DoD's $325M Family of Medium Tactical Vehicles program management support awarded to Oshkosh Defense shows strong performance
Contract Overview
Contract Amount: $325,419,598 ($325.4M)
Contractor: Oshkosh Defense LLC
Awarding Agency: Department of Defense
Start Date: 2018-09-26
End Date: 2023-09-30
Contract Duration: 1,830 days
Daily Burn Rate: $177.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ADD ORDER YEAR (OY) 10 PROGRAM MANAGEMENT SUPPORT FOR THE FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV) TO THE CONTRACT.
Place of Performance
Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902
Plain-Language Summary
Department of Defense obligated $325.4 million to OSHKOSH DEFENSE LLC for work described as: ADD ORDER YEAR (OY) 10 PROGRAM MANAGEMENT SUPPORT FOR THE FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV) TO THE CONTRACT. Key points: 1. Contract value of over $325 million demonstrates significant investment in tactical vehicle sustainment. 2. Sole awardee Oshkosh Defense LLC suggests a specialized capability or a highly competitive initial award. 3. Performance indicators like delivery order success and a long contract duration point to operational reliability. 4. The contract's focus on program management support is critical for the lifecycle of essential military equipment. 5. Firm Fixed Price contract type offers cost certainty for the Department of Defense. 6. The contract spans a significant period, indicating a long-term need for these services.
Value Assessment
Rating: good
The contract's total value of over $325 million for program management support of the Family of Medium Tactical Vehicles (FMTV) is substantial. While direct comparisons are difficult without specific program management support benchmarks, the firm-fixed-price nature of the contract suggests a degree of cost control. The duration of the contract (over 5 years) and the single award indicate a potentially specialized or long-term relationship, which can sometimes lead to better value through economies of scale and established processes, but also warrants scrutiny for potential price creep over time.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The fact that it resulted in a single award suggests that Oshkosh Defense LLC was deemed the most advantageous offer, potentially based on technical merit, past performance, or price. The level of competition at the initial award stage is crucial for ensuring the government receives the best value.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation, leading to more cost-effective solutions for essential defense programs.
Public Impact
The primary beneficiaries are the U.S. Army and Marine Corps, who rely on the FMTV fleet for logistical support and troop movement. The services delivered include program management, ensuring the continued readiness and sustainment of these critical vehicles. The geographic impact is broad, supporting military operations across various domestic and international locations where the FMTV is deployed. Workforce implications include support for specialized program management roles within Oshkosh Defense and potentially related supply chain jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in due to the single award and long-term nature of the contract.
- Reliance on a single contractor for critical program management could pose risks if the contractor faces financial or operational difficulties.
- Ensuring continued competitive pressure for future contract modifications or follow-on contracts will be important for long-term value.
Positive Signals
- The firm-fixed-price contract type provides budget predictability for the government.
- The long duration suggests a stable and reliable partnership, potentially leading to efficiencies in program execution.
- Award under full and open competition indicates a robust initial selection process.
- The contract's focus on program management implies a structured approach to vehicle sustainment.
Sector Analysis
The defense logistics and vehicle manufacturing sector is highly specialized, with a few key players dominating large government contracts. Oshkosh Defense is a significant entity in this space, known for its tactical wheeled vehicles. This contract fits within the broader defense industrial base, specifically supporting the sustainment and lifecycle management of a crucial vehicle platform. Spending in this area is driven by military readiness requirements and the need to maintain aging fleets.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a large prime contract awarded to Oshkosh Defense LLC, it is possible that subcontracting opportunities may exist for small businesses within the supply chain, but this is not explicitly detailed in the award information. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, with potential involvement from the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm-fixed-price contract type, which incentivizes the contractor to meet performance requirements within the agreed-upon budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific program management details may be sensitive.
Related Government Programs
- Family of Medium Tactical Vehicles (FMTV) Program
- Tactical Wheeled Vehicle Sustainment
- Defense Logistics Support Contracts
- Military Vehicle Procurement and Maintenance
Risk Flags
- Single-award dependency
- Long-term contract duration
- Potential for cost escalation in future modifications
- Reliance on contractor's financial stability
Tags
defense, department-of-defense, department-of-the-army, truck-trailer-manufacturing, full-and-open-competition, delivery-order, firm-fixed-price, program-management-support, medium-tactical-vehicles, oshkosh-defense-llc, wisconsin, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $325.4 million to OSHKOSH DEFENSE LLC. ADD ORDER YEAR (OY) 10 PROGRAM MANAGEMENT SUPPORT FOR THE FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV) TO THE CONTRACT.
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 $325.4 million.
What is the period of performance?
Start: 2018-09-26. End: 2023-09-30.
What is Oshkosh Defense LLC's track record with the Family of Medium Tactical Vehicles (FMTV) program prior to this award?
Oshkosh Defense LLC has a well-established history with the FMTV program. They were awarded the original contract to produce and sustain the FMTV fleet, succeeding BAE Systems. Their role has encompassed manufacturing, integration, and lifecycle support for these vehicles, which are a cornerstone of U.S. Army and Marine Corps logistics. This specific contract, focused on program management support, builds upon their extensive experience in managing the complexities of the FMTV platform, including engineering, maintenance, and supply chain operations. Their long-standing involvement suggests a deep understanding of the vehicle's requirements and operational environment.
How does the $325 million contract value compare to similar program management support contracts within the DoD?
Comparing the $325 million value requires context regarding the scope and duration of 'program management support.' For large vehicle platforms like the FMTV, which involves thousands of vehicles and a complex sustainment ecosystem, this figure appears reasonable for a multi-year contract (1830 days, approximately 5 years). Similar contracts for major weapon systems or vehicle fleets often run into hundreds of millions or even billions of dollars over their lifecycle. However, without specific benchmarks for 'program management support' as a distinct service category across different platforms, a precise comparison is challenging. The value reflects the ongoing need for dedicated management of the FMTV's operational readiness, maintenance, and upgrades.
What are the primary risks associated with a single-award, firm-fixed-price contract for program management support?
A primary risk with a single-award contract is the potential for vendor lock-in, where the government becomes heavily reliant on one contractor, potentially reducing leverage for future negotiations and price reductions. If Oshkosh Defense were to experience significant financial distress or operational failures, it could severely disrupt the FMTV program's sustainment. Additionally, while firm-fixed-price offers cost certainty, it can sometimes disincentivize proactive innovation or cost-saving measures by the contractor if not structured with appropriate performance incentives. Ensuring robust oversight and clear performance metrics are crucial to mitigate these risks.
How effective has the FMTV program been in meeting its operational requirements, and how does this contract contribute?
The FMTV program has generally been considered effective in meeting the U.S. military's medium tactical vehicle needs, providing a versatile platform for various missions. This contract for program management support is crucial for maintaining that effectiveness. By ensuring efficient logistics, maintenance scheduling, and addressing obsolescence issues, the program management function directly contributes to the readiness and operational availability of the FMTV fleet. Effective program management helps to optimize the lifecycle of the vehicles, ensuring they remain capable and reliable assets for the warfighter, thereby supporting overall mission success.
What are the historical spending patterns for FMTV program management or sustainment over the last decade?
Historical spending on the FMTV program, including sustainment and program management, has been substantial over the last decade, reflecting the large size of the fleet and its critical role. While precise figures for 'program management support' alone are difficult to isolate without detailed contract data, the overall sustainment costs for the FMTV fleet have likely been in the hundreds of millions annually, encompassing maintenance, repair, spare parts, and associated program support. This $325 million award represents a significant portion of that ongoing investment, indicating a consistent need for dedicated management resources to ensure the fleet's readiness.
Does the firm-fixed-price (FFP) contract type adequately incentivize performance and quality for program management services?
The firm-fixed-price (FFP) contract type provides significant cost certainty for the government, as the contractor assumes most of the risk for cost overruns. This incentivizes the contractor to manage costs efficiently. However, for service-oriented contracts like program management, FFP alone might not sufficiently incentivize proactive quality improvements or innovative solutions if the scope is narrowly defined. Performance metrics, service level agreements (SLAs), and potentially award-fee structures tied to specific performance outcomes are often layered onto FFP contracts to ensure quality and encourage contractor initiative beyond just cost control. The effectiveness depends on how well the PWS and performance metrics are defined.
Industry Classification
NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Oshkosh Corporation
Address: 2307 OREGON ST, OSHKOSH, WI, 54903
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $440,865,323
Exercised Options: $325,419,598
Current Obligation: $325,419,598
Actual Outlays: $828,995
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $11,776
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV09D0159
IDV Type: IDC
Timeline
Start Date: 2018-09-26
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 12:09:00
Last Modified: 2024-01-25
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