code 336212 signifies a focus on truck and trailer manufacturing. 6. The award was a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or program.

Value Assessment

Rating: good

The total contract value of $524.2 million over nearly seven years suggests a substantial investment. Benchmarking this against similar large-scale defense logistics contracts is challenging without more specific details on the exact nature of the trailers and their intended use. However, the firm fixed-price nature of the contract indicates a commitment to cost control by the government, assuming the initial pricing was competitive. The relatively low number of delivery orders (3) against the total value might warrant further investigation into the distribution of funds across the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a competitive environment that should theoretically lead to better pricing and value for the government. The data indicates 3 delivery orders were issued, but the number of initial bidders is not specified. A competitive award process is generally favorable for price discovery and ensuring the government receives the best possible offer.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a marketplace where contractors vie for the best price and quality, potentially leading to cost savings and improved product offerings.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, which will receive the manufactured truck trailers. These trailers are likely intended to support military logistics, troop movement, and equipment transport, enhancing operational readiness. The geographic impact is primarily within the United States, where the manufacturing and delivery will occur, potentially supporting domestic industrial capacity. The contract supports jobs in the truck and trailer manufacturing sector, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial fixed-price estimates do not accurately reflect manufacturing complexities over a long contract duration.
Dependence on a single contractor, Oshkosh Defense LLC, for a significant portion of the defense logistics fleet could pose supply chain risks.
The specific capabilities and intended use of these trailers are not detailed, making it difficult to assess if they meet evolving military requirements.
Long contract duration increases the risk of technological obsolescence if trailer designs do not incorporate future-proof features.

Positive Signals

The firm fixed-price contract structure transfers cost risk to the contractor, Oshkosh Defense LLC.
Awarding under full and open competition suggests a thorough vetting of potential suppliers and competitive pricing.
The substantial value indicates a critical need being met, contributing to the overall operational effectiveness of the armed forces.
Oshkosh Defense LLC is a known entity in defense vehicle manufacturing, suggesting a degree of established capability and reliability.

Sector Analysis

The truck and trailer manufacturing sector (NAICS 336212) is a critical component of the broader transportation and defense industrial base. This contract falls within the defense sector's procurement of essential equipment for logistics and operational support. The value of this single contract, exceeding $500 million, represents a significant portion of annual spending within this specific manufacturing niche for the Department of Defense. Comparable spending benchmarks would typically involve analyzing other large-scale vehicle or equipment procurements by military branches.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-asides. Oshkosh Defense LLC is a large corporation, suggesting that the primary contract is not directly benefiting small businesses through set-asides. However, it is possible that Oshkosh Defense LLC may engage small businesses as subcontractors for components or services, which would be a positive impact on the small business ecosystem. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged during the contract's performance or execution.

Related Government Programs

Department of Defense Logistics Support Contracts
Military Vehicle Procurement
Tactical Wheeled Vehicle Programs
Army Equipment Modernization
Defense Supply Chain Management

Risk Flags

Long contract duration increases risk of obsolescence and requirement changes.
Firm Fixed Price contract shifts cost risk to contractor, but requires careful initial pricing.
Dependence on a single large contractor for critical logistics assets.
Lack of specific trailer details limits assessment of suitability for evolving military needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $524.2 million to OSHKOSH DEFENSE LLC. ADDING ORDERING YEAR 05 PROGRAM 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 $524.2 million.

What is the period of performance?

Start: 2013-01-09. End: 2019-09-15.

What specific types of truck trailers were procured under this contract, and what are their intended military applications?

The provided data identifies the contract's focus as 'Truck Trailer Manufacturing' under NAICS code 336212, with Oshkosh Defense LLC as the contractor. However, it does not specify the exact types of trailers (e.g., flatbeds, tankers, specialized cargo, heavy equipment transporters) or their precise military applications. These trailers could range from general logistics support to highly specialized roles in transporting equipment, fuel, or personnel in various operational environments. Understanding the specific trailer types and their intended use is crucial for assessing their contribution to military readiness and operational effectiveness. Without this detail, it's difficult to benchmark their value against specific mission requirements or compare them to similar procurements for distinct trailer functionalities.

How does the per-unit cost of these trailers compare to commercial equivalents or similar military procurements?

The provided data does not include per-unit cost information, making a direct comparison to commercial equivalents or other military procurements impossible. The total contract value of $524.2 million spread over potentially numerous units (the number of units is not specified) prevents a calculation of average per-unit cost. To perform such a benchmark, detailed specifications of the trailers, the quantity ordered, and the total price paid per unit would be required. Commercial trailer costs vary widely based on capacity, features, and manufacturer, while military-specific trailers often incorporate enhanced durability, specialized features, and higher production costs due to stringent testing and quality control requirements.

What was the historical spending pattern for truck trailer manufacturing by the Department of Defense prior to this award?

The provided data focuses solely on this specific $524.2 million contract awarded to Oshkosh Defense LLC, initiated in 2013 and ending in 2019. It does not offer historical spending context for truck trailer manufacturing by the Department of Defense. To analyze historical patterns, one would need to examine contract awards over multiple fiscal years, identifying spending trends, key contractors, and the types of trailers procured. This would involve querying databases like the Federal Procurement Data System (FPDS) for similar NAICS codes (e.g., 336212) and contract descriptions related to military trailers across different branches and time periods. Without this broader dataset, it's impossible to determine if this award represents an increase, decrease, or stable level of spending in this category.

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

Oshkosh Defense LLC has a significant track record with large-scale defense vehicle and equipment contracts, particularly with the U.S. military. They are well-known for producing the Family of Medium Tactical Vehicles (FMTV), the Joint Light Tactical Vehicle (JLTV), and various heavy equipment transporters and support vehicles. Their experience encompasses complex manufacturing, integration of advanced technologies, and fulfilling demanding delivery schedules for the Department of Defense. This extensive history suggests a strong capability to manage and execute contracts of the magnitude of the $524.2 million truck trailer award. Their established position within the defense industrial base implies familiarity with military specifications, testing protocols, and logistical requirements.

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

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, for a contract of this nature (firm fixed-price delivery order for manufactured goods), typical KPIs would likely include: On-Time Delivery (meeting scheduled delivery dates for trailers), Quality Acceptance (ensuring trailers meet all specified technical requirements and pass inspection), Contract Compliance (adherence to all terms and conditions, including warranty provisions), and potentially Cost Performance (though less critical for the government in a fixed-price contract, monitoring contractor's adherence to the agreed price is key). The effectiveness would ultimately be measured by the operational utility and reliability of the delivered trailers in supporting Army logistics and missions.

Are there any identified risks associated with the long duration (2440 days) of this contract?

Yes, the long duration of 2440 days (approximately 6.7 years) for this contract presents several potential risks. Firstly, there's the risk of technological obsolescence; trailer designs and associated technologies could evolve significantly over this period, potentially making the delivered units outdated before the end of their service life. Secondly, economic risks, such as fluctuations in material costs (steel, components) or labor rates, could impact the contractor's ability to maintain profitability under a firm fixed-price agreement, potentially leading to requests for modification or, in extreme cases, performance issues if the contractor faces financial distress. Thirdly, changes in military requirements or strategic priorities could alter the need for these specific trailers, leading to potential contract modifications or early termination. Finally, maintaining consistent quality and oversight over such an extended period requires sustained effort from both the contractor and the government.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oshkosh Corp

Address: 2307 OREGON ST, OSHKOSH, WI, 54903

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

Financial Breakdown

Contract Ceiling: $524,217,302

Exercised Options: $524,217,302

Current Obligation: $524,217,302

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0159

IDV Type: IDC

Timeline