HEMTT A3 contract awarded to Oshkosh Corp for over $13.2M, highlighting sole-source procurement in heavy vehicle manufacturing

Contract Overview

Contract Amount: $13,221,591 ($13.2M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2007-06-26

End Date: 2010-06-30

Contract Duration: 1,100 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HEMTT A3

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to OSHKOSH CORP for work described as: HEMTT A3 Key points: 1. The contract value of over $13.2 million for the HEMTT A3 program indicates significant investment in specialized military logistics. 2. Oshkosh Corporation's award suggests a strong incumbent position or unique capability for this specific heavy vehicle system. 3. The 'NOT COMPETED' status raises questions about potential missed opportunities for cost savings through competitive bidding. 4. The duration of the contract (1100 days) points to a substantial, long-term need for these vehicles. 5. The 'COST PLUS FIXED FEE' contract type may offer incentives for efficiency but also carries inherent cost-reimbursement risks. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this specific HEMTT A3 contract is challenging without direct comparisons to similar sole-source awards for this exact vehicle configuration. However, the total award of over $13.2 million for a single contract (NO=1) suggests a substantial per-unit cost, typical for highly specialized military equipment. The 'COST PLUS FIXED FEE' structure means the government pays the actual costs plus a negotiated fee, which can sometimes lead to higher overall expenditures compared to fixed-price contracts if cost controls are not rigorously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from multiple bidders vying for the contract. This approach is often justified for unique systems or when urgent needs arise that preclude a full and open competition.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the absence of competition limits the government's leverage in price negotiations. This necessitates strong justification and oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical logistics and transport capabilities. The contract delivers specialized heavy tactical vehicles (HEMTT A3) essential for military operations. The geographic impact is primarily within the U.S. Army's operational theaters, supporting troop deployment and supply chains. Workforce implications include skilled manufacturing and engineering roles at Oshkosh Corporation and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus contract type requires diligent oversight to manage expenditures.
Lack of small business participation may limit opportunities for smaller firms in this specific procurement.

Positive Signals

Award to Oshkosh Corporation, a known entity in military vehicle production, suggests reliability.
The HEMTT A3 is a proven platform, indicating a focus on operational readiness.
The contract duration implies a sustained commitment to equipping the military with necessary assets.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by high technological requirements, stringent quality standards, and often long procurement cycles. The HEMTT A3 falls under the Truck Trailer Manufacturing (NAICS 336212) category. This market is dominated by a few large, specialized contractors capable of meeting the demanding specifications of military equipment. Spending in this area is driven by defense budgets and the need for robust logistical support systems, with contracts often being sole-source or limited competition due to the unique nature of the platforms.

Small Business Impact

This contract does not appear to have a small business set-aside (SB=false). The nature of heavy military vehicle manufacturing often requires large-scale production capabilities and specialized expertise that may be beyond the scope of many small businesses. While this specific contract may not directly benefit small businesses through set-asides, Oshkosh Corporation, as the prime contractor, may engage small businesses as subcontractors for components or specialized services, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a sole-source award with a cost-plus fee structure, rigorous oversight is crucial to ensure that costs are reasonable and the fixed fee is justified. The Defense Contract Audit Agency (DCAA) and the Department of Defense Inspector General (DoDIG) would likely have jurisdiction for auditing and investigating potential fraud, waste, or abuse, ensuring accountability and transparency in the expenditure of funds.

Related Government Programs

Heavy Expanded Mobility Tactical Trucks (HEMTT) Family of Vehicles
Logistics Vehicle System Replacement (LVSR)
Family of Medium Tactical Vehicles (FMTV)

Risk Flags

Sole-source procurement
Cost-plus contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to OSHKOSH CORP. HEMTT A3

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 $13.2 million.

What is the period of performance?

Start: 2007-06-26. End: 2010-06-30.

What is the historical spending trend for HEMTT A3 vehicles by the Department of the Army?

Analyzing historical spending for the HEMTT A3 requires accessing detailed contract databases beyond this single award. However, the HEMTT platform itself has been a staple in Army logistics for decades, undergoing various upgrades and iterations. Spending on such vehicles is typically cyclical, driven by modernization programs, fleet replacement schedules, and operational demands. A comprehensive review would involve examining all awarded contracts for HEMTT variants over time, noting the procuring agency, contract type, and total obligated amounts to identify trends in investment and procurement strategies for this critical asset.

How does the 'COST PLUS FIXED FEE' contract type compare to other contract types in terms of overall cost to the government for similar military vehicle procurements?

Cost-Plus Fixed Fee (CPFF) contracts are often used when the scope of work is well-defined but the exact costs are uncertain, such as in development or specialized manufacturing. While the fixed fee provides the contractor with an incentive to control costs (as the fee is a percentage of the initial estimated cost), the government bears the risk of cost overruns. Compared to Firm-Fixed-Price (FFP) contracts, where the contractor assumes most of the cost risk and the government pays a set price, CPFF contracts can sometimes result in higher final costs for the government if actual costs significantly exceed initial estimates. However, FFP might not be feasible for highly complex or novel systems where cost estimation is difficult.

What are the specific capabilities and intended operational roles of the HEMTT A3 variant that necessitated a sole-source award?

The HEMTT A3 is a variant of the Heavy Expanded Mobility Tactical Truck, designed for robust logistical support in demanding environments. Its capabilities typically include carrying significant payloads (e.g., fuel, water, ammunition, troop transport) over long distances and varied terrain, often featuring an 8x8 drive system for enhanced mobility. The 'A3' designation likely refers to a specific upgrade or configuration. A sole-source award for such a specialized platform suggests that Oshkosh Corporation possesses unique manufacturing rights, proprietary technology, or has demonstrated a singular ability to meet the Army's precise technical specifications and performance requirements for this particular model, making competitive procurement impractical or impossible.

What is Oshkosh Corporation's track record with the Department of Defense regarding similar heavy vehicle contracts?

Oshkosh Corporation has a long and extensive track record as a primary supplier of tactical wheeled vehicles to the U.S. military, including various HEMTT and FMTV configurations, as well as the LVSR. They are a well-established prime contractor known for producing robust and reliable vehicles that meet stringent military specifications. Their history with the DoD includes numerous large-scale contracts, often awarded through competitive processes but also including sole-source procurements for specific variants or urgent needs. This extensive experience positions them as a key player in military vehicle manufacturing, with a demonstrated capacity to deliver complex systems.

Are there any known performance issues or significant cost overruns associated with previous HEMTT A3 procurements or similar Oshkosh contracts?

Information regarding specific performance issues or significant cost overruns for the HEMTT A3 under this particular contract (awarded in 2007) is not readily available in the provided data. However, like many large, complex military vehicle programs, the HEMTT family has likely faced challenges over its lifecycle, which is common in defense contracting. Cost growth can occur due to evolving requirements, unforeseen technical difficulties, or changes in material costs. Performance assessments are typically documented in contract performance reports and program reviews, which are often internal to the DoD or subject to release under specific conditions. Without access to those detailed reports, a definitive statement on past issues is not possible.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › ECONOMIC GROWTH/PRODUCTIVITY R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV07R0448

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2307 OREGON STREET, OSHKOSH, WI, 54902

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,221,591

Exercised Options: $13,221,591

Current Obligation: $13,221,591

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline