Department of Defense awards $26.7M for risk management testing, with Oshkosh Defense LLC securing the contract

Contract Overview

Contract Amount: $26,712,497 ($26.7M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-06-07

End Date: 2026-02-05

Contract Duration: 1,704 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SECOND DELIVERY ORDER OFF REQUIREMENTS CONTRACT W56HZV-21-D-0017 FOR RISK MANAGEMENT TESTING, SUPPORT SERVICES LABOR AND MATERIAL.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $26.7 million to OSHKOSH DEFENSE LLC for work described as: SECOND DELIVERY ORDER OFF REQUIREMENTS CONTRACT W56HZV-21-D-0017 FOR RISK MANAGEMENT TESTING, SUPPORT SERVICES LABOR AND MATERIAL. Key points: 1. The contract is a delivery order against an existing requirements contract, indicating a need for ongoing or recurring services. 2. The award to Oshkosh Defense LLC suggests a focus on specialized military vehicle support and testing. 3. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not closely managed. 4. The duration of the contract (over 1700 days) points to a long-term requirement for these services. 5. The specific nature of 'risk management testing' implies a critical function for ensuring equipment reliability and safety. 6. The absence of small business set-aside suggests the primary contractor is likely a large entity.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without more context on the scope of 'risk management testing' and support services. However, the Cost Plus Fixed Fee (CPFF) contract type warrants careful monitoring to ensure costs remain within reasonable bounds and that the fixed fee adequately compensates the contractor for their efforts without incentivizing excessive spending. Comparing this to similar testing and support contracts within the Department of Defense would provide a clearer picture of value for money.

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 submit proposals. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and service offerings for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a wider range of offers and encourages contractors to provide their best value propositions.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other branches of the Department of Defense requiring risk management testing for military vehicles. The services delivered include labor and material for risk management testing and support. The geographic impact is likely concentrated around the contractor's facilities and military testing sites, with potential implications for Wisconsin where Oshkosh Defense is based. Workforce implications include employment opportunities for skilled labor in testing, engineering, and support roles within Oshkosh Defense and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can present cost control challenges if not rigorously managed.
The broad scope of 'risk management testing' requires clear performance metrics to ensure effective service delivery.
Reliance on a single delivery order against a requirements contract may limit flexibility if needs change significantly.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
Oshkosh Defense LLC is an established defense contractor with experience in military vehicle manufacturing and support.
The contract addresses a critical need for risk management testing, contributing to equipment safety and readiness.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on military vehicle manufacturing and associated support services. The market for defense contracting is characterized by long-term relationships, specialized requirements, and significant government oversight. Spending in this area is driven by national security needs and the continuous modernization of military equipment. Comparable spending benchmarks would typically involve other contracts for vehicle testing, maintenance, and component manufacturing within the Department of Defense.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests the primary focus was on securing specialized capabilities likely held by larger, established defense contractors. While there's no direct set-aside, Oshkosh Defense LLC may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Army. Accountability measures are typically embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS, though detailed operational oversight specifics are often internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Vehicle Manufacturing
Defense Support Services
Risk Assessment and Management
Department of Defense Procurement
Army Combat Vehicle Programs

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration may expose the government to risks of obsolescence and market fluctuations.
Scope of 'risk management testing' needs clear definition and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to OSHKOSH DEFENSE LLC. SECOND DELIVERY ORDER OFF REQUIREMENTS CONTRACT W56HZV-21-D-0017 FOR RISK MANAGEMENT TESTING, SUPPORT SERVICES LABOR AND MATERIAL.

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 $26.7 million.

What is the period of performance?

Start: 2021-06-07. End: 2026-02-05.

What is the specific scope of 'risk management testing' covered under this contract?

The provided data does not detail the specific scope of 'risk management testing.' This typically involves evaluating potential failure points, safety hazards, and operational vulnerabilities of military equipment, likely focusing on armored vehicles given the contractor. It could encompass environmental testing, durability testing, performance under stress, and cybersecurity risk assessments. A more detailed statement of work (SOW) within the contract documents would clarify the precise nature and extent of these testing services, including methodologies, standards, and reporting requirements. Understanding the SOW is crucial for assessing the value and effectiveness of the services rendered.

How does the Cost Plus Fixed Fee (CPFF) structure impact cost control for this contract?

The Cost Plus Fixed Fee (CPFF) structure means the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for efficiency, the primary cost control mechanism relies on the government's ability to audit and approve the contractor's costs. If not managed diligently, CPFF contracts can lead to cost overruns as the contractor may have less incentive to minimize expenses compared to fixed-price contracts. Robust government oversight, clear definitions of allowable costs, and regular audits are essential to ensure cost-effectiveness under this type of agreement.

What is Oshkosh Defense LLC's track record with similar risk management or testing contracts?

Oshkosh Defense LLC is a well-established entity within the defense sector, primarily known for its production of military vehicles, including the Joint Light Tactical Vehicle (JLTV) and Family of Medium Tactical Vehicles (FMTV). While specific details on their history with 'risk management testing' contracts are not in the provided summary, their extensive experience in designing, manufacturing, and supporting complex military platforms suggests a strong capability in understanding and addressing the associated risks and testing requirements. Their track record likely includes significant testing and validation phases for their vehicle programs, indicating a relevant, albeit potentially broader, expertise.

How does this $26.7 million delivery order compare to overall Department of the Army spending on vehicle support?

This $26.7 million delivery order represents a specific allocation for risk management testing and support services. To contextualize it against overall Department of the Army spending on vehicle support, one would need to examine broader budget categories and contract databases. The Army's annual budget for procurement, research, development, testing, and evaluation (RDT&E), and sustainment of its vast vehicle fleet likely runs into billions of dollars. Therefore, this single delivery order, while substantial, is a component of a much larger spending ecosystem dedicated to maintaining and improving military vehicle readiness and capability.

What are the potential risks associated with the long contract duration (over 1700 days)?

A long contract duration, such as the over 1700 days for this delivery order, can introduce several risks. Technological obsolescence is a key concern; the equipment or testing methodologies may become outdated over the contract period. Furthermore, market conditions, material costs, and labor rates can fluctuate significantly, potentially impacting the cost-effectiveness of a long-term agreement, especially under a CPFF structure. There's also a risk of reduced contractor focus or innovation over time if performance incentives are not consistently applied. Finally, changes in military requirements or strategic priorities could render the services less relevant, necessitating contract modifications or termination.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oshkosh Corporation

Address: 2307 OREGON ST, OSHKOSH, WI, 54902

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: $26,712,497

Exercised Options: $26,712,497

Current Obligation: $26,712,497

Subaward Activity

Number of Subawards: 202

Total Subaward Amount: $163,612,699

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV21D0017

IDV Type: IDC

Timeline