Department of the Army awards $95.7M for heavy tactical vehicles, including wreckers and trailers

Contract Overview

Contract Amount: $95,681,795 ($95.7M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2006-11-08

End Date: 2008-01-31

Contract Duration: 449 days

Daily Burn Rate: $213.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD OF 424 PLS TRAILERS, 97 M984A2 WRECKERS AND 151 M1120A2S.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54903

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $95.7 million to OSHKOSH CORP for work described as: AWARD OF 424 PLS TRAILERS, 97 M984A2 WRECKERS AND 151 M1120A2S. Key points: 1. The contract focuses on specialized heavy tactical vehicles, indicating a need for robust logistics and recovery capabilities. 2. Awarded as a sole-source contract, raising questions about potential cost efficiencies and market competition. 3. The duration of the contract (449 days) suggests a focused procurement for specific equipment needs. 4. The North American Industry Classification System (NAICS) code 336211 points to the motor vehicle body manufacturing sector. 5. The procurement is for the Department of the Army, highlighting its role in equipping ground forces. 6. The firm-fixed-price contract type aims to transfer risk to the contractor for cost overruns.

Value Assessment

Rating: fair

The award of $95.7 million for specialized vehicles like wreckers and trailers represents a significant investment in military logistics. Without direct comparable contracts or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. However, the sole-source nature of the award suggests that competitive pricing may not have been fully explored, potentially leading to a less favorable price than if multiple bidders had competed. Further analysis would require access to detailed cost data and comparisons with similar sole-source procurements for specialized military equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. This approach is typically used when there is a unique capability or urgency that precludes full and open competition. The lack of competition means that the government did not benefit from the price discovery mechanisms that arise from multiple bidders vying for the contract. This can sometimes lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price for these essential military vehicles. Oversight is crucial to ensure the price paid is fair and reasonable, even without competitive pressure.

Public Impact

The primary beneficiaries are the U.S. Army ground forces who will receive enhanced recovery and logistics capabilities through the new wreckers and trailers. The contract delivers critical heavy tactical vehicles essential for maintaining operational readiness and supporting combat or logistical missions. The geographic impact is national, as the vehicles will be deployed across various Army units and potentially overseas. Workforce implications may include manufacturing jobs within Oshkosh Corporation and its supply chain, particularly in Wisconsin where the company is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives or cost savings.
Firm-fixed-price contract, while shifting risk, could still result in a high price if the initial estimate was not competitive.

Positive Signals

Award to a known entity (Oshkosh Corp) suggests a reliance on established capabilities for specialized equipment.
Firm-fixed-price contract provides cost certainty for the government once awarded.
Procurement of essential heavy tactical vehicles supports critical military operational needs.

Sector Analysis

This contract falls within the Motor Vehicle Body Manufacturing sector, specifically focusing on heavy-duty, specialized vehicles for military applications. The market for such equipment is often characterized by a limited number of specialized manufacturers capable of meeting stringent military specifications. Spending in this area is driven by defense modernization efforts and the need to replace aging fleets with more capable platforms. Comparable spending benchmarks would typically involve other large-scale military vehicle procurements, often awarded through competitive processes or existing sole-source agreements for unique platforms.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. As a sole-source award to a large corporation (Oshkosh Corp), the direct impact on the small business ecosystem is likely minimal unless Oshkosh has a history of significant small business subcontracting on similar awards. Further investigation into Oshkosh's subcontracting plans would be needed to assess any indirect benefits.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver the specified goods at the agreed-upon price. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Tactical Wheeled Vehicles
Heavy Equipment Transporters
Military Logistics Support Vehicles
Army Vehicle Modernization Programs

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $95.7 million to OSHKOSH CORP. AWARD OF 424 PLS TRAILERS, 97 M984A2 WRECKERS AND 151 M1120A2S.

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 $95.7 million.

What is the period of performance?

Start: 2006-11-08. End: 2008-01-31.

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

Oshkosh Corporation has a long-standing and extensive track record with the Department of Defense, particularly in supplying tactical wheeled vehicles. They are a primary manufacturer for various heavy-duty military trucks, including Family of Heavy Tactical Vehicles (FHTV) variants, which encompass wreckers and cargo trucks similar to those procured in this award. Their history includes numerous large-scale contracts for vehicles like the PLS (Palletized Load System) and MTVR (Medium Tactical Vehicle Replacement). This extensive experience suggests a deep understanding of military requirements and a proven capability to produce these specialized vehicles, often under demanding conditions and specifications. Their established relationship and past performance are likely key factors in sole-source awards for specific vehicle platforms.

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

Determining the precise per-unit cost and comparing it to market rates or similar government contracts is challenging without access to the detailed pricing structure of this specific sole-source award. Sole-source procurements inherently lack the competitive benchmarking that occurs in open solicitations. While Oshkosh Corporation is a major supplier, the absence of multiple bids means the government did not benefit from price competition. To perform a robust comparison, one would need to analyze historical data for similar Oshkosh vehicles procured competitively, or benchmark against civilian heavy-duty wreckers and specialized trailers, adjusting for military-specific requirements (e.g., survivability, environmental hardening, specialized equipment). The total award of $95.7 million for 424 PLS trailers, 97 M984A2 wreckers, and 151 M1120A2s suggests an average cost per unit, but this aggregate figure doesn't reveal the individual pricing of each component type.

What are the primary risks associated with this sole-source award for the Department of the Army?

The primary risk associated with this sole-source award is the potential for paying a non-competitive price. Without the pressure of multiple bidders, there's a risk that the negotiated price may be higher than what could have been achieved through a competitive process. Another risk is the potential for contractor performance issues, although Oshkosh Corporation has a strong track record. If the contractor faces production delays or quality control problems, it could impact the Army's operational readiness. Furthermore, reliance on a single source for critical equipment can create long-term dependency and limit future flexibility in sourcing or technological upgrades if alternatives emerge.

What is the expected program effectiveness and impact of these heavy tactical vehicles on Army operations?

The expected program effectiveness of these heavy tactical vehicles—specifically the PLS trailers, M984A2 wreckers, and M1120A2s—is to significantly enhance the Army's logistical and recovery capabilities. The PLS trailers are designed for efficient transport of various mission-essential cargo, including ammunition, water, and fuel, directly supporting forward units. The M984A2 wreckers are crucial for recovering disabled vehicles, ensuring mobility is maintained even in challenging operational environments. The M1120A2s are heavy-duty cargo trucks capable of carrying substantial payloads. Together, these assets improve the Army's ability to sustain operations, maintain equipment readiness, and project power by ensuring that essential supplies reach the front lines and that vehicles are quickly returned to service.

How does this contract align with historical spending patterns for tactical vehicle procurement by the Department of the Army?

This contract aligns with historical spending patterns by the Department of the Army, which consistently invests substantial funds in tactical wheeled vehicles to maintain and modernize its fleet. The Army procures various classes of vehicles, from light tactical vehicles to heavy equipment transporters, to support diverse operational requirements. Procurements for specialized equipment like wreckers and heavy-lift trailers are recurring needs driven by the operational tempo and the lifecycle of existing equipment. While specific dollar amounts fluctuate based on modernization cycles and budget allocations, the general category of tactical vehicle procurement represents a significant and ongoing portion of the Army's equipment budget. This award, though sole-source, fits within the broader pattern of equipping ground forces with robust and reliable transportation and recovery assets.

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)

Contractor Details

Address: 2307 OREGON ST, OSHKOSH, WI, 06

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $95,681,795

Exercised Options: $95,681,795

Current Obligation: $95,681,795

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAE0701DS014

IDV Type: IDC

Timeline