DoD awards $38.5M for armored vehicle components, with Oshkosh Defense securing the contract

Contract Overview

Contract Amount: $38,460,466 ($38.5M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-08-09

End Date: 2027-10-30

Contract Duration: 2,273 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Defense

Official Description: DELIVERY ORDER FOR ICLS MATERIALS IN THE FIRST ORDERING YEAR.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $38.5 million to OSHKOSH DEFENSE LLC for work described as: DELIVERY ORDER FOR ICLS MATERIALS IN THE FIRST ORDERING YEAR. Key points: 1. Contract value represents a significant investment in military vehicle sustainment. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract duration extends over several years, indicating long-term demand. 4. The award falls within the broad category of military vehicle manufacturing. 5. Oversight will be crucial given the extended performance period and value.

Value Assessment

Rating: good

The contract value of $38.5 million for armored vehicle components appears reasonable for a multi-year delivery order. Benchmarking against similar contracts for military vehicle parts is challenging without more specific component details. However, the pricing structure (Cost No Fee) suggests the government is bearing the cost of production, with the contractor's fee being a fixed amount, which can offer some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, potentially leading to better pricing and innovation. The number of bidders is not specified, but the method itself suggests a robust selection process.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for competitive pricing and ensures that the government is not limited to a single provider, thereby driving down costs.

Public Impact

The Department of the Army is the primary beneficiary, receiving critical components for its armored vehicle fleet. This contract supports the maintenance and readiness of military ground vehicles. The geographic impact is primarily centered around the contractor's operations in Wisconsin. It sustains jobs within the defense manufacturing sector, particularly in armored vehicle production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production costs exceed initial estimates under the Cost No Fee structure.
Dependence on a single contractor for critical components could pose supply chain risks if not managed proactively.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Long contract duration indicates a stable demand and potential for long-term partnership.
The contractor, Oshkosh Defense, has a significant track record in military vehicle manufacturing.

Sector Analysis

This contract falls within the broader defense industrial base, specifically the manufacturing of military armored vehicles and their components. The market for such specialized parts is often dominated by a few key players due to high barriers to entry, including technological expertise, manufacturing capabilities, and security clearances. Spending in this sector is driven by military modernization efforts and sustainment requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb: false). While Oshkosh Defense is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in supplying specialized materials or components. The extent of small business subcontracting will depend on the prime contractor's strategy and contractual obligations.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and program management offices. Given the multi-year duration and significant value, regular performance reviews, audits, and adherence to delivery schedules will be critical. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight details are not provided.

Related Government Programs

Military Armored Vehicle Manufacturing
Defense Logistics Agency (DLA) Procurement
Army Combat Systems
Tactical Wheeled Vehicles

Risk Flags

Potential for cost growth under CNF structure
Supply chain vulnerability for critical components
Contractor performance risk over extended period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.5 million to OSHKOSH DEFENSE LLC. DELIVERY ORDER FOR ICLS MATERIALS IN THE FIRST ORDERING YEAR.

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 $38.5 million.

What is the period of performance?

Start: 2021-08-09. End: 2027-10-30.

What is Oshkosh Defense's track record with similar military vehicle component contracts?

Oshkosh Defense LLC has a well-established and extensive track record in manufacturing military vehicles, including armored personnel carriers, joint light tactical vehicles (JLTVs), and heavy expanded mobility tactical trucks (HEMTTs). They are a primary contractor for numerous U.S. military programs. Their experience spans decades, encompassing design, production, and sustainment of complex military platforms. This history suggests a strong capability to fulfill the requirements of this contract for armored vehicle components. Past performance data, often available through government contract databases, would provide more granular detail on their success rates, delivery timeliness, and quality metrics for similar component supply agreements.

How does the $38.5 million value compare to typical spending on armored vehicle components?

The $38.5 million value for this specific delivery order is substantial but needs to be contextualized within the broader scope of military vehicle sustainment and production. Armored vehicle components can range from individual parts like engines and transmissions to specialized armor plating and electronic systems. A single delivery order of this magnitude could represent a significant portion of a specific component's annual requirement or a broader package of parts. Without knowing the exact nature of the 'ICLS Materials' (which likely refers to Integrated Command and Logistics Systems or a similar designation), direct comparison is difficult. However, annual defense spending on vehicle parts and sustainment runs into billions of dollars, making this award a notable but not extraordinary figure within that ecosystem.

What are the primary risks associated with this contract?

Key risks include potential production delays impacting vehicle readiness, cost overruns if the 'Cost No Fee' structure doesn't adequately account for fluctuating material or labor costs, and supply chain disruptions for critical components. There's also a risk related to technological obsolescence if the components are for older platforms and the need for upgrades arises. Furthermore, contractor performance issues, such as quality defects or failure to meet delivery schedules, could pose significant risks to military operations. The extended duration (ending in 2027) increases the exposure to these risks over time.

How effective is the 'Cost No Fee' pricing structure for this type of contract?

The 'Cost No Fee' (CNF) pricing structure is typically used when the contractor's primary role is manufacturing or assembly, and the government bears the cost of materials and direct labor. The contractor receives no profit or fee on the costs incurred. This structure can be effective in controlling costs when the government has strong oversight of the contractor's expenses and can accurately estimate material and labor requirements. However, it can disincentivize efficiency for the contractor, as they do not benefit from cost savings. For components, it shifts the financial risk of production cost fluctuations to the government, requiring robust government cost estimation and monitoring capabilities to ensure value.

What are the historical spending patterns for armored vehicle components by the Department of the Army?

The Department of the Army consistently allocates significant funding towards the sustainment and modernization of its armored vehicle fleet. Historical spending patterns show multi-billion dollar annual expenditures on ground vehicle procurement, modification, and spare parts. Contracts for components, like this one, are recurring needs. Spending fluctuates based on operational tempo, modernization programs (e.g., upgrades to Abrams tanks, Bradley Fighting Vehicles, or procurement of new platforms like the Optionally Manned Fighting Vehicle), and the lifecycle stage of existing fleets. Awards for specific component categories, such as engines, transmissions, tracks, or armor, are common and often awarded through competitive processes to major defense manufacturers.

What does the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' NAICS code imply about this contract?

The North American Industry Classification System (NAICS) code 336992, 'Military Armored Vehicle, Tank, and Tank Component Manufacturing,' specifically categorizes establishments primarily engaged in manufacturing military armored vehicles, tanks, and their essential components. This implies that the contract awarded to Oshkosh Defense is directly related to the production or supply of parts integral to these heavily armored military ground platforms. It signifies a focus on specialized, high-durability equipment designed for combat environments, requiring advanced manufacturing processes and materials.

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 NO FEE (S)

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: $38,460,466

Exercised Options: $38,460,466

Current Obligation: $38,460,466

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $7,232,805

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