Department of Defense awards $176M contract for wheeled combat vehicles to Oshkosh Corp

Contract Overview

Contract Amount: $175,977,212 ($176.0M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2006-03-28

End Date: 2010-09-30

Contract Duration: 1,647 days

Daily Burn Rate: $106.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200607!200145!1700!M67854!COMMANDING GENERAL !M6785404D5016 !A!N! !N!0026 ! !20060328!20080430!006070445!006070445!006070445!N!OSHKOSH TRUCK CORP !2307 OREGON ST !OSHKOSH !WI!54902!60500!139!55!OSHKOSH !WINNEBAGO !WISCONSIN !+000168741025!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4A!COMBAT VEHICLES !000 !NOT DISCERNABLE !336120!E! !5!C!S! ! !D!20070615!B! ! !A! !C!U!J!1!001!N!1B!A!W!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1727!M67854!0001! !

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $176.0 million to OSHKOSH CORP for work described as: 200607!200145!1700!M67854!COMMANDING GENERAL !M6785404D5016 !A!N! !N!0026 ! !20060328!20080430!006070445!006070445!006070445!N!OSHKOSH TRUCK CORP !2307 OREGON ST !OSHKOSH !WI!54902!60500!139!55!OSHKOSH !WINN… Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value. 2. The contract is for a significant quantity of wheeled combat vehicles, indicating a substantial defense need. 3. Oshkosh Corp. has a track record in supplying military vehicles, suggesting established capabilities. 4. The firm fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. The duration of the contract (over 4 years) suggests a long-term commitment to this vehicle platform. 6. Geographic impact is concentrated in Wisconsin, where Oshkosh is based.

Value Assessment

Rating: fair

The contract value of $175,977,212.37 for 1,068 units of wheeled combat vehicles appears high on a per-unit basis when compared to general truck manufacturing benchmarks. However, the specialized nature of combat vehicles, including advanced armor and systems, justifies a premium. Without specific details on the vehicle's capabilities and comparable military vehicle contracts, a definitive value assessment is challenging. The firm fixed-price structure suggests the government has negotiated a ceiling, but the absence of competition limits the ability to benchmark against market alternatives.

Cost Per Unit: Approximately $164,772 per unit. This figure is a rough estimate and does not account for potential variations in vehicle configurations or included support services. Direct comparison to commercial truck prices is not appropriate due to the specialized military nature of the equipment.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach is typically used when there is a lack of competition due to unique capabilities, urgent needs, or specific technical requirements that only one contractor can meet. The absence of multiple bidders means that the government did not benefit from competitive pricing, potentially leading to a higher cost than if multiple firms had vied for the contract.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price. Oversight is critical to ensure the negotiated price is fair and reasonable, given the lack of competitive pressure.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will operate these wheeled combat vehicles. The contract delivers critical tactical mobility and protection for ground forces. The geographic impact is primarily in Wisconsin, supporting Oshkosh Corporation's manufacturing operations and local employment. Workforce implications include skilled manufacturing jobs in engineering, assembly, and quality control at Oshkosh.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives.
Long contract duration without competitive re-evaluation may reduce incentives for cost efficiency over time.

Positive Signals

Oshkosh Corporation has a demonstrated history of producing military vehicles, indicating reliability and capability.
Firm fixed-price contract shifts performance and cost risk to the contractor.
The contract addresses a specific and critical need for advanced combat vehicles within the Defense Department.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of tactical wheeled vehicles. The market for military vehicles is characterized by high barriers to entry due to specialized technology, stringent testing requirements, and long procurement cycles. Spending in this area is driven by evolving military doctrine, threat assessments, and the need to modernize aging fleets. Comparable spending benchmarks would involve other large-scale military vehicle procurement contracts, often awarded through competitive bidding processes.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans within the provided data. As a sole-source award to a large corporation, the direct impact on small businesses is likely minimal unless Oshkosh Corporation voluntarily engages them for subcontracting opportunities. Further investigation into subcontracting plans would be necessary to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature of the award; however, contract modifications and performance reports would be subject to internal DoD review and potentially Inspector General oversight.

Related Government Programs

Family of Medium Tactical Vehicles (FMTV)
Joint Light Tactical Vehicle (JLTV)
Heavy Expanded Mobility Tactical Truck (HEMTT)

Risk Flags

Sole-source award
Lack of competitive bidding
High per-unit cost potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $176.0 million to OSHKOSH CORP. 200607!200145!1700!M67854!COMMANDING GENERAL !M6785404D5016 !A!N! !N!0026 ! !20060328!20080430!006070445!006070445!006070445!N!OSHKOSH TRUCK CORP !2307 OREGON ST !OSHKOSH !WI!54902!60500!139!55!OSHKOSH !WINNEBAGO !WISCONSIN !+000168741025!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4A!COMBAT VEHICLES !000 !NOT DISCERNABLE !336120!E! !5!C!S! ! !D!200

Who is the contractor on this award?

The obligated recipient is OSHKOSH CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $176.0 million.

What is the period of performance?

Start: 2006-03-28. End: 2010-09-30.

What specific type of wheeled combat vehicle is being procured under this contract, and what are its key capabilities?

The contract specifies 'TRUCKS AND TRUCK TRACTORS, WHEELED' under PSC 2320, with a specific application noted as 'COMBAT VEHICLES'. While the exact model or designation is not explicitly stated in the abbreviated data, the context of 'COMBAT VEHICLES' implies a platform designed for high-threat environments. These vehicles typically feature enhanced armor protection, advanced communication and navigation systems, and potentially weapon mounts. They are crucial for troop transport, logistics, and direct fire support in combat zones. The specific capabilities would dictate its role, such as infantry carrier, reconnaissance, or command and control.

What is Oshkosh Corporation's track record with the Department of Defense, particularly in supplying similar wheeled vehicles?

Oshkosh Corporation has a long and established history of supplying tactical wheeled vehicles to the U.S. military. They are well-known for producing the Family of Medium Tactical Vehicles (FMTV) and the Heavy Expanded Mobility Tactical Truck (HEMTT), both of which are critical components of the Army's logistics and operational fleet. Oshkosh was also a key player in the development and production of the Joint Light Tactical Vehicle (JLTV), designed to replace many HMMWVs. Their extensive experience in designing, manufacturing, and supporting these complex military platforms suggests a strong capability and understanding of DoD requirements.

Given the sole-source nature, how was the 'fair and reasonableness' of the price determined?

For sole-source contracts, the determination of price fairness and reasonableness is a critical step. The contracting agency, in this case, likely the Department of the Army, would have conducted a thorough price analysis. This typically involves reviewing the contractor's cost proposals, including direct costs, indirect costs, and profit. They would compare these proposed costs against historical pricing for similar items, independent government cost estimates, and potentially data from other commercial or government sources if available. Techniques like cost realism analysis and should-cost analysis might be employed. The absence of competition means the government relies heavily on its own analytical capabilities and negotiation skills to ensure the price is justified.

What are the potential risks associated with a sole-source award for such a significant defense procurement?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, there is less incentive for the contractor to offer the lowest possible price. Another risk is that the government may not be aware of alternative solutions or technological advancements that other companies might offer. Furthermore, sole-source awards can sometimes lead to perceptions of favoritism or a lack of transparency, potentially impacting public trust. Ensuring robust oversight and justification for the sole-source determination is crucial to mitigate these risks.

How does this contract fit into the broader context of U.S. military vehicle modernization efforts?

This contract for wheeled combat vehicles likely represents a component of the U.S. military's ongoing efforts to modernize its tactical vehicle fleet. As older vehicles reach the end of their service life or become obsolete, the military procures new platforms that offer improved protection, mobility, and technological capabilities. The specific type of vehicle procured will indicate its role in this modernization strategy, whether it's replacing legacy systems, filling new operational niches, or enhancing overall force projection capabilities. Such procurements are often driven by evolving threat assessments and changes in military doctrine.

What is the historical spending trend for similar wheeled combat vehicles by the Department of Defense?

Historical spending on wheeled combat vehicles by the Department of Defense has been substantial and cyclical, often tied to major conflicts, force structure changes, and modernization programs. For instance, significant investments were made in the early 2000s for vehicles like the MRAP (Mine-Resistant Ambush Protected) due to the demands of operations in Iraq and Afghanistan. The procurement of platforms like the FMTVs and JLTVs also represents significant, multi-year spending commitments. While specific figures fluctuate annually based on budget allocations and program priorities, the DoD consistently allocates billions of dollars towards maintaining and modernizing its vast fleet of tactical and combat vehicles.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units 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

Address: 2307OREGON STREET, OSHKOSH, WI, 06

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: M6785404D5016

IDV Type: IDC

Timeline