DoD awards $261M sole-source extension for Oshkosh tactical vehicles, raising value-for-money questions

Contract Overview

Contract Amount: $26,109,629 ($26.1M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-05-26

End Date: 2024-01-31

Contract Duration: 980 days

Daily Burn Rate: $26.6K/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 $26.1 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. The contract extension for Family of Heavy Tactical Vehicles (FHTV) IV was awarded on a sole-source basis, limiting competitive pressure. 2. Oshkosh Defense, LLC, the incumbent contractor, secured this extension, suggesting a reliance on established relationships. 3. The firm-fixed-price structure aims to control costs, but the lack of competition may hinder optimal price discovery. 4. Performance context is limited as this is an extension of an existing contract, not a new award. 5. The contract falls within the Truck Trailer Manufacturing sector, supporting the Department of the Army's logistical needs. 6. No small business set-aside was indicated for this significant sole-source award.

Value Assessment

Rating: questionable

This contract extension for heavy tactical vehicles was awarded to Oshkosh Defense, LLC, the incumbent. As a sole-source requirement contract with established range pricing, it is difficult to benchmark the value for money without more detailed pricing information and a competitive bidding process. The lack of competition raises concerns about whether the pricing reflects the best possible value for taxpayers compared to what might be achieved in a fully competed environment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source, requirements contract, meaning it was not competed. Oshkosh Defense, LLC was the sole provider for this extension. The lack of competition means there were no other bidders to compare against, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The government's ability to negotiate favorable terms is reduced when only one vendor is considered.

Public Impact

The U.S. Army benefits from continued access to heavy tactical vehicles essential for logistical operations. This contract ensures the supply of critical vehicles for military deployment and support. The primary geographic impact is within the Department of Defense's operational theaters. The contract supports jobs at Oshkosh Defense, LLC, primarily located in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of transparency in sole-source negotiations can obscure true value for money.
Reliance on a single supplier may create long-term dependency and reduce flexibility.

Positive Signals

Firm-fixed-price structure provides cost certainty for the government.
Extension ensures continuity of supply for critical tactical vehicles.
Established range pricing may offer some level of cost control.

Sector Analysis

This contract falls within the broader defense industrial base, specifically supporting the manufacturing of heavy tactical vehicles. The Truck Trailer Manufacturing (NAICS 336212) sector is crucial for military logistics. Comparable spending benchmarks would typically involve analyzing other large vehicle procurement contracts within the Department of Defense, but sole-source awards make direct comparisons challenging. The market for specialized military vehicles is often concentrated among a few key manufacturers.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, though Oshkosh Defense may engage small businesses as subcontractors in its broader supply chain.

Oversight & Accountability

As a sole-source contract extension, oversight mechanisms would typically rely on the Department of Defense's internal contract management and auditing processes. Transparency is limited due to the non-competitive nature. Accountability rests with the contracting officers to ensure the established range pricing is adhered to and that the vehicles meet specifications. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
Potential for non-optimal pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 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 $26.1 million.

What is the period of performance?

Start: 2021-05-26. End: 2024-01-31.

What is the historical spending trend for the Family of Heavy Tactical Vehicle (FHTV) program with Oshkosh Defense?

The provided data indicates this is an extension (OY6-OY8) of the FHTV IV contract, suggesting a long-standing relationship. While specific historical spending for prior years (OY1-OY5) is not detailed here, the nature of requirements contracts implies ongoing procurement over several years. The total value of this three-year extension is approximately $261 million. To understand the full historical trend, one would need to examine prior delivery orders and contract modifications under FHTV IV and potentially earlier FHTV iterations. This extension suggests consistent demand and successful performance from Oshkosh Defense, but also highlights a lack of competitive re-evaluation for a significant period.

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

Direct comparison of pricing is challenging due to the sole-source nature of this FHTV IV extension and the proprietary nature of established range pricing. Typically, competitive bidding allows for robust price benchmarking against other offers and market rates. Without a competitive process, it's difficult to ascertain if Oshkosh Defense's pricing is optimal. Analysis would require access to detailed cost breakdowns and comparisons with other government contracts for similar vehicle classes, considering factors like quantity, specifications, and contract duration. The firm-fixed-price structure provides cost certainty but doesn't inherently guarantee the lowest possible price without competition.

What are the key performance indicators (KPIs) for this contract, and how has Oshkosh Defense performed against them historically?

The provided data does not specify the key performance indicators (KPIs) for this FHTV IV extension. However, for tactical vehicle contracts, common KPIs often include on-time delivery rates, vehicle reliability and uptime, adherence to technical specifications, and warranty performance. As this is an extension of an existing contract, it implies that Oshkosh Defense has met the minimum performance requirements to warrant the extension. A deeper dive into contract performance reports, past performance reviews, and any award or incentive fees would be necessary to fully assess their historical performance against specific metrics.

What is the risk associated with relying on a sole-source provider for such a critical military asset?

The primary risk associated with a sole-source provider like Oshkosh Defense for heavy tactical vehicles is reduced leverage for the government in price negotiations and potential complacency from the contractor. This can lead to higher costs over time compared to a competitive environment. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain, especially during geopolitical instability or unforeseen global events. There's also a risk of technological stagnation if the sole provider does not face competitive pressure to innovate. However, sole-sourcing can ensure continuity and leverage specialized expertise when only one entity possesses the necessary capabilities.

Are there any plans for future competition or re-evaluation of the FHTV program?

The provided data focuses solely on the three-year extension (OY6-OY8) of the FHTV IV contract and does not contain information regarding future competition plans. Typically, the Department of Defense aims to compete contracts at the end of their performance periods to ensure best value. However, for specialized or highly integrated systems like tactical vehicles, follow-on contracts may sometimes be sole-sourced if the incumbent possesses unique capabilities or if transitioning to a new vendor would be prohibitively expensive or disruptive. Further investigation into the Department of the Army's long-term vehicle strategy and procurement forecasts would be needed to determine future competition prospects.

What is the total value of the FHTV program over its lifecycle, including this extension?

The provided data specifies the value of the FHTV IV extension (OY6-OY8) as approximately $261 million. It does not provide the total value of the entire FHTV program over its lifecycle, nor does it detail the value of previous contract years (OY1-OY5) or potential future contract periods. To determine the total lifecycle value, one would need to aggregate the values of all awarded delivery orders and contract modifications across all FHTV iterations since its inception. This information is typically available through federal procurement databases but is not present in the snippet provided.

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: $26,109,629

Exercised Options: $26,109,629

Current Obligation: $26,109,629

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