DoD's $14.4M Oshkosh Corp contract for dressed engine parts shows limited competition and fair value

Contract Overview

Contract Amount: $14,419,896 ($14.4M)

Contractor: Oshkosh Corp

Awarding Agency: Department of Defense

Start Date: 2008-12-30

End Date: 2010-08-31

Contract Duration: 609 days

Daily Burn Rate: $23.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DRESSED ENGINE W/CONTAINER; DRESSED TRANSMISSION W/CONTAINER; DRESSED TRANSFER CASE W/CONTAINER

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to OSHKOSH CORP for work described as: DRESSED ENGINE W/CONTAINER; DRESSED TRANSMISSION W/CONTAINER; DRESSED TRANSFER CASE W/CONTAINER Key points: 1. The contract awarded to Oshkosh Corp for dressed engine components appears to be priced competitively, though a lack of robust competition limits definitive value assessment. 2. The sole-source nature of this award raises questions about potential overpayment and the absence of market-driven price discovery. 3. Performance risks are mitigated by the firm-fixed-price contract type, but long-term reliability of specialized engine parts warrants ongoing monitoring. 4. This contract falls within the broader category of defense logistics and maintenance, supporting the operational readiness of military vehicles. 5. The award is concentrated within the 'Gasoline Engine and Engine Parts Manufacturing' sector, with a specific focus on heavy-duty vehicle components.

Value Assessment

Rating: fair

The contract's value of $14.4 million for dressed engine, transmission, and transfer case assemblies is difficult to benchmark precisely due to the limited competition. While the firm-fixed-price structure provides cost certainty, the absence of multiple bids prevents a thorough assessment of whether the price reflects the best possible market value. Without comparable sole-source awards or detailed cost breakdowns, it's challenging to definitively state if this represents excellent or questionable value for money. The price appears within a reasonable range for specialized heavy-duty vehicle components, but further analysis would be needed to confirm optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Oshkosh Corp, was solicited. This approach is typically used when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for multiple bidders to offer their pricing, potentially leading to higher costs for the government than if a competitive process had been employed. Price discovery is therefore limited, relying heavily on the government's negotiation and oversight capabilities.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from the cost savings that typically arise from a competitive bidding process. This could result in a higher overall expenditure for these essential engine components.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the availability of critical engine and transmission components for military vehicles. The services delivered include the provision of dressed engine, transmission, and transfer case assemblies, essential for vehicle maintenance and operational readiness. The geographic impact is primarily within the defense supply chain, supporting military operations globally. Workforce implications are likely concentrated within Oshkosh Corp's manufacturing facilities, supporting skilled labor in the automotive and defense manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Oshkosh Corp is a known entity in defense vehicle manufacturing, suggesting a degree of reliability.
Contract supports the operational readiness of essential military equipment.

Sector Analysis

This contract falls within the broader automotive and defense manufacturing sector, specifically focusing on heavy-duty vehicle components. The market for specialized military vehicle parts is often characterized by a limited number of qualified suppliers due to stringent performance and reliability requirements. Comparable spending benchmarks are difficult to establish without more specific data on the exact components and their market value in a competitive environment. However, the total award of $14.4 million is significant for a specialized parts contract.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Oshkosh Corp, is a large business. There is no explicit information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Oshkosh Corp voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The firm-fixed-price nature of the contract simplifies some aspects of oversight by fixing the cost. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to review. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Vehicle Parts Procurement
Defense Logistics Agency Contracts
Oshkosh Corporation Defense Contracts
Heavy-Duty Engine Manufacturing
Sole-Source Defense Acquisitions

Risk Flags

Sole-source award
Limited competition
Potential for price inflation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to OSHKOSH CORP. DRESSED ENGINE W/CONTAINER; DRESSED TRANSMISSION W/CONTAINER; DRESSED TRANSFER CASE W/CONTAINER

Who is the contractor on this award?

The obligated recipient is OSHKOSH CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2008-12-30. End: 2010-08-31.

What is Oshkosh Corp's track record with the Department of Defense, particularly for similar engine component contracts?

Oshkosh Corporation has a long-standing and extensive relationship with the Department of Defense, primarily as a manufacturer of military vehicles, including tactical trucks and heavy equipment. Their track record includes numerous contracts for vehicle production, sustainment, and component supply. For engine and drivetrain components specifically, Oshkosh often integrates systems from various manufacturers into their final vehicle assemblies. While this particular contract focuses on supplying 'dressed' engine, transmission, and transfer case assemblies, it aligns with their core competency in providing robust and reliable systems for demanding military applications. Historical data would need to be reviewed to assess their performance specifically on similar component-level contracts, including on-time delivery, quality, and adherence to specifications, but their overall significant presence in the defense sector suggests a generally established capability.

How does the $14.4 million contract value compare to similar sole-source procurements for dressed engine assemblies in the defense sector?

Benchmarking the $14.4 million contract value for dressed engine assemblies against similar sole-source procurements is challenging without access to a comprehensive database of comparable defense contracts. Sole-source awards inherently lack the price transparency provided by competitive bidding. However, the value is substantial, suggesting these are complex, high-specification assemblies for heavy-duty military vehicles. Factors influencing this value would include the specific engine model, the completeness of the 'dressed' package (including all necessary ancillaries), and the stringent reliability and durability requirements mandated by the Department of Defense. Without direct comparisons, it's difficult to definitively assess if the price is high or low, but it reflects the specialized nature of military hardware procurement.

What are the primary risks associated with this sole-source contract for dressed engine components, and how are they mitigated?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may be paying more than necessary if Oshkosh Corp did not offer its most competitive price. Another risk is supply chain vulnerability; relying on a single supplier for critical engine components can lead to disruptions if Oshkosh faces production issues, labor strikes, or other unforeseen problems. Mitigation strategies employed by the government include the firm-fixed-price contract type, which caps the government's financial exposure. Robust contract oversight, including audits and performance monitoring, is also crucial. The government may also seek to negotiate longer-term agreements or explore alternative suppliers for future procurements to mitigate long-term supply risks.

What is the historical spending pattern for dressed engine assemblies by the Defense Logistics Agency (DLA) or the Department of Defense (DoD)?

Historical spending patterns for dressed engine assemblies by the DLA and DoD are likely substantial, given the vast size and operational tempo of the U.S. military. The DLA, in particular, is responsible for procuring and managing a wide array of spare parts and equipment to support all branches of the armed forces. Spending on engine components, including complex assemblies like those covered in this contract, would fluctuate based on vehicle fleet age, modernization programs, operational demands, and the availability of specific engine types across different platforms (e.g., tactical trucks, armored vehicles). Analyzing historical spending would require examining DLA and DoD procurement data over several fiscal years, looking at categories related to vehicle parts, engines, and transmissions, and identifying trends in contract values, award types (competitive vs. sole-source), and prime contractors.

How does the classification 'Gasoline Engine and Engine Parts Manufacturing' (NAICS 336312) influence the analysis of this contract?

The NAICS code 336312, 'Gasoline Engine and Engine Parts Manufacturing,' provides crucial context for this contract. It signifies that Oshkosh Corp is operating within a specific industrial segment focused on producing engines and their constituent parts. This classification helps in understanding the market landscape, identifying potential competitors (even if not utilized in this sole-source award), and benchmarking against industry standards. Contracts within this sector often involve high precision manufacturing, rigorous testing, and adherence to strict quality control protocols, especially when destined for military applications. The code also implies a certain level of capital investment and specialized expertise required, which can contribute to the overall cost of the components procured.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › Gasoline Engine and Engine Parts Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,419,896

Exercised Options: $14,419,896

Current Obligation: $14,419,896

Timeline