DoD's $69.4M Oshkosh Corp contract for turbine generator sets shows limited competition and potential value concerns

Contract Overview

Contract Amount: $69,437,688 ($69.4M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2008-04-16

End Date: 2010-11-30

Contract Duration: 958 days

Daily Burn Rate: $72.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TRUCKS

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $69.4 million to OSHKOSH CORP for work described as: TRUCKS Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (958 days) suggests a significant, long-term need for these specialized units. 3. The fixed-price contract type aims to control costs, but the lack of competition may offset this benefit. 4. The specific product code (333611) indicates a focus on manufacturing turbine and generator set units. 5. The contract's value, while substantial, needs benchmarking against similar procurements to assess value for money. 6. The absence of small business set-aside flags raises questions about opportunities for smaller enterprises in this procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this $69.4 million contract is challenging without comparable sole-source procurements for similar turbine generator sets. The fixed-price nature suggests an attempt to control costs, but the lack of competition means there's no direct market comparison to assess if the pricing is competitive. Without multiple bids, it's difficult to determine if the government received the best possible value. Further analysis would require access to internal cost data or historical pricing for similar sole-source awards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Oshkosh Corp, was solicited. This approach bypasses the competitive bidding process, which typically leads to a wider range of proposals and potentially lower prices due to market pressures. The lack of competition here suggests either a unique capability held by Oshkosh Corp or a potential oversight in the procurement strategy that did not explore alternative sources.

Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the absence of competitive bidding. Without multiple offers, the government lacked the leverage to negotiate the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, which receives critical turbine generator set units. These units are essential for powering naval operations and supporting military readiness. The contract supports manufacturing jobs and the supply chain associated with Oshkosh Corp, likely concentrated in Wisconsin. The delivery of these units ensures the operational capability of naval assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess the necessity of this approach.
Long contract duration without clear performance metrics could pose risks if needs change or issues arise.
Absence of small business participation raises concerns about equitable distribution of federal contracting opportunities.

Positive Signals

Fixed-price contract type provides cost certainty once awarded, assuming the price was fair.
Oshkosh Corp is a known entity, potentially reducing risks associated with contractor performance.
The contract specifies a clear deliverable (turbine and turbine generator set units), indicating a defined need.

Sector Analysis

The manufacturing of turbine and turbine generator sets falls under the broader industrial manufacturing sector, with specific ties to defense industrial base production. This sector is characterized by high barriers to entry, specialized technology, and often long production cycles. The market size for such specialized defense components can be niche, with a limited number of qualified suppliers. This contract represents a significant investment within this specialized segment, likely supporting critical defense infrastructure.

Small Business Impact

The data indicates that this contract was not subject to small business set-aside provisions, nor does it appear to have included specific subcontracting goals for small businesses. This sole-source award to a large corporation like Oshkosh Corp means that opportunities for small businesses to participate directly or indirectly in this specific procurement were likely minimal. This could represent a missed opportunity to foster small business growth within the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight bodies. The Inspector General's office may conduct audits or investigations into the procurement process and contract performance, particularly given the sole-source nature. Transparency is limited by the lack of public competition details, but contract award data is generally available through federal procurement databases.

Related Government Programs

Turbine Manufacturing
Generator Set Procurement
Defense Industrial Base Contracts
Sole-Source Defense Awards
Naval Equipment Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.4 million to OSHKOSH CORP. TRUCKS

Who is the contractor on this award?

The obligated recipient is OSHKOSH CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $69.4 million.

What is the period of performance?

Start: 2008-04-16. End: 2010-11-30.

What is Oshkosh Corp's track record with similar sole-source defense contracts?

Oshkosh Corporation has a history of securing significant defense contracts, often through sole-source or limited competition avenues, particularly for specialized vehicles and equipment. While their track record generally indicates successful delivery, sole-source awards warrant scrutiny. Analyzing past sole-source contracts awarded to Oshkosh Corp for similar equipment would reveal patterns in pricing, delivery timelines, and any associated cost overruns or performance issues. This context is crucial for understanding the potential risks and value proposition of the current $69.4 million turbine generator set contract, as it helps determine if the government has historically received fair value under similar non-competitive circumstances.

How does the $69.4 million contract value compare to market rates for turbine generator sets?

Directly comparing the $69.4 million contract value to market rates for turbine generator sets is difficult without knowing the exact specifications, quantity, and technological sophistication of the units procured. However, as a sole-source award, it inherently lacks the price discovery mechanism of open competition. To benchmark value, one would need to identify comparable sole-source contracts for similar equipment awarded by the DoD or other agencies, or, ideally, obtain internal cost estimates or data from Oshkosh Corp if available. The absence of competitive bids means the government couldn't leverage market forces to ensure the lowest possible price, making a definitive value assessment challenging without further proprietary or comparative data.

What are the primary risks associated with this sole-source contract for turbine generator sets?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, Oshkosh Corp faced less pressure to offer the most cost-effective solution. Another risk is vendor lock-in; if these specific turbine generator sets are critical and unique, the government may be dependent on Oshkosh Corp for future support, maintenance, and replacements, potentially at non-competitive prices. Furthermore, if the contract duration is long and the technology is specialized, there's a risk of obsolescence or the emergence of superior, more cost-effective alternatives that cannot be easily integrated due to the sole-source nature of the initial procurement.

What is the historical spending pattern for turbine and turbine generator set units by the Department of the Navy?

Historical spending data for turbine and turbine generator set units by the Department of the Navy reveals a consistent, albeit often specialized, procurement need. While specific dollar figures fluctuate annually based on fleet readiness, modernization programs, and new platform acquisitions, the Navy frequently procures such equipment. Analysis of past contracts, including both competitive and sole-source awards, would show trends in average unit costs, contract durations, and the primary contractors involved. Understanding these patterns helps contextualize the $69.4 million award to Oshkosh Corp, indicating whether this represents a typical investment or an outlier in terms of scale or pricing for such equipment.

What specific operational capabilities do these turbine generator sets enable for the Department of the Navy?

Turbine generator sets are critical for providing reliable and substantial electrical power aboard naval vessels and at shore installations. For the Department of the Navy, these units likely support a range of essential functions, including powering propulsion systems (in some configurations), operating combat systems, maintaining life support, enabling communications, and running auxiliary equipment. The specific model procured from Oshkosh Corp would dictate its precise application, but generally, they ensure the operational readiness and mission effectiveness of naval platforms by providing the necessary electrical backbone. The $69.4 million investment underscores the high demand for dependable power generation in demanding maritime environments.

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

Financial Breakdown

Contract Ceiling: $70,997,299

Exercised Options: $70,997,299

Current Obligation: $69,437,688

Contract Characteristics

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: M6785404D5016

IDV Type: IDC

Timeline