Department of the Army awards $615M for 1,882 heavy tactical vehicles to Oshkosh Defense LLC

Contract Overview

Contract Amount: $615,469,316 ($615.5M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2012-12-21

End Date: 2015-09-30

Contract Duration: 1,013 days

Daily Burn Rate: $607.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER 0086 IS FOR THE PROCUREMENT OF 11 DIFFERENT HEAVY EXPANDED MOBILITY TACTICAL TRUCK (HEMTT), PALLETIZED LOAD SYSTEM (PLS), AND HEAVY EQUIPMENT TRANSPORTER (HET) VEHICLE VARIANTS TOTALING 1,882 VEHICLES ORDERED.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902, UNITED STATES OF AMERICA

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $615.5 million to OSHKOSH DEFENSE LLC for work described as: DELIVERY ORDER 0086 IS FOR THE PROCUREMENT OF 11 DIFFERENT HEAVY EXPANDED MOBILITY TACTICAL TRUCK (HEMTT), PALLETIZED LOAD SYSTEM (PLS), AND HEAVY EQUIPMENT TRANSPORTER (HET) VEHICLE VARIANTS TOTALING 1,882 VEHICLES ORDERED. Key points: 1. The contract represents a significant investment in tactical vehicle fleet modernization. 2. Oshkosh Defense LLC, a sole-source provider for these specific variants, holds a dominant position. 3. The firm-fixed-price contract structure aims to control costs, but the lack of competition is a key risk indicator. 4. Delivery orders under this contract span multiple years, indicating a sustained need for these vehicles. 5. The procurement supports the Army's operational readiness and logistical capabilities. 6. The absence of a competitive bidding process raises questions about optimal value for taxpayer funds.

Value Assessment

Rating: fair

Benchmarking the value for this contract is challenging due to its sole-source nature and the specific nature of the heavy tactical vehicles procured. While Oshkosh Defense LLC is a recognized provider, the lack of competitive bids means there's no direct market comparison to assess if the pricing is optimal. The firm-fixed-price contract type provides cost certainty for the government, but the overall value proposition hinges on the necessity and utility of the vehicles acquired at the awarded price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Oshkosh Defense LLC, was solicited. This approach is typically used when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for these vehicles, as there was no incentive for multiple vendors to bid and drive down costs.

Public Impact

The primary beneficiaries are the U.S. Army units receiving enhanced mobility and logistical support through the new vehicles. The contract delivers 1,882 heavy expanded mobility tactical trucks (HEMTT), palletized load systems (PLS), and heavy equipment transporters (HET). The geographic impact is national, supporting Army operations across various installations and potential deployment zones. This procurement sustains 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

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long-term reliance on a single supplier could create vendor lock-in and reduce future negotiation leverage.
The sheer volume of vehicles procured suggests a significant, ongoing need that may be susceptible to future budget fluctuations.

Positive Signals

Oshkosh Defense LLC is a specialized manufacturer with proven experience in producing these specific heavy tactical vehicle variants.
The firm-fixed-price contract provides cost predictability for the Department of the Army.
The procurement addresses a critical need for modern, capable tactical vehicles to support military operations.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by high barriers to entry, specialized production capabilities, and significant government investment. Oshkosh Defense LLC operates within this niche, providing highly specialized and robust vehicles essential for military logistics and operations. The market for such heavy tactical vehicles is limited, with a few key players dominating. This contract represents a substantial portion of spending within this specific sub-sector, reflecting the Army's ongoing commitment to fleet modernization and operational readiness.

Small Business Impact

This contract does not appear to include specific small business set-asides, nor is Oshkosh Defense LLC identified as a small business. The large scale of this procurement suggests that subcontracting opportunities may exist for small businesses within Oshkosh Defense's supply chain. However, the primary awardee is a large defense contractor, and the direct impact on the small business ecosystem through set-asides is not evident from the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and the Department of Defense's Inspector General. Mechanisms include contract performance reviews, audits, and compliance checks to ensure delivery of vehicles meets specifications and terms. Transparency is facilitated through contract databases like FPDS, though detailed operational performance data may be considered sensitive.

Related Government Programs

Tactical Wheeled Vehicles
Heavy Expanded Mobility Tactical Truck (HEMTT)
Palletized Load System (PLS)
Heavy Equipment Transporter (HET)
Department of the Army Vehicle Procurement
Defense Logistics Agency

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns due to non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $615.5 million to OSHKOSH DEFENSE LLC. DELIVERY ORDER 0086 IS FOR THE PROCUREMENT OF 11 DIFFERENT HEAVY EXPANDED MOBILITY TACTICAL TRUCK (HEMTT), PALLETIZED LOAD SYSTEM (PLS), AND HEAVY EQUIPMENT TRANSPORTER (HET) VEHICLE VARIANTS TOTALING 1,882 VEHICLES ORDERED.

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 $615.5 million.

What is the period of performance?

Start: 2012-12-21. End: 2015-09-30.

What is Oshkosh Defense LLC's track record with similar heavy tactical vehicle contracts for the Department of the Army?

Oshkosh Defense LLC has a long-standing and extensive track record of supplying heavy tactical vehicles to the U.S. military, including the Department of the Army. They are the primary manufacturer for the HEMTT, PLS, and HET families of vehicles, which are critical components of the Army's logistics fleet. This specific contract, Delivery Order 0086, is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, indicating a sustained relationship and proven performance history. Their ability to consistently deliver these complex and specialized vehicles, often under challenging operational conditions, has made them a key partner for the Army's vehicle modernization and sustainment efforts. Past performance reviews and contract awards consistently highlight their role as a sole-source provider for these specific vehicle variants.

How does the per-unit cost of these vehicles compare to market rates or similar contracts?

Determining a precise per-unit cost comparison is difficult without access to detailed pricing breakdowns and specific contract line item numbers (CLINs) for each vehicle variant. Furthermore, the sole-source nature of this award means there is no direct competitive benchmark. However, historical data and industry analysis suggest that specialized, heavy-duty military vehicles like the HEMTT, PLS, and HET are inherently expensive due to their robust design, advanced capabilities, and low-volume production runs compared to commercial trucks. The average cost per vehicle in this $615 million award, spread across 1,882 units, is approximately $327,000. This figure should be evaluated against the specific capabilities and survivability features required for military applications, which significantly drive up costs compared to standard commercial equivalents. Without competitive bids, it's challenging to ascertain if this represents optimal value.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the lack of price competition, which can lead to inflated costs for the government and taxpayers. Without competing bids, there is less incentive for the contractor to offer the lowest possible price. Another significant risk is vendor lock-in; the Department of the Army becomes heavily reliant on Oshkosh Defense LLC for these specific vehicle platforms. This reliance can reduce future negotiation leverage and make it difficult to switch suppliers or adopt alternative solutions if needed. Furthermore, sole-source contracts can sometimes indicate a lack of market research or an inability to define requirements in a way that would encourage broader competition, potentially missing out on innovative solutions or cost efficiencies from other potential vendors.

How effective is this procurement in meeting the Department of the Army's stated needs for tactical mobility?

This procurement is likely highly effective in meeting the Department of the Army's stated needs for tactical mobility, given that Oshkosh Defense LLC is the sole-source provider for these specific, critical vehicle variants (HEMTT, PLS, HET). These vehicles are designed for demanding operational environments and provide essential logistical support, cargo transport, and equipment movement capabilities. By acquiring 1,882 units, the Army is significantly enhancing its fleet's capacity and modernity, directly addressing requirements for operational readiness and sustainment. The firm-fixed-price contract structure also ensures cost certainty for the acquisition, contributing to the predictability of program execution. The effectiveness is measured by the delivery of these specialized assets that are purpose-built for military missions.

What are the historical spending patterns for similar heavy tactical vehicles within the Department of the Army?

Historical spending patterns for similar heavy tactical vehicles within the Department of the Army show a consistent and substantial investment in fleet modernization and sustainment. The Army has historically relied on Oshkosh Defense LLC for its HEMTT, PLS, and HET platforms through various contract vehicles, including IDIQs, over many years. Spending in this category typically runs into hundreds of millions, and sometimes billions, of dollars over multi-year periods, reflecting the high cost of these specialized vehicles and the large quantities required to equip the force. Fluctuations in spending often correlate with major modernization initiatives, operational tempo, and budget allocations. This $615 million award is consistent with previous large-scale procurements of these vehicle types, indicating a sustained commitment rather than a significant deviation from historical investment levels in this critical capability.

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: $615,469,316

Exercised Options: $615,469,316

Current Obligation: $615,469,316

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV09D0024

IDV Type: IDC

Timeline