DoD awards $52.9M for diesel engines, raising questions about competition and value

Contract Overview

Contract Amount: $52,862,599 ($52.9M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-08-03

End Date: 2024-11-21

Contract Duration: 1,206 days

Daily Burn Rate: $43.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAME: DIESEL ENGINES W/CONTAINERS NSNS: 2815-01-576-5292 / 2815-01-457-4835 QTY: 94 OF 01-576-5292 AND 338 OF 01-457-4835

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $52.9 million to OSHKOSH DEFENSE LLC for work described as: NAME: DIESEL ENGINES W/CONTAINERS NSNS: 2815-01-576-5292 / 2815-01-457-4835 QTY: 94 OF 01-576-5292 AND 338 OF 01-457-4835 Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Significant duration of 1206 days suggests a long-term need. 3. High quantity of engines procured indicates a substantial program requirement. 4. The contract's value is substantial, warranting scrutiny of cost-effectiveness. 5. Oversight and accountability mechanisms need to be clearly defined for this large award. 6. Potential for future contract modifications or follow-on orders exists.

Value Assessment

Rating: questionable

The total award of $52.9 million for 94 units of NSN 2815-01-576-5292 and 338 units of NSN 2815-01-457-4835 is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition raises concerns about whether the government secured the best possible value. Further analysis would be needed to compare the unit costs to industry benchmarks for similar diesel engines with containers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source or non-competitive procurement. This means that only one vendor, Oshkosh Defense LLC, was solicited for this requirement. The lack of competition limits the government's ability to explore alternative solutions or negotiate pricing based on multiple offers, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding processes. This can result in overpayment for goods and services.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential diesel engines for its operations. The engines are likely intended for use in various military platforms or support equipment. The geographic impact is primarily within the Department of Defense's logistical and operational footprint. Workforce implications are likely concentrated within Oshkosh Defense LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may have led to inflated prices.
Long contract duration could increase risk of cost overruns through modifications.
Sole-source award limits transparency in pricing and vendor selection.
Potential for vendor lock-in due to the non-competitive nature of the award.

Positive Signals

Oshkosh Defense LLC is a known entity in defense contracting, suggesting some level of established capability.
The contract is a definitive contract, providing a clear framework for the transaction.
The firm fixed price (FFP) contract type helps to control costs for the government, assuming the initial price is fair.

Sector Analysis

This contract falls within the 'Other Engine Equipment Manufacturing' sector, a niche within the broader industrial manufacturing landscape. The market for specialized diesel engines, particularly those integrated with containers for military applications, is often characterized by a limited number of qualified suppliers. The size of this specific contract suggests a significant procurement within this specialized segment. Comparable spending benchmarks would likely involve other large-scale engine procurements for defense or heavy industrial use.

Small Business Impact

The data indicates that small business participation (sb) is marked as false (ss: false, sb: false), suggesting no specific small business set-aside was applied to this contract. Furthermore, there is no explicit mention of subcontracting plans for small businesses. This means the primary contractor, Oshkosh Defense LLC, is likely fulfilling the contract with its own resources or larger subcontractors, with potentially limited direct benefit to the small business ecosystem for this specific award.

Oversight & Accountability

The provided data does not detail specific oversight mechanisms for this contract. As a Department of Defense contract, it would typically fall under the purview of the Defense Contract Management Agency (DCMA) for performance oversight and the Defense Contract Audit Agency (DCAA) for financial audits. Inspector General investigations could be initiated if fraud, waste, or abuse is suspected. Transparency would depend on the public availability of contract modifications and performance reports.

Related Government Programs

Defense Logistics Agency (DLA) Procurement
Military Vehicle Engine Procurement
Heavy Equipment Manufacturing Contracts
Department of Defense Supply Chain Management

Risk Flags

Non-competitive award
Lack of price benchmark
Long contract duration
Potential for cost growth

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.9 million to OSHKOSH DEFENSE LLC. NAME: DIESEL ENGINES W/CONTAINERS NSNS: 2815-01-576-5292 / 2815-01-457-4835 QTY: 94 OF 01-576-5292 AND 338 OF 01-457-4835

Who is the contractor on this award?

The obligated recipient is OSHKOSH DEFENSE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $52.9 million.

What is the period of performance?

Start: 2021-08-03. End: 2024-11-21.

What is the historical spending pattern for similar diesel engines with containers by the Department of Defense?

Analyzing historical spending for similar diesel engines with containers by the Department of Defense is crucial for context. Without specific historical data for these exact NSNs or comparable items, a general assessment can be made. Large-scale procurements of engines and related equipment for military applications often involve significant dollar values, especially when customized or integrated into specific platforms. Historically, the DoD has awarded numerous contracts for engine systems, ranging from tactical vehicle engines to power generation units. The duration and value of this $52.9 million contract, awarded non-competitively over 1206 days, suggest a substantial, long-term requirement. A review of past solicitations and awards for similar engine systems would reveal if this price point is consistent with previous non-competitive or competitive procurements, and identify any trends in pricing or vendor concentration within this specialized market segment.

What are the specific performance requirements and technical specifications for these diesel engines?

The provided data identifies the National Stock Numbers (NSNs) 2815-01-576-5292 and 2815-01-457-4835, along with quantities and the contractor, Oshkosh Defense LLC. However, it does not detail the specific performance requirements or technical specifications for these diesel engines. These engines are likely designed for demanding military applications, potentially requiring specific horsepower, fuel efficiency, environmental resilience (temperature, altitude, shock), and integration capabilities with other military systems or containers. The 'Other Engine Equipment Manufacturing' NAICS code suggests a focus on the engine itself rather than a complete vehicle. Detailed specifications would typically be found in the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not included in the provided summary data. Understanding these specifications is vital for assessing the complexity of the requirement and justifying the chosen contractor and price.

What is Oshkosh Defense LLC's track record with similar non-competitive contracts?

Oshkosh Defense LLC has a significant track record as a prime contractor for the Department of Defense, particularly in the area of tactical wheeled vehicles and related components. While this specific contract for diesel engines was awarded non-competitively, Oshkosh has historically secured numerous large-value contracts, many of which may have involved competitive bidding. Analyzing their broader contract history can reveal patterns in contract types, performance, and pricing. It's important to investigate whether Oshkosh has a history of receiving sole-source awards for engine systems or other components, and how those contracts have performed in terms of cost, schedule, and quality. A review of past performance evaluations and any contract disputes or modifications associated with Oshkosh's previous awards would provide further insight into their reliability and the potential risks associated with this current non-competitive award.

Are there any known risks or challenges associated with the supply chain for these specific diesel engines?

The data provided does not explicitly detail supply chain risks for these specific diesel engines. However, given the nature of defense contracting and specialized equipment, potential risks can be inferred. As a sole-source award, the government is reliant on Oshkosh Defense LLC's ability to manage its supply chain effectively. Risks could include the availability of critical raw materials, reliance on a limited number of specialized component manufacturers, geopolitical factors affecting global supply chains, or potential production delays. The long duration of the contract (1206 days) increases the exposure to supply chain disruptions over time. Without further information on the specific components and suppliers involved, it is difficult to quantify these risks, but they are inherent in procuring complex manufactured goods, especially under non-competitive conditions.

What is the justification for awarding this contract on a sole-source basis?

The provided data states the contract was 'NOT COMPETED,' which is the basis for a sole-source award. However, it does not include the specific justification or documentation that supported this determination. Typical justifications for sole-source procurements include: only one responsible source being available; an urgent and compelling need that precludes full and open competition; or a national security requirement. For a contract of this magnitude ($52.9 million), the government would have had to formally document why full and open competition was not feasible or not in the government's best interest. Without access to the Justification and Approval (J&A) document, it is impossible to assess the validity of the sole-source determination and whether it was appropriate under federal acquisition regulations.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Other Engine Equipment Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRDL120R0200

Offers Received: 1

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: $52,862,599

Exercised Options: $52,862,599

Current Obligation: $52,862,599

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline