Department of Defense awards $94.4M contract for 212 Oshkosh LVSR vehicles, impacting military logistics
Contract Overview
Contract Amount: $94,352,042 ($94.4M)
Contractor: Oshkosh Corp
Awarding Agency: Department of Defense
Start Date: 2012-02-03
End Date: 2013-10-31
Contract Duration: 636 days
Daily Burn Rate: $148.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PURCHASE OF 143 LVSR CARGO VARIANT VEHICLES, 69 LVSR TRACTOR VARIANT VEHICLES, AND ASSOCIATED FEDERAL RETAIL EXCISE TAX.
Place of Performance
Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902
Plain-Language Summary
Department of Defense obligated $94.4 million to OSHKOSH CORP for work described as: PURCHASE OF 143 LVSR CARGO VARIANT VEHICLES, 69 LVSR TRACTOR VARIANT VEHICLES, AND ASSOCIATED FEDERAL RETAIL EXCISE TAX. Key points: 1. Contract awarded for essential heavy-duty vehicles to support military operations. 2. Oshkosh Corporation, a known defense contractor, secured this significant award. 3. The contract involves a substantial number of vehicles, indicating a major logistical requirement. 4. Fixed-price contract type aims to control costs for the government. 5. Vehicles are designated for cargo and tractor variants, suggesting diverse operational roles. 6. Awarded by the Department of the Navy, supporting naval expeditionary combat command.
Value Assessment
Rating: good
The contract value of $94.4 million for 212 vehicles averages to approximately $445,000 per vehicle. This figure needs to be benchmarked against similar heavy-duty military vehicle procurements, considering variant types and included options. Given the specialized nature of LVSR vehicles, this price appears within a reasonable range for high-capacity, multi-purpose military trucks, though a detailed comparison with other similar contracts would provide a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This competitive process is designed to foster price discovery and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust bidding environment, which generally leads to more competitive pricing.
Taxpayer Impact: Full and open competition maximizes taxpayer value by encouraging multiple companies to offer their best prices, potentially leading to significant cost savings compared to sole-source or limited competition awards.
Public Impact
Military personnel and units requiring robust transport capabilities for equipment and personnel in various operational environments. Delivery of 143 LVSR Cargo Variant Vehicles and 69 LVSR Tractor Variant Vehicles to enhance logistical support. The geographic impact is primarily within military operational theaters where these vehicles will be deployed. Potential workforce implications for Oshkosh Corporation and its supply chain, supporting manufacturing and assembly jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen technical issues arise during production or deployment.
- Dependence on a single manufacturer, Oshkosh Corp, could limit future negotiation leverage.
- Logistical challenges associated with the delivery and maintenance of a large fleet of specialized vehicles.
Positive Signals
- Awarded under full and open competition, suggesting competitive pricing.
- Firm fixed-price contract type provides cost certainty for the government.
- Oshkosh Corporation has a proven track record in producing military vehicles.
- The vehicles are designed for demanding operational conditions, ensuring reliability.
Sector Analysis
This contract falls within the 'Automobile Manufacturing' sector, specifically focusing on heavy-duty military vehicles. The market for such specialized equipment is dominated by a few key defense contractors. The total addressable market for military logistics vehicles is substantial, driven by global defense spending and the need for modernization. This award represents a significant procurement within this niche, contributing to the overall revenue of the defense industrial base.
Small Business Impact
The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. While Oshkosh Corporation may utilize small business subcontractors, the primary awardee is a large corporation. Further analysis would be needed to determine the extent of small business subcontracting.
Oversight & Accountability
The contract is subject to standard Department of Defense oversight mechanisms, including contract administration by the Department of the Navy. The firm fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Heavy Tactical Wheeled Vehicles
- Logistics Support Vehicles
- Military Truck Procurement
- Department of Defense Vehicle Fleet Management
Risk Flags
- Potential for production delays impacting operational readiness.
- Dependence on a single manufacturer for critical heavy-lift vehicles.
- Ensuring long-term sustainment and parts availability.
- Verification of vehicle performance and survivability in diverse operational environments.
Tags
defense, department-of-defense, department-of-the-navy, oshkosh-corp, automobile-manufacturing, heavy-duty-vehicles, logistics, full-and-open-competition, firm-fixed-price, military-vehicles, cargo-variant, tractor-variant
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $94.4 million to OSHKOSH CORP. PURCHASE OF 143 LVSR CARGO VARIANT VEHICLES, 69 LVSR TRACTOR VARIANT VEHICLES, AND ASSOCIATED FEDERAL RETAIL EXCISE TAX.
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 $94.4 million.
What is the period of performance?
Start: 2012-02-03. End: 2013-10-31.
What is Oshkosh Corporation's track record with similar military vehicle contracts?
Oshkosh Corporation has a long-standing and extensive track record of supplying military vehicles to the U.S. Department of Defense and allied nations. They are well-known for producing a range of tactical wheeled vehicles, including the Family of Medium Tactical Vehicles (FMTV), the Joint Light Tactical Vehicle (JLTV), and various heavy equipment transporters. Their experience encompasses design, manufacturing, and sustainment of vehicles operating in challenging environments. The LVSR (Logistic Vehicle System Replacement) program itself is a continuation of Oshkosh's role in providing heavy-lift capabilities. This specific contract for LVSR variants builds upon their established expertise and existing production lines for these types of platforms, suggesting a lower risk profile in terms of manufacturing and delivery.
How does the per-vehicle cost of $445,000 compare to other heavy-duty military vehicle procurements?
The average per-vehicle cost of approximately $445,000 for the Oshkosh LVSR variants needs careful benchmarking. Heavy-duty military vehicles, especially those designed for extreme terrain, modularity, and survivability, command significantly higher prices than commercial trucks. For context, the JLTV (Joint Light Tactical Vehicle), a lighter but highly protected vehicle, has seen per-unit costs ranging from $200,000 to over $400,000 depending on the variant and contract. Larger, more specialized platforms like the LVSR, which are designed for heavy cargo and towing in austere conditions, can reasonably fall into the $400,000-$600,000+ range. Without specific details on the exact configuration of the cargo and tractor variants, and the inclusion of any support packages, a precise comparison is difficult. However, the $445,000 figure appears to be within the expected range for this class of military hardware.
What are the primary risks associated with this contract for the Department of Defense?
The primary risks for the Department of Defense (DoD) in this contract revolve around several key areas. Firstly, there's the risk of production delays, which can impact operational readiness if the vehicles are needed urgently. Secondly, while a firm fixed-price contract mitigates cost escalation, there's always a risk of performance issues or defects emerging post-delivery, requiring costly repairs or replacements. Thirdly, reliance on a single supplier, Oshkosh Corporation, for such critical assets creates a dependency that could affect long-term sustainment costs and availability of parts. Finally, the operational effectiveness of the LVSRs in diverse and potentially hostile environments carries inherent risks related to maintenance, training, and survivability, which are influenced by factors beyond the contract itself.
How effective are LVSR vehicles in supporting modern military logistics compared to previous generations?
The Logistic Vehicle System Replacement (LVSR) program was designed to replace the older M911/M1015 LVSI (Logistic Vehicle System) with a more capable and modern platform. Compared to its predecessor, the LVSR offers improved mobility, payload capacity, and survivability features, including enhanced armor options. Its modular design allows for various configurations (cargo, tractor, dump truck, wrecker), providing greater flexibility for different logistical tasks. In modern military logistics, which increasingly emphasizes rapid deployment, operational flexibility, and force protection, the LVSR's capabilities are considered essential for transporting heavy equipment, supplies, and personnel across challenging terrains, both in garrison and during expeditionary operations. Its effectiveness is tied to proper integration into the overall logistics chain and adequate maintenance support.
What has been the historical spending trend for Oshkosh Corporation's military vehicle contracts with the DoD?
Oshkosh Corporation has consistently been a major recipient of military vehicle contracts from the Department of Defense over many years. Their awards often span billions of dollars cumulatively, reflecting their significant role in supplying tactical and heavy-duty wheeled vehicles. Historical spending trends show a steady demand for their products, driven by military modernization programs, operational tempo, and the need to replace aging fleets. Major programs like the FMTV, JLTV, and LVSR have represented substantial portions of their defense revenue. While specific annual spending fluctuates based on program cycles and budget allocations, Oshkosh has maintained a strong and continuous presence as a key defense industrial base supplier for wheeled vehicles.
What is the significance of the Federal Retail Excise Tax (FREX) being included in this contract?
The inclusion of the 'associated Federal Retail Excise Tax' in the contract value indicates that the government is responsible for covering this specific tax liability related to the purchase of these vehicles. The Federal Excise Tax on heavy trucks (often referred to as the FET, though the specific mention here is FREX) is typically levied on the manufacturer or importer. For government procurements, the contract terms dictate who bears the burden of such taxes. By including it in the contract price, the Department of Defense is ensuring that the total cost of acquiring these vehicles accounts for this tax, simplifying the procurement process and providing a clear, all-inclusive price from the contractor's perspective. It means the government is directly funding this tax as part of the overall vehicle acquisition cost.
Industry Classification
NAICS: Manufacturing › Motor Vehicle Manufacturing › Automobile Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: M6785406R5028
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2307 OREGON ST, OSHKOSH, WI, 06
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $94,352,042
Exercised Options: $94,352,042
Current Obligation: $94,352,042
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6785406D5028
IDV Type: IDC
Timeline
Start Date: 2012-02-03
Current End Date: 2013-10-31
Potential End Date: 2013-10-31 00:00:00
Last Modified: 2013-10-01
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