Navy awards Oshkosh Defense $50.8M for ship interdiction systems, focusing on initial production

Contract Overview

Contract Amount: $50,861,880 ($50.9M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2024-04-23

End Date: 2026-12-31

Contract Duration: 982 days

Daily Burn Rate: $51.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVY MARINE SHIP INTERDICTION SYSTEM - CARRIER - LOW RATE INITIAL PRODUCTION

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $50.9 million to OSHKOSH DEFENSE LLC for work described as: NAVY MARINE SHIP INTERDICTION SYSTEM - CARRIER - LOW RATE INITIAL PRODUCTION Key points: 1. Contract value represents initial production phase, suggesting potential for future growth. 2. Sole awardee indicates specific capabilities required, warranting scrutiny of competition alternatives. 3. Fixed-price contract type shifts risk to contractor, potentially impacting cost overruns. 4. Long performance period suggests a complex, multi-year integration and delivery process. 5. Focus on carrier-based systems highlights a niche but critical defense application. 6. Geographic location in Wisconsin may indicate specific manufacturing or integration hubs.

Value Assessment

Rating: good

The contract value of $50.8 million for initial production appears reasonable for specialized defense equipment. Benchmarking against similar low-rate initial production (LRIP) contracts for complex vehicle systems would provide a clearer picture of value for money. The firm fixed-price structure suggests the government has negotiated a ceiling price, but ongoing monitoring of performance and potential change orders will be crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The data does not specify the number of bids received, which is a key factor in assessing the strength of the competition. A robust competitive process typically leads to better pricing and innovation for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to offer their best prices and solutions, driving down costs.

Public Impact

The U.S. Navy's carrier strike groups will benefit from enhanced interdiction capabilities. This contract supports the production of specialized vehicles designed for maritime interdiction operations. The primary geographic impact is likely centered around Oshkosh, Wisconsin, where the contractor is based. The contract supports jobs in heavy-duty truck manufacturing and defense systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bid count from full and open competition limits assessment of competitive intensity.
Potential for scope creep or change orders in a long-duration LRIP contract.
Dependence on a single contractor for this specific system could pose future supply chain risks.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award under full and open competition suggests a market capable of meeting the requirement.
Initial production award indicates successful development and testing phases prior to this award.

Sector Analysis

This contract falls within the heavy-duty truck manufacturing sector, specifically for specialized defense applications. The market for such systems is relatively niche, driven by defense procurement budgets. Comparable spending might be found in contracts for other tactical wheeled vehicles or specialized military support equipment. The total addressable market is influenced by global defense spending trends and specific naval modernization programs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses for components or specialized services.

Oversight & Accountability

Oversight will likely be managed by the Department of the Navy's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of cost control. Transparency regarding performance metrics and delivery schedules will be key. Inspector General involvement would typically occur in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Surface Warfare
Tactical Wheeled Vehicles
Defense Logistics
Military Vehicle Production
Shipborne Systems

Risk Flags

Potential for cost overruns despite fixed-price contract if scope changes.
Supply chain vulnerability for specialized components.
Dependence on a single source for critical system production.
Limited transparency on number of bidders in full and open competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.9 million to OSHKOSH DEFENSE LLC. NAVY MARINE SHIP INTERDICTION SYSTEM - CARRIER - LOW RATE INITIAL PRODUCTION

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 Navy).

What is the total obligated amount?

The obligated amount is $50.9 million.

What is the period of performance?

Start: 2024-04-23. End: 2026-12-31.

What is the track record of Oshkosh Defense LLC in delivering similar complex defense systems on time and within budget?

Oshkosh Defense LLC has a significant track record in producing heavy tactical wheeled vehicles for the U.S. military, including the Joint Light Tactical Vehicle (JLTV) and the Family of Heavy Tactical Vehicles (FHTV). They have experience with large-scale production contracts and have demonstrated capabilities in meeting demanding military specifications. However, like many large defense contractors, they have faced scrutiny regarding delivery schedules and cost adjustments on major programs. A detailed review of their past performance on similar LRIP contracts, specifically focusing on adherence to schedule and budget, would be necessary to fully assess their reliability for this specific interdiction system.

How does the awarded price compare to industry benchmarks for similar specialized vehicle production contracts?

Directly comparing the $50.8 million award for the Navy Marine Ship Interdiction System to industry benchmarks is challenging without more specific details on the system's complexity, quantity, and technological sophistication. However, initial production contracts (LRIP) for specialized military vehicles often carry higher per-unit costs than full-rate production due to setup, tooling, and learning curve factors. If this contract involves a relatively small number of highly customized units, the price might be within expectations. A comprehensive benchmark would require analyzing data from contracts for similar tactical wheeled vehicles, considering factors like payload capacity, mobility requirements, and integrated electronics.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential production delays due to the complexity of integrating new systems onto a vehicle platform, supply chain disruptions for specialized components, and the possibility of cost growth if unforeseen technical challenges arise, despite the firm fixed-price structure. Mitigation strategies likely involve robust program management by the Navy, detailed oversight of the contractor's production processes, and contingency planning for component sourcing. The firm fixed-price contract itself mitigates cost overrun risk for the government, shifting it primarily to the contractor, provided the scope remains stable.

What is the expected effectiveness of the Navy Marine Ship Interdiction System once deployed, based on its intended capabilities?

The intended effectiveness of the Navy Marine Ship Interdiction System is to provide enhanced capabilities for intercepting and disabling maritime threats, particularly in scenarios involving carrier operations or littoral environments. While specific performance metrics are not detailed in the provided data, such systems typically aim to improve situational awareness, provide standoff interdiction capabilities (e.g., non-lethal or precision engagement), and enhance force protection. Its deployment is expected to bolster the Navy's ability to counter asymmetric threats and maintain operational freedom in contested waters.

How does current spending on this specific system compare to historical spending patterns for similar naval interdiction or vehicle programs?

This $50.8 million award represents initial production funding for a specific system. Historical spending patterns for similar naval interdiction or vehicle programs would need to be analyzed over multiple fiscal years to establish a trend. If this is a new program, current spending is the baseline. If it's an upgrade or continuation, comparing this award to previous LRIP or full-rate production contracts for related systems (e.g., previous generations of interdiction vehicles, specialized patrol craft components) would reveal if spending is increasing, decreasing, or stable relative to past investments in similar capabilities.

What are the implications of awarding this contract to Oshkosh Defense LLC for the broader defense industrial base in heavy truck manufacturing?

Awarding this contract to Oshkosh Defense LLC reinforces its position as a key supplier of specialized heavy vehicles for the U.S. military. It signifies continued demand for robust, mission-critical platforms within the defense sector. For the broader industrial base, it suggests a healthy, albeit specialized, segment within heavy truck manufacturing focused on defense needs. This can stimulate investment in advanced manufacturing techniques, skilled labor, and supply chain resilience within this niche. However, it also highlights potential consolidation if only a few large players can meet the stringent requirements and scale of defense contracts.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Heavy Duty Truck Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785422R1002

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oshkosh Corporation

Address: 2307 OREGON ST, OSHKOSH, WI, 54902

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $50,861,880

Exercised Options: $50,861,880

Current Obligation: $50,861,880

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $6,676,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: M6785422D1002

IDV Type: IDC

Timeline