Department of the Army awards $378M sole-source extension for Family of Heavy Tactical Vehicles to Oshkosh Defense

Contract Overview

Contract Amount: $37,847,795 ($37.8M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-04-29

End Date: 2025-11-30

Contract Duration: 1,676 days

Daily Burn Rate: $22.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV THREE YEAR EXTENSION (OY6-OY8) IS A FIRM-FIXED-PRICE (FFP) TARGET SOLE SOURCE, REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC WITH ESTABLISHED RANGE PRICING.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $37.8 million to OSHKOSH DEFENSE LLC for work described as: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV THREE YEAR EXTENSION (OY6-OY8) IS A FIRM-FIXED-PRICE (FFP) TARGET SOLE SOURCE, REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC WITH ESTABLISHED RANGE PRICING. Key points: 1. Contract awarded as a sole-source extension, limiting competitive opportunities and potentially impacting price discovery. 2. Firm-fixed-price structure provides cost certainty for the government, but requires careful monitoring of established range pricing. 3. The contract supports the sustainment of critical heavy tactical vehicles, essential for military operations. 4. Oshkosh Defense, LLC is the incumbent contractor, suggesting a reliance on established performance and supply chains. 5. The contract duration extends through November 2025, indicating a long-term need for these vehicles. 6. No small business set-aside or subcontracting requirements were noted, potentially limiting small business participation.

Value Assessment

Rating: fair

This contract is a sole-source extension, making direct price comparisons difficult. The firm-fixed-price target with established range pricing suggests an attempt to control costs within a known framework. However, without competitive bidding, it is challenging to definitively benchmark the value for money against market alternatives. The extended duration and significant dollar value warrant close scrutiny of the pricing mechanisms to ensure fair and reasonable costs over the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source extension, meaning it was not competed. The award to Oshkosh Defense, LLC indicates that the Department of the Army determined this contractor was the only source capable of meeting the requirements. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which typically drives down prices and fosters innovation.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the most competitive pricing that could have resulted from an open competition. This can lead to higher overall expenditures for the government.

Public Impact

The primary beneficiaries are the U.S. Army units that rely on the Family of Heavy Tactical Vehicles for logistical support and operational mobility. The contract ensures the continued availability and sustainment of critical heavy tactical vehicles, maintaining military readiness. The geographic impact is primarily within the United States, where Oshkosh Defense, LLC is located in Wisconsin, and potentially at military installations receiving these vehicles. Workforce implications include continued employment at Oshkosh Defense, LLC and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pressure on pricing and innovation.
Lack of small business participation noted, potentially missing opportunities for economic inclusion.
Long-term contract extension requires ongoing vigilance to ensure continued value for money.

Positive Signals

Firm-fixed-price structure provides cost predictability for the government.
Award to incumbent contractor suggests established performance and reduced transition risk.
Contract supports critical military equipment sustainment, ensuring operational readiness.

Sector Analysis

The defense industrial base relies heavily on specialized vehicle manufacturers like Oshkosh Defense. This contract falls within the broader industrial machinery and defense manufacturing sector. The market for heavy tactical vehicles is concentrated, with a few key players dominating. Benchmarking spending in this niche requires comparison to similar sustainment contracts for specialized military equipment, which are often awarded non-competitively due to unique requirements.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, nor were subcontracting requirements explicitly mentioned in the provided data. The award to a large prime contractor like Oshkosh Defense suggests that opportunities for small businesses would primarily be through the prime's subcontracting efforts, if any are planned. The absence of explicit set-asides means that small businesses did not have a direct avenue to compete for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which places cost risk on the contractor. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if performance issues arise.

Related Government Programs

Family of Medium Tactical Vehicles (FMTV)
Joint Light Tactical Vehicle (JLTV)
Heavy Equipment Transporter (HET)
Logistics Vehicle System Replacement (LVSR)

Risk Flags

Sole-source award limits competition.
Potential for cost overruns if range pricing is not well-managed.
Lack of explicit small business participation requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.8 million to OSHKOSH DEFENSE LLC. FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV THREE YEAR EXTENSION (OY6-OY8) IS A FIRM-FIXED-PRICE (FFP) TARGET SOLE SOURCE, REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC WITH ESTABLISHED RANGE PRICING.

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 $37.8 million.

What is the period of performance?

Start: 2021-04-29. End: 2025-11-30.

What is Oshkosh Defense's track record with the Family of Heavy Tactical Vehicle (FHTV) program prior to this extension?

Oshkosh Defense, LLC has been the incumbent contractor for the Family of Heavy Tactical Vehicles (FHTV) program, supplying these critical assets to the U.S. Army. Prior to this three-year extension (OY6-OY8), the company has a history of delivering these vehicles under previous contract phases. The award of extensions, especially sole-source ones, often implies satisfactory performance and a recognized capability to meet the Army's evolving needs for these specialized vehicles. However, specific performance metrics, delivery timelines, and quality control data from previous contract periods would be necessary for a comprehensive assessment of their track record beyond the general assumption of continued business.

How does the established range pricing in this sole-source contract compare to market rates for similar heavy tactical vehicles?

Directly comparing the established range pricing of this sole-source FHTV IV extension to current market rates for similar heavy tactical vehicles is challenging due to the unique nature of military procurement and the lack of competitive bidding. Military tactical vehicles often incorporate specialized armor, survivability features, and mission-specific configurations that differentiate them from commercial heavy trucks. Furthermore, sole-source awards inherently bypass the price discovery mechanism of open competition. While Oshkosh Defense is a recognized leader, the absence of competing bids means the 'market rate' is effectively defined by the negotiated range pricing with a single supplier. A true benchmark would require access to pricing data from comparable sole-source or limited-competition awards for similarly equipped vehicles, or detailed cost breakdowns from the contractor.

What are the primary risks associated with a sole-source extension for heavy tactical vehicle sustainment?

The primary risks associated with a sole-source extension for heavy tactical vehicle sustainment include potential for elevated costs due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a potential over-reliance on a single supplier which could create vulnerabilities in the supply chain. Without competitive pressure, the government may not achieve the best possible pricing or the most advanced technological solutions. There's also a risk that the contractor may not prioritize this contract if other, more lucrative opportunities arise. Ensuring fair and reasonable pricing through rigorous negotiation and oversight becomes paramount in sole-source situations to mitigate these risks.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this long-term tactical vehicle sustainment?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for long-term sustainment programs like the FHTV IV extension because it shifts the primary cost risk to the contractor. Oshkosh Defense is obligated to deliver the vehicles and services at the agreed-upon price, regardless of their actual costs. This provides the Department of the Army with significant cost certainty. However, the effectiveness is contingent on the initial price negotiation and the contractor's ability to manage their own expenses. For a sole-source award, the 'established range pricing' mechanism is crucial; if this range was not adequately negotiated or if unforeseen cost increases occur for the contractor, it could still lead to suboptimal value for the government, despite the FFP structure.

What are the historical spending patterns for the Family of Heavy Tactical Vehicles program, and how does this extension fit?

Historical spending patterns for the Family of Heavy Tactical Vehicles (FHTV) program would typically show consistent, significant investment over multiple contract phases, reflecting the ongoing need for these robust military platforms. Awards are often multi-year and can involve extensions or follow-on contracts to ensure continuous fleet readiness. This current $378 million, three-year extension (OY6-OY8) represents a continuation of this established spending trajectory. It indicates that the Army continues to rely on the FHTV platform and Oshkosh Defense's capabilities to sustain it, fitting within the expected pattern of long-term, substantial investment in critical heavy tactical vehicle fleets.

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

Financial Breakdown

Contract Ceiling: $37,847,795

Exercised Options: $37,847,795

Current Obligation: $37,847,795

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV15D0031

IDV Type: IDC

Timeline