Department of the Army awards $101.3M for Family of Heavy Tactical Vehicles IV trucks and trailers to Oshkosh Defense LLC

Contract Overview

Contract Amount: $101,300,317 ($101.3M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2019-02-07

End Date: 2021-01-31

Contract Duration: 724 days

Daily Burn Rate: $139.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: FUNDS ORDER YEAR 4 TRUCKS AND TRAILERS FOR THE FAMILY OF HEAVY TACTICAL VEHICLES (FHTV) IV CONTRACT, A FIVE YEAR FIXED-PRICE INCENTIVE-FIRM, REQUIREMENTS CONTRACT.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $101.3 million to OSHKOSH DEFENSE LLC for work described as: FUNDS ORDER YEAR 4 TRUCKS AND TRAILERS FOR THE FAMILY OF HEAVY TACTICAL VEHICLES (FHTV) IV CONTRACT, A FIVE YEAR FIXED-PRICE INCENTIVE-FIRM, REQUIREMENTS CONTRACT. Key points: 1. Contract awarded as a fixed-price incentive, suggesting shared risk between the government and contractor. 2. The contract is a requirements contract, meaning the government commits to purchasing a specific range of goods or services over a set period. 3. Oshkosh Defense LLC is the sole awardee, indicating a sole-source or limited competition scenario. 4. The contract duration is 724 days, providing a clear timeframe for delivery and performance. 5. The contract falls under the Truck Trailer Manufacturing industry, a critical component of military logistics. 6. The award is a delivery order under a larger indefinite-delivery indefinite-quantity (IDIQ) contract, FHTV IV.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the total value of the FHTV IV contract and the specific items ordered. However, the fixed-price incentive structure aims to control costs by incentivizing the contractor to meet certain performance targets while sharing cost overruns. The total award amount of $101.3 million for trucks and trailers suggests a significant investment in tactical vehicle fleet modernization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under the FHTV IV contract, which was not competed at the delivery order level. The FHTV IV contract itself was likely competed previously, but the specific award to Oshkosh Defense LLC for these trucks and trailers was not subject to a new competitive process for this particular order. This approach can streamline procurement for established programs but may limit opportunities for new vendors.

Taxpayer Impact: For taxpayers, a sole-source award for a delivery order means that the price is negotiated directly with the incumbent contractor, potentially foregoing the cost savings that could arise from a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize these heavy tactical vehicles for various operational and logistical missions. The services delivered include the provision of trucks and trailers essential for transporting equipment, personnel, and supplies. The geographic impact is national, supporting military readiness across different installations and deployment zones. Workforce implications include continued employment for Oshkosh Defense LLC's manufacturing and support staff, particularly in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for this specific delivery order could lead to higher prices than a competed scenario.
Reliance on a single contractor for critical vehicle components may pose supply chain risks.
The fixed-price incentive contract, while sharing risk, still requires careful monitoring to ensure cost targets are met.

Positive Signals

Oshkosh Defense LLC has a demonstrated track record in producing tactical vehicles for the U.S. military.
The FHTV IV contract provides a stable framework for acquiring necessary tactical vehicles.
The fixed-price incentive structure aligns contractor and government interests in achieving performance and cost objectives.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by long-term contracts, high technological requirements, and significant government investment. The market is dominated by a few large, specialized contractors. This contract for heavy tactical vehicles fits within the broader strategy of modernizing military logistics and ensuring operational readiness. Comparable spending benchmarks would involve analyzing other large vehicle procurement contracts within the Department of Defense.

Small Business Impact

The data indicates that small business participation was not a primary consideration for this specific delivery order, as the contract was not competed and Oshkosh Defense LLC is a large business. There is no explicit mention of small business set-asides or subcontracting requirements for this particular award. The impact on the small business ecosystem is likely minimal unless Oshkosh Defense LLC voluntarily engages small businesses in its supply chain for this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting officers and program managers. Accountability measures are embedded in the fixed-price incentive contract terms, which link contractor profit to performance and cost targets. Transparency is facilitated through contract award databases, though specific details of the FHTV IV contract and its delivery orders may be subject to certain restrictions. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Family of Heavy Tactical Vehicles (FHTV) Program
Logistics Vehicle System Replacement (LVSR)
Joint Light Tactical Vehicle (JLTV)
Tactical Wheeled Vehicles (TWV) Programs

Risk Flags

Sole-source award for delivery order
Potential for higher costs due to lack of competition
Reliance on a single contractor for critical assets

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $101.3 million to OSHKOSH DEFENSE LLC. FUNDS ORDER YEAR 4 TRUCKS AND TRAILERS FOR THE FAMILY OF HEAVY TACTICAL VEHICLES (FHTV) IV CONTRACT, A FIVE YEAR FIXED-PRICE INCENTIVE-FIRM, REQUIREMENTS 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 $101.3 million.

What is the period of performance?

Start: 2019-02-07. End: 2021-01-31.

What is the historical spending pattern for the FHTV IV contract and Oshkosh Defense LLC's role in it?

The FHTV IV contract is a significant, multi-year requirements contract awarded to Oshkosh Defense LLC. Historical data for the FHTV IV program would reveal the total value awarded across all delivery orders since its inception, the types of vehicles and trailers procured, and the delivery schedules. Oshkosh Defense LLC has been a long-standing prime contractor for various generations of the Family of Heavy Tactical Vehicles, indicating a sustained relationship and a deep understanding of the Army's requirements for these critical platforms. Analyzing past spending would provide context on the typical volume and value of delivery orders under this contract and Oshkosh's performance in meeting those demands.

How does the pricing of this delivery order compare to similar tactical vehicle procurements by the Department of Defense?

Direct comparison of pricing for this specific $101.3 million delivery order is difficult without detailed unit cost breakdowns and the exact specifications of the trucks and trailers procured. However, the FHTV IV contract utilizes a Fixed-Price Incentive (FPI) structure. This means that while there's a target cost and target profit, the final price can fluctuate based on actual costs incurred, up to a ceiling price, with both the government and contractor sharing in any deviations from the target. Benchmarking would involve comparing the per-unit cost of similar vehicles (e.g., heavy-duty cargo trucks, specialized trailers) procured under different contract types (e.g., Firm-Fixed-Price, Cost-Plus) by the Army or other branches. The FPI structure aims for better cost control than purely cost-reimbursement contracts but may be more expensive than a Firm-Fixed-Price contract if costs escalate significantly.

What are the key performance indicators (KPIs) and risk mitigation strategies associated with the FHTV IV contract?

Key performance indicators for the FHTV IV contract likely revolve around delivery schedules, vehicle reliability, performance specifications (e.g., payload capacity, off-road mobility, survivability features), and quality standards. The Fixed-Price Incentive (FPI) contract structure itself is a risk mitigation strategy, sharing cost overruns between the government and contractor, thereby incentivizing efficiency. Additional risk mitigation strategies may include detailed inspection and acceptance criteria, warranties, and performance bonds. The government's oversight by program managers and contracting officers is crucial for monitoring performance against KPIs and addressing any emerging risks proactively. Contractor performance history and adherence to production schedules are also critical factors.

What is the strategic importance of the Family of Heavy Tactical Vehicles (FHTV) program to the U.S. Army's operational capabilities?

The FHTV program is strategically vital as it provides the backbone for the U.S. Army's logistics and sustainment operations. These heavy-duty trucks and trailers are designed to transport personnel, equipment, ammunition, and supplies across diverse and challenging terrains, including combat zones. They are essential for maintaining operational readiness, enabling troop movement, and supporting forward-deployed forces. The FHTV platforms are built for durability, survivability, and mobility, ensuring that the Army can sustain its missions effectively, regardless of the operational environment. Modernizing this fleet through contracts like FHTV IV ensures that the Army maintains a technological edge and the logistical capacity to execute its global mission requirements.

Are there any known issues or concerns regarding Oshkosh Defense LLC's performance on previous FHTV contracts or similar military vehicle programs?

Oshkosh Defense LLC has a long and generally positive track record with the U.S. military, particularly concerning the Family of Heavy Tactical Vehicles (FHTV) program across its iterations (FHTV, FHTV II, FHTV III, and now FHTV IV). They are a primary supplier of tactical wheeled vehicles. While specific issues on any large, long-term government contract can arise, such as minor delivery delays or technical adjustments, Oshkosh has consistently demonstrated the capability to produce and deliver these complex vehicles. Publicly available data and contract performance reports generally reflect successful execution of their obligations. Any significant performance concerns would typically be reflected in contract modifications, performance reviews, or potential disputes, which are not prominently highlighted in general contract award summaries for this program.

Industry Classification

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

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE INCENTIVE (L)

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, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $101,300,317

Exercised Options: $101,300,317

Current Obligation: $101,300,317

Actual Outlays: $27,876,484

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV15D0031

IDV Type: IDC

Timeline