Department of the Army awards $27.8M for Family of Heavy Tactical Vehicles IV, a five-year fixed-price incentive contract

Contract Overview

Contract Amount: $27,880,420 ($27.9M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2019-02-07

End Date: 2021-09-30

Contract Duration: 966 days

Daily Burn Rate: $28.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: FUNDS ORDER YEAR 4 TRUCKS 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, 54903

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to OSHKOSH DEFENSE LLC for work described as: FUNDS ORDER YEAR 4 TRUCKS FOR THE FAMILY OF HEAVY TACTICAL VEHICLES (FHTV) IV CONTRACT, A FIVE YEAR FIXED-PRICE INCENTIVE-FIRM, REQUIREMENTS CONTRACT. Key points: 1. Contract awarded to Oshkosh Defense LLC for essential tactical vehicles. 2. Fixed-price incentive contract type suggests shared risk between government and contractor. 3. Delivery order issued under a larger requirements contract indicates ongoing program needs. 4. Contract duration of 966 days points to a substantial, multi-year commitment. 5. The 'Truck Trailer Manufacturing' NAICS code suggests a focus on specialized vehicle production. 6. Lack of competition raises questions about potential cost efficiencies and market responsiveness.

Value Assessment

Rating: fair

The contract's value of $27.8 million for tactical vehicles appears reasonable given the specialized nature of military equipment and the fixed-price incentive structure. However, without direct comparisons to similar recent awards for comparable vehicle platforms or detailed cost breakdowns, a definitive value-for-money assessment is challenging. The incentive structure implies that cost savings achieved by the contractor could be shared, potentially benefiting the government, but the absence of competition limits the ability to benchmark pricing against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Oshkosh Defense LLC. The rationale for this approach is not provided in the available data. Sole-source awards can sometimes be justified for highly specialized or unique requirements where only one vendor can meet the need. However, the lack of competition typically leads to higher prices and reduced innovation compared to a fully competed procurement.

Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the most competitive pricing achievable through a bidding process. This could result in a higher overall cost for these tactical vehicles.

Public Impact

The U.S. Army benefits from the acquisition of critical heavy tactical vehicles. These vehicles are essential for troop transport, logistics, and various operational missions. The contract supports manufacturing operations and potentially jobs within the defense industrial base, specifically in Wisconsin. The delivery order contributes to the readiness and operational capability of Army forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit innovation and market responsiveness.
Absence of detailed cost data makes independent value assessment difficult.

Positive Signals

Fixed-price incentive contract structure can align contractor and government interests on cost control.
Award to an established defense contractor suggests a focus on proven capabilities.
Contract supports a critical military capability, enhancing national defense.

Sector Analysis

The defense sector, particularly the manufacturing of tactical vehicles, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long development cycles. Oshkosh Defense is a significant player in this market. This contract fits within the broader category of military vehicle procurement, which is a substantial segment of defense spending. Benchmarking this specific award is difficult without more granular data on vehicle configurations and quantities, but it represents a portion of the overall investment in tactical mobility.

Small Business Impact

The data indicates that small business participation (sb) was false and that the contract was not set aside for small businesses (ss). This suggests that the primary award went to a large defense contractor, Oshkosh Defense LLC. There is no information provided regarding subcontracting plans or opportunities for small businesses within this specific delivery order. Therefore, the direct impact on the small business ecosystem from this particular award appears limited, though the prime contractor may engage small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The fixed-price incentive contract type includes provisions for monitoring performance and costs, with potential adjustments based on achieved efficiencies. Transparency is generally maintained through contract awards databases, though detailed cost justifications for sole-source procurements may be less publicly accessible. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Family of Medium Tactical Vehicles (FMTV)
Heavy Tactical Vehicles (HTV)
Tactical Wheeled Vehicles
Military Truck Manufacturing
Defense Logistics Support

Risk Flags

Sole-source award
Lack of competition
Limited transparency on cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to OSHKOSH DEFENSE LLC. FUNDS ORDER YEAR 4 TRUCKS 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 $27.9 million.

What is the period of performance?

Start: 2019-02-07. End: 2021-09-30.

What is the track record of Oshkosh Defense LLC in delivering tactical vehicles to the U.S. military?

Oshkosh Defense LLC has a long-standing and significant track record of supplying tactical vehicles to the U.S. military, including various branches of the Army and Marine Corps. They are known for producing a wide range of vehicles, from light tactical trucks to heavy-duty platforms like the Family of Heavy Tactical Vehicles (FHTV) program, which this contract is part of. Their experience includes developing and manufacturing vehicles designed to withstand demanding operational environments, incorporating advanced protection, mobility, and survivability features. The company has consistently been a key supplier for major military vehicle programs, often winning large, multi-year contracts due to their established capabilities and production capacity. Their performance history generally indicates a strong ability to meet production schedules and technical specifications for complex military hardware.

How does the pricing of this contract compare to similar tactical vehicle procurements?

Directly comparing the pricing of this $27.8 million delivery order for the FHTV IV contract is challenging without specific details on the exact vehicle configurations, quantities, and associated support services included. Military vehicle procurements vary widely based on mission requirements, technological sophistication, and protection levels. However, given that this was a sole-source award, it is plausible that the pricing may be higher than if it had been competitively procured. Benchmarking against other large tactical vehicle contracts, such as those for the Family of Medium Tactical Vehicles (FMTV) or other heavy truck programs, would require access to detailed cost data and unit prices, which are often not publicly disclosed in full. The fixed-price incentive structure aims to control costs, but the lack of competition is a primary factor limiting price comparison.

What are the primary risks associated with this sole-source contract for tactical vehicles?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competition. When a contract is not competed, the government loses the benefit of price discovery that occurs in a competitive bidding environment, potentially leading to the contractor charging a premium. Another risk is reduced innovation, as the contractor may have less incentive to develop cost-saving efficiencies or introduce technological advancements if they are guaranteed the contract without facing market pressure. Furthermore, sole-source awards can create dependency on a single supplier, which could pose supply chain risks if the contractor experiences production issues or financial instability. Finally, the absence of competitive pressure might lead to less rigorous performance standards or slower delivery times, although the fixed-price incentive structure aims to mitigate some performance risks.

How effective is the Family of Heavy Tactical Vehicles (FHTV) program in meeting Army operational needs?

The Family of Heavy Tactical Vehicles (FHTV) program, including its various iterations like FHTV IV, is designed to provide the U.S. Army with a versatile and robust fleet of heavy-duty trucks essential for logistics, troop transport, and specialized missions. These vehicles are critical for supporting combat operations by enabling the movement of personnel, equipment, and supplies across diverse and often challenging terrains. The program aims to standardize heavy vehicle platforms, simplifying maintenance, training, and logistics support. While specific performance metrics for FHTV IV are not detailed here, the continued awarding of contracts under this program suggests its ongoing relevance and perceived effectiveness in meeting the Army's evolving operational requirements for heavy mobility and sustainment capabilities.

What are the historical spending patterns for tactical vehicle procurement by the Department of Defense?

Historical spending on tactical vehicles by the Department of Defense represents a significant and consistent portion of the overall defense budget, reflecting the military's reliance on mobile platforms for operations. Over the years, the DoD has invested billions of dollars in acquiring various classes of tactical vehicles, including light, medium, and heavy variants, as well as specialized platforms like mine-resistant ambush-protected (MRAP) vehicles. Spending fluctuates based on modernization needs, operational tempo, and specific program requirements, such as the transition from older vehicle fleets to newer, more capable ones. Major programs like the Family of Medium Tactical Vehicles (FMTV) and the Family of Heavy Tactical Vehicles (FHTV) have seen substantial, multi-year funding allocations. The trend generally shows a continuous need for these vehicles, with significant investments made to ensure fleet readiness and technological advancement.

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

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: $27,880,420

Exercised Options: $27,880,420

Current Obligation: $27,880,420

Subaward Activity

Number of Subawards: 52

Total Subaward Amount: $2,095,382

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