Department of the Army awards $154M for up to 800 MRAP All-Terrain Vehicles to Oshkosh Defense LLC

Contract Overview

Contract Amount: $154,039,737 ($154.0M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2014-08-06

End Date: 2017-08-31

Contract Duration: 1,121 days

Daily Burn Rate: $137.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACTION IS FOR THE PROCUREMENT OF UP TO 800 RESET MINE RESISTANT AMBUSH PROTECTED (MRAP) ALL-TERRAIN VEHICLES (M-ATV).

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $154.0 million to OSHKOSH DEFENSE LLC for work described as: ACTION IS FOR THE PROCUREMENT OF UP TO 800 RESET MINE RESISTANT AMBUSH PROTECTED (MRAP) ALL-TERRAIN VEHICLES (M-ATV). Key points: 1. The contract focuses on procuring a significant quantity of specialized military vehicles, indicating a substantial investment in tactical mobility. 2. Oshkosh Defense LLC, a known entity in military vehicle manufacturing, is the sole awardee, raising questions about competitive pressure on pricing. 3. The firm-fixed-price contract type suggests that cost risks are primarily borne by the contractor, which can incentivize efficiency. 4. The duration of the contract (over three years) implies a sustained need for these vehicles within the Army's operational framework. 5. The absence of a small business set-aside suggests this procurement is likely beyond the scope or capability of smaller enterprises in this specialized sector. 6. The procurement falls under the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry, highlighting its specific defense application.

Value Assessment

Rating: fair

The total award of $154 million for up to 800 M-ATV vehicles suggests an average unit cost of approximately $192,500. Benchmarking this against historical MRAP programs and similar armored vehicle procurements is crucial. Without specific performance metrics or detailed cost breakdowns, it's challenging to definitively assess value for money. However, the firm-fixed-price nature provides some assurance against cost overruns for the government.

Cost Per Unit: Approximately $192,500 per vehicle (based on maximum quantity and total award value).

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach bypasses the standard competitive bidding process, which typically drives down prices and fosters innovation. The rationale for a sole-source award would need to be thoroughly justified, often due to unique capabilities, existing sole-source production lines, or urgent national security needs that preclude a lengthy competition.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government lacks the benefit of competitive pricing. It also limits opportunities for other qualified manufacturers to secure government contracts.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize these advanced, protected mobility vehicles in various operational environments. The services delivered include the manufacturing and supply of up to 800 M-ATV vehicles, enhancing the Army's tactical transport capabilities. The geographic impact is national, with production likely centered in Wisconsin (where Oshkosh is based) and deployment across Army units globally. Workforce implications include job creation and sustainment within Oshkosh Defense's manufacturing facilities and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Sole-source awards can reduce transparency and accountability in the procurement process.
Reliance on a single supplier could create long-term dependency and potential supply chain vulnerabilities.

Positive Signals

Firm-fixed-price contract type shifts cost risk to the contractor.
Oshkosh Defense has established expertise in producing military vehicles, suggesting a lower risk of technical failure.
The M-ATV is a proven platform designed for survivability and mobility in challenging terrains.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and significant capital investment. This contract for MRAP All-Terrain Vehicles (M-ATVs) fits within the broader category of tactical wheeled vehicles, a critical component of modern military logistics and operations. Spending in this area is often driven by evolving threat assessments and the need to replace aging fleets with more survivable and capable platforms. Comparable spending benchmarks would involve other large-scale armored vehicle procurements by the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses explicitly mentioned in the provided data. Given the nature of armored vehicle manufacturing, which requires extensive specialized facilities, engineering expertise, and significant capital, it is common for prime contracts of this magnitude to be awarded to large, established defense contractors. Small businesses may participate indirectly through the supply chain, providing components or services to the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring contract performance and compliance. Transparency is limited due to the sole-source nature of the award. Inspector General (IG) jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

MRAP Vehicle Program
Tactical Wheeled Vehicles
Armored Personnel Carriers
Mine-Resistant Ambush Protected Vehicles
Department of Defense Vehicle Procurement

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for higher costs due to lack of competition.
Limited transparency in the procurement process.
Dependency on a single supplier for critical assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $154.0 million to OSHKOSH DEFENSE LLC. ACTION IS FOR THE PROCUREMENT OF UP TO 800 RESET MINE RESISTANT AMBUSH PROTECTED (MRAP) ALL-TERRAIN VEHICLES (M-ATV).

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 Army).

What is the total obligated amount?

The obligated amount is $154.0 million.

What is the period of performance?

Start: 2014-08-06. End: 2017-08-31.

What is Oshkosh Defense LLC's track record with similar MRAP and M-ATV contracts?

Oshkosh Defense LLC has a significant and well-documented history with the MRAP (Mine-Resistant Ambush Protected) program and its variants, including the M-ATV (MRAP All-Terrain Vehicle). They were a major producer during the surge of MRAP production in the mid-to-late 2000s, delivering thousands of vehicles to the U.S. military and allied nations. Their experience includes adapting designs to meet evolving battlefield requirements, managing complex supply chains for armored vehicles, and fulfilling large-scale production orders under demanding timelines. This extensive background suggests a high level of technical proficiency and program management capability relevant to the current procurement.

How does the per-unit cost of $192,500 compare to previous M-ATV procurements?

The estimated per-unit cost of approximately $192,500 for the M-ATVs under this contract requires careful comparison with historical data. During peak production years for MRAPs and M-ATVs, unit costs could fluctuate significantly based on volume, specific configurations, and contract terms. Early M-ATV contracts, particularly those awarded during periods of high demand and rapid fielding, sometimes saw higher per-unit costs due to urgency and initial production ramp-up. Conversely, later contracts with larger volumes or mature production lines might achieve lower costs. Without knowing the specific configuration and the exact contract details (e.g., base price vs. options exercised) of previous procurements, a direct comparison is difficult. However, this figure should be benchmarked against recent awards for similar vehicles to assess its competitiveness.

What are the primary risks associated with a sole-source award for military vehicles?

The primary risks associated with a sole-source award for military vehicles like the M-ATV revolve around cost, innovation, and long-term strategic options. Without competition, the government loses the inherent price discovery mechanism that typically drives down costs. This can lead to the contractor charging a premium, resulting in less value for taxpayer money. Furthermore, a sole-source award can stifle innovation, as there is less pressure on the incumbent contractor to improve designs or manufacturing processes. Strategically, it can create a dependency on a single supplier, potentially limiting future sourcing flexibility and making it harder to transition to new technologies or alternative providers if needed.

What is the expected impact of these M-ATVs on the Army's operational effectiveness?

The procurement of up to 800 M-ATVs is expected to significantly enhance the Army's operational effectiveness by providing protected mobility in challenging terrains. The M-ATV is designed to offer a high level of protection against IEDs (Improvised Explosive Devices) and other battlefield threats, while also possessing superior off-road mobility compared to earlier MRAP variants. This combination allows units to traverse difficult environments more safely and efficiently, reducing casualties and improving mission accomplishment. These vehicles are crucial for convoy operations, reconnaissance, and troop transport in high-risk areas, thereby bolstering the Army's ability to conduct sustained operations across diverse operational theaters.

How has federal spending on military armored vehicles evolved over the past decade?

Federal spending on military armored vehicles, including MRAPs and M-ATVs, has seen significant fluctuations over the past decade. Spending peaked during the height of the conflicts in Iraq and Afghanistan, driven by urgent operational needs for survivable vehicles. Following the drawdown of these conflicts, procurement volumes decreased substantially, leading to reduced spending. However, spending has remained significant as the military continues to modernize its fleet, replace aging platforms, and adapt to new threat environments. Recent years have seen renewed focus on armored vehicle modernization, including upgrades to existing platforms and development of new capabilities, indicating a sustained, albeit cyclical, level of investment in this category.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component 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)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oshkosh Corp (UEI: 006070445)

Address: 2307 OREGON ST, OSHKOSH, WI, 54903

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

Financial Breakdown

Contract Ceiling: $301,456,544

Exercised Options: $154,039,737

Current Obligation: $154,039,737

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $363,076

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline