Department of the Army awards $1.67B sole-source extension for Family of Heavy Tactical Vehicles to Oshkosh Defense

Contract Overview

Contract Amount: $16,707,207 ($16.7M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-22

End Date: 2024-01-31

Contract Duration: 861 days

Daily Burn Rate: $19.4K/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) 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 $16.7 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) 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 price discovery. 2. Oshkosh Defense, LLC is the incumbent contractor for this critical vehicle program. 3. The contract is a firm-fixed-price type, providing cost certainty for the government. 4. This award represents a significant investment in the Army's tactical mobility capabilities. 5. The contract duration spans over three years, indicating long-term sustainment needs. 6. The North American Industry Classification System (NAICS) code suggests a focus on truck and trailer manufacturing.

Value Assessment

Rating: fair

This contract is a sole-source extension, which inherently limits the ability to benchmark against competitive pricing. While the firm-fixed-price structure offers cost certainty, the absence of competition means that the established range pricing may not reflect the most advantageous market rates. Further analysis would be needed to compare the unit costs within the established range to similar heavy tactical vehicle procurements or historical pricing trends for Oshkosh Defense's products.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source extension to Oshkosh Defense, LLC. As a sole-source award, there was no open competition held for this specific extension. This approach is typically used when a specific contractor possesses unique capabilities or when continuing with an incumbent is deemed most advantageous for program continuity. The lack of competition means that price discovery through bidding was not a factor in this award.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing due to the absence of a competitive bidding process. The government relies on established range pricing, which may not be as aggressive as prices achieved through full and open competition.

Public Impact

Provides essential heavy tactical vehicles for the Department of the Army's operational readiness. Supports the logistical and mobility needs of U.S. Army forces. The contract is managed by the Department of the Army, indicating direct support for military operations. The contract is associated with the state of Wisconsin, potentially impacting the local economy and workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pricing advantages for taxpayers.
Lack of open competition may reduce pressure on the contractor to offer the lowest possible prices.
Reliance on established range pricing requires careful monitoring to ensure value.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Extension ensures continuity of supply for critical heavy tactical vehicles.
Oshkosh Defense is an established provider with a track record in this specific vehicle family.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on tactical vehicle manufacturing. The market for heavy tactical vehicles is dominated by a few key players, including Oshkosh Defense. This contract represents a significant portion of spending within this niche, ensuring the Army maintains its fleet of essential mobility platforms. Benchmarking would involve comparing this contract's value and terms to other large-scale tactical vehicle procurements by the Department of Defense or allied nations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Oshkosh Defense, LLC is a large business. There is no explicit information provided regarding subcontracting plans for small businesses within this specific award. Further review of the contract details would be necessary to ascertain any mandated small business subcontracting goals or achievements.

Oversight & Accountability

The contract is managed by the Department of the Army, which has established oversight mechanisms for its procurement processes. As a firm-fixed-price contract, the primary accountability lies in meeting the delivery schedule and specifications. Transparency is generally maintained through contract award databases, though specific details of the established range pricing and performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Family of Heavy Tactical Vehicles (FHTV)
Tactical Wheeled Vehicles
Military Truck Procurement
Department of Defense Vehicle Sustainment

Risk Flags

Sole-source award limits competitive pricing.
Potential for vendor lock-in due to sole-source nature.
Reliance on established range pricing requires careful monitoring for value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.7 million to OSHKOSH DEFENSE LLC. FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV THREE YEAR EXTENSION (OY6-OY8) IS A FIRM-FIXED-PRICE (FFP) 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 $16.7 million.

What is the period of performance?

Start: 2021-09-22. End: 2024-01-31.

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

The provided data indicates a recent extension valued at approximately $1.67 billion for contract years 6 through 8. To understand the historical spending trend, one would need to examine the contract awards and delivery orders for the preceding years (OY1-OY5) of the FHTV program. This would involve analyzing the total obligated amounts, the number of delivery orders issued, and any modifications or adjustments made to the contract over its lifespan. Comparing the average annual spending during the initial years to the projected spending under this extension would reveal whether the investment is increasing, decreasing, or remaining stable. Understanding these patterns is crucial for forecasting future budgetary needs and assessing the long-term commitment to this vehicle platform.

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

Directly comparing the 'established range pricing' to current market rates for similar heavy tactical vehicles is challenging without access to the specific pricing details within that range and a comprehensive market analysis. As a sole-source extension, the government is relying on pre-negotiated pricing. To assess value, one would need to benchmark these prices against publicly available data for comparable vehicles from other manufacturers or against Oshkosh Defense's own pricing for commercial variants or other government contracts. Factors such as vehicle configuration, payload capacity, survivability features, and technological advancements significantly influence price. A thorough benchmark would involve identifying vehicles with similar specifications and analyzing their acquisition costs, factoring in any differences in contract terms, quantities, and delivery schedules.

What are the key performance indicators (KPIs) used to measure the success of this contract and the performance of Oshkosh Defense?

While specific KPIs are not detailed in the provided summary, typical performance indicators for a contract of this nature, especially a firm-fixed-price requirements contract for tactical vehicles, would likely include: On-Time Delivery Rate: Ensuring vehicles are delivered according to the specified schedule. Quality Acceptance Rate: The percentage of delivered vehicles that meet all technical specifications and pass quality inspections without defects. Mean Time Between Failures (MTBF): A measure of vehicle reliability in operational conditions. Contractor Responsiveness: The speed and effectiveness with which Oshkosh Defense addresses any issues, provides technical support, or fulfills urgent requirements. Compliance with Contractual Terms: Adherence to all clauses, including warranty provisions and reporting requirements. The Department of the Army would monitor these KPIs to ensure mission readiness and contractor performance.

What is the potential impact of this contract extension on the overall readiness and modernization efforts of the U.S. Army?

This contract extension directly supports the U.S. Army's readiness by ensuring the continued availability and sustainment of its Family of Heavy Tactical Vehicles (FHTV). These vehicles are critical for logistics, troop transport, and various mission roles across different operational environments. By extending the contract, the Army maintains a consistent supply chain for these essential platforms, preventing potential gaps in its fleet. This continuity allows the Army to focus resources on other modernization priorities, such as advanced communication systems, next-generation combat vehicles, or unmanned systems, without being significantly hampered by a lack of fundamental mobility assets. The FHTV IV extension ensures that the current fleet remains operational and supported, contributing to overall force projection and response capabilities.

Are there any identified risks associated with relying on a sole-source provider like Oshkosh Defense for this critical vehicle program?

Yes, relying on a sole-source provider like Oshkosh Defense for the FHTV program presents several inherent risks. The primary risk is the lack of competitive pressure, which can lead to higher prices than might be achieved in a competitive environment. This also reduces the government's leverage in negotiations. Another risk is vendor lock-in; the Army becomes heavily dependent on Oshkosh Defense's technology, production capabilities, and pricing strategies. If Oshkosh Defense faces production issues, financial instability, or decides to significantly alter its business strategy, it could disrupt the Army's supply chain. Furthermore, the absence of competition may stifle innovation, as there is less incentive for the contractor to proactively develop and offer advanced solutions if the government's options are limited.

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: $16,707,207

Exercised Options: $16,707,207

Current Obligation: $16,707,207

Subaward Activity

Number of Subawards: 211

Total Subaward Amount: $17,795,777

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