Department of the Army awards $220.8M contract for trucks and truck tractors to Oshkosh Corp

Contract Overview

Contract Amount: $220,856,935 ($220.9M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2006-03-27

End Date: 2007-10-31

Contract Duration: 583 days

Daily Burn Rate: $378.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!004054!2100!W56HZV!TACOM - WARREN !DAAE0701DS014 !A!N! !N!0200 ! !20060327!20060331!006070445!006070445!006070445!N!OSHKOSH TRUCK CORP !2307 OREGON ST !OSHKOSH !WI!54902!60500!139!55!OSHKOSH !WINNEBAGO !WISCONSIN !+000200508697!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !000 !NOT DISCERNABLE !336211!E! !5!A!S! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1G!A!N!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $220.9 million to OSHKOSH CORP for work described as: 200608!004054!2100!W56HZV!TACOM - WARREN !DAAE0701DS014 !A!N! !N!0200 ! !20060327!20060331!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 non-competitive basis, raising questions about price discovery and potential value. 2. The contract's duration of 583 days suggests a need for sustained supply of specialized vehicles. 3. Oshkosh Truck Corp. is a significant player in the defense vehicle manufacturing sector. 4. The North American Industry Classification System (NAICS) code 336211 points to motor vehicle body manufacturing. 5. The contract's value is substantial, indicating a significant investment in military logistics capabilities. 6. The firm fixed-price contract type aims to transfer cost risk to the contractor.

Value Assessment

Rating: questionable

The contract value of $220.8 million for trucks and truck tractors is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. The non-competitive award mechanism, however, inherently limits the opportunity for price competition, which could lead to less favorable pricing for the government compared to an open market scenario. Benchmarking this price against similar, competitively awarded contracts for specialized military vehicles would be crucial for a thorough value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not competed. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from multiple bidders vying for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the requirement, there is less assurance that the government secured the best possible price and terms.

Public Impact

The primary beneficiaries are the U.S. Army, which receives essential logistical support vehicles. The contract delivers specialized trucks and truck tractors critical for military operations and supply chain management. The geographic impact is primarily within Wisconsin, where Oshkosh Truck Corp. is headquartered and likely performs much of the work. The contract supports jobs within the defense manufacturing sector, particularly at Oshkosh and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Limited transparency into the justification for sole-source award.
Potential for contractor to leverage sole-source status for less favorable terms.

Positive Signals

Oshkosh Truck Corp. is an established manufacturer with a track record in defense contracting.
Firm fixed-price contract type provides cost certainty for the government.
Contract duration suggests a long-term need, potentially indicating strategic planning.

Sector Analysis

The defense vehicle manufacturing sector is characterized by high barriers to entry, specialized technology, and significant government procurement. Companies like Oshkosh Truck Corp. are key suppliers to military branches, providing essential platforms for logistics, transport, and combat support. Spending in this sector is often driven by modernization efforts, operational readiness requirements, and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale procurements of tactical and logistical vehicles by the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component. As a sole-source award to a large corporation, there are no explicit subcontracting opportunities mandated for small businesses within the contract terms provided. The impact on the small business ecosystem is therefore indirect, relying on Oshkosh's own procurement practices for its supply chain.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the delivery of vehicles according to the firm fixed-price terms and specifications. Transparency is limited due to the sole-source nature of the award, with detailed justifications typically not made public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Wheeled Vehicles
Military Logistics Support
Heavy Equipment Procurement
Defense Industrial Base

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $220.9 million to OSHKOSH CORP. 200608!004054!2100!W56HZV!TACOM - WARREN !DAAE0701DS014 !A!N! !N!0200 ! !20060327!20060331!006070445!006070445!006070445!N!OSHKOSH TRUCK CORP !2307 OREGON ST !OSHKOSH !WI!54902!60500!139!55!OSHKOSH !WINNEBAGO !WISCONSIN !+000200508697!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !000 !NOT DISCERNABLE !336211!E! !5!A!S! ! ! !999

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 Army).

What is the total obligated amount?

The obligated amount is $220.9 million.

What is the period of performance?

Start: 2006-03-27. End: 2007-10-31.

What is Oshkosh Truck Corp.'s track record with the Department of the Army for similar vehicle procurements?

Oshkosh Truck Corp. has a long-standing relationship with the Department of the Army, notably as the manufacturer of the Family of Medium Tactical Vehicles ( FMTV) and the Joint Light Tactical Vehicle (JLTV). Their history includes significant contract awards for various truck platforms and related support services. This extensive experience suggests a deep understanding of military requirements and operational environments. However, past performance can vary, and a detailed review of specific contract histories, including any past issues with delivery, quality, or cost overruns, would be necessary for a comprehensive assessment. The current contract's sole-source nature might stem from unique capabilities or existing platform integration that Oshkosh possesses, building upon this established track record.

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

Determining the precise per-unit cost and comparing it to market rates or similar competitively awarded contracts is challenging with the provided data. The total award is $220.8 million over 583 days (approximately 1.6 years), with 139 units mentioned in the raw data (though this number might be a placeholder or specific to a sub-line item). If we assume 139 units, the average per-unit cost would be extremely high, suggesting these are highly specialized, perhaps armored or mission-specific, vehicles rather than standard commercial trucks. Without knowing the exact specifications, quantity, and the specific justification for the sole-source award, a direct comparison is speculative. Competitively awarded contracts for similar, albeit potentially less specialized, military trucks often show a wide range of per-unit costs, heavily influenced by quantity, features, and technological sophistication. The lack of competition here prevents a definitive value-for-money assessment based on price benchmarking.

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

The primary risk associated with this sole-source contract award is the potential for inflated pricing due to the absence of competition. When a contract is not competed, the government loses the leverage that multiple bidders provide to drive down costs and improve terms. This can lead to the contractor charging more than they might under a competitive scenario. Another risk is reduced innovation; without the pressure of competing, the contractor may have less incentive to develop more cost-effective or technologically advanced solutions. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single supplier, which can create vulnerabilities in the supply chain if that supplier faces production issues or business disruptions. Transparency is also a concern, as the justification for not competing may not always be fully transparent to the public or even all stakeholders within the government.

How effective is the firm fixed-price contract type in managing costs for this specific procurement?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for procurements where the scope of work is well-defined and the risks of cost overruns can be reasonably estimated. Under an FFP contract, the contractor assumes the primary responsibility for all costs incurred and is only entitled to the agreed-upon price. This incentivizes the contractor to control costs efficiently to maximize their profit margin. For a procurement of specialized vehicles like trucks and truck tractors, where specifications are likely detailed, FFP can provide significant cost certainty to the government. However, the effectiveness is contingent on the accuracy of the initial cost estimates and the contractor's ability to manage their own expenses. If unforeseen issues arise that were not reasonably foreseeable during contract negotiation, the FFP structure can sometimes lead to contractor claims for equitable adjustments, though this is generally more difficult than under cost-reimbursement contracts.

What are the historical spending patterns for trucks and truck tractors by the Department of the Army?

Historical spending patterns for trucks and truck tractors by the Department of the Army are substantial and cyclical, reflecting the military's continuous need for logistical support and vehicle modernization. The Army procures a wide array of wheeled vehicles, from light tactical vehicles to heavy-duty transport trucks and specialized engineering equipment. Spending is often influenced by operational tempo, deployment requirements, and the lifecycle of existing fleets. Major programs, such as the FMTV and JLTV, represent significant portions of this spending over extended periods. Procurement often involves multi-year contracts to achieve economies of scale and ensure supply chain stability. Analysis of historical data would likely show significant annual expenditures, with peaks corresponding to major fleet recapitalization efforts or wartime operational demands. The specific category 'Trucks and Truck Tractors, Wheeled' (PSC 2320) encompasses a broad range of vehicles, making precise historical comparisons dependent on the specific sub-types procured.

What is the significance of the NAICS code 336211 (Motor Vehicle Body Manufacturing) in the context of this contract?

The North American Industry Classification System (NAICS) code 336211, 'Motor Vehicle Body Manufacturing,' indicates that the primary activity associated with this contract involves the production or assembly of the bodies for trucks and truck tractors. This code falls under the broader 'Manufacturing' sector. For this specific Department of the Army contract, it signifies that the awarded company, Oshkosh Truck Corp., is engaged in the fabrication and integration of the vehicle chassis and body, which are critical components of the final product. This classification helps in understanding the industrial sector the contract supports and allows for comparisons with other government contracts or industry data within the same sector. It suggests the contract is focused on the physical manufacturing of the vehicle structure, rather than solely on the procurement of complete, off-the-shelf vehicles, or specialized components like engines or transmissions, although these would be integrated.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Motor Vehicle Body 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: 2307 OREGON ST, OSHKOSH, WI, 06

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAE0701DS014

IDV Type: IDC

Timeline