Department of the Army awards $445M for HETA1 production truck tractors to Oshkosh Defense LLC

Contract Overview

Contract Amount: $445,376,241 ($445.4M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-24

End Date: 2013-12-30

Contract Duration: 1,193 days

Daily Burn Rate: $373.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR THE FUNDING OF HETA1 PRODUCTION TRUCK TRACTORS.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $445.4 million to OSHKOSH DEFENSE LLC for work described as: DELIVERY ORDER FOR THE FUNDING OF HETA1 PRODUCTION TRUCK TRACTORS. Key points: 1. The contract value represents a significant investment in tactical vehicle production. 2. Oshkosh Defense LLC is a key supplier for military vehicle platforms. 3. The firm fixed-price contract type suggests a defined scope and cost structure. 4. The delivery order was issued under a larger indefinite-delivery/indefinite-quantity contract. 5. The duration of the order spans over three years, indicating a sustained production need. 6. The contract is for truck trailer manufacturing, a critical component of logistics support.

Value Assessment

Rating: good

The total award of over $445 million for HETA1 production truck tractors indicates a substantial commitment. While specific per-unit costs are not detailed here, the firm fixed-price nature of the contract suggests that the pricing was established upfront. Benchmarking this against similar large-scale tactical vehicle procurements would be necessary for a definitive value-for-money assessment. However, given the specialized nature of military hardware and the sole-source award, the pricing is likely influenced by unique design, manufacturing, and testing requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed among multiple vendors. This approach is often used when a specific contractor possesses unique capabilities, intellectual property, or has already been established as the prime vendor for a particular system. The lack of competition means that price discovery through market forces was limited, and the government relied on negotiation and existing contract vehicles to establish terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers compared to competed contracts, as the benefits of competitive bidding are absent. However, in cases where a specific system requires a single, specialized provider, it can ensure continuity and compatibility.

Public Impact

The primary beneficiaries are the U.S. Army, receiving essential logistics and transport capabilities. The contract delivers HETA1 production truck tractors, crucial for military operations and supply chain management. The geographic impact is primarily within the United States, where production and delivery will occur. The contract supports jobs within Oshkosh Defense LLC and its supply chain, contributing to the defense manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may limit cost savings for taxpayers.
Sole-source nature requires careful oversight to ensure fair pricing.
Dependence on a single supplier could pose long-term supply chain risks.

Positive Signals

Oshkosh Defense LLC has a proven track record in producing military vehicles.
Firm fixed-price contract provides cost certainty for the government.
The award supports critical military logistics capabilities.

Sector Analysis

The defense manufacturing sector, particularly tactical vehicle production, is characterized by high barriers to entry, significant R&D investment, and long-term government contracts. Oshkosh Defense LLC is a major player in this space, known for its specialized wheeled military vehicles. The market is often dominated by a few large prime contractors who manage complex supply chains. This contract fits within the broader category of defense logistics and mobility systems, a critical area for military readiness.

Small Business Impact

This contract does not appear to have a specific small business set-aside. As a sole-source award to a large prime contractor, the primary subcontracting opportunities would likely flow through Oshkosh Defense LLC. The extent to which small businesses will be involved depends on Oshkosh's subcontracting strategy and the availability of specialized components or services within the small business industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a delivery order under a larger IDIQ, the initial contract vehicle likely underwent significant review. Transparency is facilitated through contract award databases, but detailed cost breakdowns and performance metrics may be less publicly available due to the sensitive nature of defense procurements. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Tactical Wheeled Vehicles
Logistics Support Vehicles
Heavy Equipment Transport
Military Truck Production
Department of the Army Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $445.4 million to OSHKOSH DEFENSE LLC. DELIVERY ORDER FOR THE FUNDING OF HETA1 PRODUCTION TRUCK TRACTORS.

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 $445.4 million.

What is the period of performance?

Start: 2010-09-24. End: 2013-12-30.

What is Oshkosh Defense LLC's track record with the Department of Defense for similar vehicle procurements?

Oshkosh Defense LLC has a substantial and well-documented track record with the Department of Defense, particularly in the production of tactical wheeled vehicles. They are the manufacturer of the Family of Medium Tactical Vehicles (FMTV) and the Joint Light Tactical Vehicle (JLTV), among other platforms. Their experience includes delivering large quantities of vehicles under complex, multi-year contracts, often involving significant engineering, testing, and logistical support. This extensive history suggests a deep understanding of military requirements and production capabilities, which likely influenced the sole-source decision for the HETA1 production truck tractors.

How does the $445 million award compare to historical spending on HETA1 or similar truck tractor programs?

Without specific historical data on the HETA1 program or directly comparable truck tractor procurements by the Army, a precise comparison is challenging. However, the $445 million figure indicates a significant investment in a specialized military asset. Large-scale production runs of tactical vehicles can easily reach hundreds of millions of dollars, especially when factoring in research, development, testing, and sustainment. The duration of the delivery order (over three years) suggests a substantial quantity or a phased production approach, which aligns with the scale of the award. Further analysis would require access to historical procurement data for similar vehicle classes.

What are the primary risks associated with a sole-source award for military vehicle production?

The primary risks associated with a sole-source award for military vehicle production include potential for higher costs due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency beyond contractual requirements, and a potential over-reliance on a single supplier. This can create vulnerabilities in the supply chain if the sole provider faces production issues or goes out of business. For taxpayers, the risk is that they may not be receiving the best possible value for their investment compared to what could have been achieved through a competitive bidding process.

How effective is the HETA1 truck tractor program in meeting the Army's logistical needs?

The effectiveness of the HETA1 truck tractor program in meeting the Army's logistical needs is directly tied to its performance in delivering the specified capabilities. As a production contract, the focus is on manufacturing and delivering the vehicles as designed. The HETA1 is intended to provide heavy-duty transport capabilities, crucial for moving equipment, supplies, and personnel in various operational environments. Its effectiveness is measured by its reliability, payload capacity, mobility, and survivability in theater. The sustained award and duration suggest that the program is considered essential for current and future logistical requirements, though specific performance metrics in operational use would provide a more complete picture.

What are the historical spending patterns for truck trailer manufacturing (NAICS 336212) by the Department of Defense?

Historical spending patterns for truck trailer manufacturing (NAICS 336212) by the Department of Defense can be substantial, reflecting the military's need for robust logistics and transport capabilities. While specific figures fluctuate annually based on operational demands and modernization efforts, the DoD consistently procures a wide range of trailers, from standard cargo trailers to specialized units for equipment transport and mobile command centers. The $445 million award for HETA1 production truck tractors represents a significant portion of this category for a single contract, highlighting the importance of these heavy-duty vehicles within the DoD's overall equipment inventory and procurement strategy.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer 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

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: $445,376,241

Exercised Options: $445,376,241

Current Obligation: $445,376,241

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0024

IDV Type: IDC

Timeline