Department of the Army awards $289M contract to Oshkosh Defense for truck trailer manufacturing, extending through 2024

Contract Overview

Contract Amount: $288,925,408 ($288.9M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2016-09-30

End Date: 2024-09-30

Contract Duration: 2,922 days

Daily Burn Rate: $98.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY17-19 CONTRACT EXTENSION, ADDITION OF OPTION INCREMENTS, AND PROGRAM SUPPORT.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $288.9 million to OSHKOSH DEFENSE LLC for work described as: FY17-19 CONTRACT EXTENSION, ADDITION OF OPTION INCREMENTS, AND PROGRAM SUPPORT. Key points: 1. Contract value represents a significant investment in tactical wheeled vehicle sustainment and modernization. 2. Full and open competition suggests a robust market for these specialized manufacturing services. 3. Long contract duration indicates a sustained need for these capabilities by the Department of the Army. 4. The contract's focus on truck trailer manufacturing aligns with critical logistical support for military operations. 5. Performance period spans multiple fiscal years, allowing for phased delivery and potential program evolution. 6. The firm-fixed-price structure aims to provide cost certainty for the government.

Value Assessment

Rating: good

The total contract value of approximately $289 million over its extended period appears reasonable given the specialized nature of military vehicle manufacturing. Benchmarking against similar large-scale defense manufacturing contracts suggests that pricing is likely competitive, especially considering the full and open competition. The firm-fixed-price type provides a degree of cost predictability. However, a detailed cost breakdown and comparison to industry standards for similar trailer production would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which is expected to drive favorable pricing and innovation. The Army's decision to use full and open competition suggests confidence in the market's ability to meet the requirements.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to better pricing and a wider range of solutions, maximizing the value of government spending.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential logistical support equipment. Services delivered include the manufacturing and program support for tactical wheeled vehicles, specifically truck trailers. The geographic impact is primarily centered around the contractor's facilities in Wisconsin, with potential downstream effects on national supply chains. Workforce implications include job creation and sustainment within the defense manufacturing sector, particularly in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if material prices or labor costs increase significantly beyond initial projections, despite the firm-fixed-price structure.
Dependence on a single contractor for a critical component could pose supply chain risks if the contractor faces production issues.
Ensuring consistent quality control across a long-duration contract requires diligent oversight.
The long performance period might not fully account for rapid technological advancements in trailer design or military requirements.

Positive Signals

The firm-fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
Awarding to Oshkosh Defense, a known entity in military vehicle production, suggests a level of confidence in their capability and past performance.
The contract's extension and addition of option increments indicate successful program execution and continued need.
Full and open competition likely resulted in a competitive price and a capable supplier.

Sector Analysis

The truck trailer manufacturing sector, particularly for defense applications, is a specialized niche within the broader manufacturing industry. This contract falls under the defense industrial base, which is critical for national security. Spending in this area is driven by the military's need for robust and reliable logistical support. Comparable spending benchmarks would involve analyzing other large-scale vehicle procurement or sustainment contracts within the Department of Defense, which often run into hundreds of millions of dollars due to the scale and complexity of military requirements.

Small Business Impact

The provided data indicates that small business participation was not a primary set-aside consideration for this specific contract (ss: false, sb: false). While Oshkosh Defense is the prime contractor, there may be opportunities for small businesses to participate as subcontractors within their supply chain. The extent of small business subcontracting would depend on Oshkosh Defense's internal policies and the availability of qualified small business suppliers for components and services related to truck trailer manufacturing. Further analysis would be needed to determine the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Army's contracting and program management offices. Accountability measures would include performance metrics, delivery schedules, and quality assurance protocols outlined in the contract. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Tactical Wheeled Vehicles
Logistics Support Equipment
Military Vehicle Manufacturing
Defense Supply Chain Management
Army Vehicle Procurement

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Dependence on a single prime contractor for critical components.
Potential for cost increases not fully captured by FFP if market conditions shift dramatically.
Need for robust quality assurance over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $288.9 million to OSHKOSH DEFENSE LLC. FY17-19 CONTRACT EXTENSION, ADDITION OF OPTION INCREMENTS, AND 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 $288.9 million.

What is the period of performance?

Start: 2016-09-30. End: 2024-09-30.

What is Oshkosh Defense's track record with similar Department of the Army contracts?

Oshkosh Defense has a long-standing and significant track record with the Department of the Army, particularly in the production of tactical wheeled vehicles. They are well-known for manufacturing the Family of Medium Tactical Vehicles (FMTV) and the Joint Light Tactical Vehicle (JLTV). Their extensive experience suggests a deep understanding of military requirements, production capabilities, and sustainment needs. Past performance on large-scale contracts provides a basis for the Army's confidence in their ability to execute this truck trailer manufacturing contract effectively. However, a detailed review of specific past performance evaluations for this contract vehicle type would offer a more granular assessment.

How does the per-unit cost of these truck trailers compare to commercial equivalents or other military variants?

Directly comparing the per-unit cost of these specialized military truck trailers to commercial equivalents or other military variants is challenging without specific unit cost data from the contract. Military-grade trailers often incorporate enhanced durability, survivability features (e.g., blast resistance, specialized suspension), and specific interface requirements (e.g., for military vehicles) that significantly increase their cost compared to standard commercial trailers. Furthermore, the 'truck trailer manufacturing' designation could encompass a wide range of trailer types, from basic cargo trailers to highly specialized equipment transporters. Benchmarking would require detailed specifications of the trailers procured under this contract and comparison with similarly equipped military or high-specification commercial units.

What are the primary risks associated with the long duration of this contract (2016-2024)?

The extended duration of this contract presents several risks. Firstly, there's a risk of technological obsolescence; military requirements or trailer technology could evolve significantly over an eight-year period, potentially making the procured trailers less suitable for future needs. Secondly, economic risks, such as inflation impacting material and labor costs, could erode the value of the firm-fixed-price contract if not adequately managed through contract clauses or if initial estimates were too conservative. Thirdly, supply chain disruptions, either from geopolitical events, natural disasters, or issues with sub-tier suppliers, pose a risk to consistent delivery. Finally, maintaining consistent quality assurance and program oversight over such a long period requires sustained effort and resources from the contracting agency.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of manufacturing?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in manufacturing scenarios where the scope of work is well-defined and risks are understood. For truck trailer manufacturing, FFP provides the government with cost certainty, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to control costs efficiently. However, if unforeseen issues arise during production (e.g., unexpected material price spikes, design challenges), the contractor might be disincentivized from addressing them fully if it impacts their profit margin, potentially leading to compromises in quality or scope if not carefully monitored. The success of FFP often hinges on the accuracy of the initial cost estimates and the contractor's ability to manage their own production costs effectively.

What are the historical spending patterns for truck trailer manufacturing or similar logistical support equipment by the Department of the Army?

Historical spending patterns for truck trailer manufacturing and similar logistical support equipment by the Department of the Army typically show consistent, substantial investment driven by operational readiness and modernization requirements. While specific figures for 'truck trailer manufacturing' alone are often aggregated within broader tactical wheeled vehicle or equipment procurement categories, the Army consistently allocates significant portions of its budget to sustain and expand its logistical fleet. This includes purchases of various types of trailers, from basic cargo haulers to specialized platforms for transporting equipment like engineer vehicles or missile systems. Spending levels can fluctuate based on deployment tempos, equipment recapitalization cycles, and evolving threat environments, but the need for robust trailer support remains a constant.

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 Corporation

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: $288,925,408

Exercised Options: $288,925,408

Current Obligation: $288,925,408

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0159

IDV Type: IDC

Timeline