DoD Awards Oshkosh Defense $888M for Heavy Tactical Vehicles, Sole Source Contract Raises Concerns
Contract Overview
Contract Amount: $88,864,131 ($88.9M)
Contractor: Oshkosh Defense LLC
Awarding Agency: Department of Defense
Start Date: 2022-05-19
End Date: 2024-04-30
Contract Duration: 712 days
Daily Burn Rate: $124.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV IS AN EIGHT-YEAR, FIXED-PRICE INCENTIVE FIRM (FPIF) (OY1-OY5) AND FIRM FIXED-PRICE (FFP) (OY6-OY8) SOLE SOURCE, REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC WITH ESTABLISHED RANGE PRICING.
Place of Performance
Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902
Plain-Language Summary
Department of Defense obligated $88.9 million to OSHKOSH DEFENSE LLC for work described as: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV IS AN EIGHT-YEAR, FIXED-PRICE INCENTIVE FIRM (FPIF) (OY1-OY5) AND FIRM FIXED-PRICE (FFP) (OY6-OY8) SOLE SOURCE, REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC WITH ESTABLISHED RANGE PRICING. Key points: 1. Sole source award to Oshkosh Defense for Family of Heavy Tactical Vehicles (FHTV) IV. 2. Contract includes fixed-price incentive and firm fixed-price elements over eight years. 3. Lack of competition for this significant vehicle program warrants scrutiny. 4. Spending benchmarks for tactical vehicle manufacturing should be reviewed against this award.
Value Assessment
Rating: questionable
The contract utilizes a mix of FPIF and FFP with established range pricing. While range pricing can offer some cost control, the sole-source nature limits the ability to benchmark against competitive offers, making a definitive value assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to drive down prices.
Taxpayer Impact: The sole-source nature of this large contract may result in taxpayers paying more than necessary due to the absence of competitive bidding.
Public Impact
Taxpayers may be overpaying for essential military vehicles due to lack of competition. The long-term nature of the contract could lock the DoD into potentially suboptimal pricing. Ensuring the FHTV IV meets critical operational needs is paramount despite the procurement method.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole Source Award
- Lack of Competition
- Long-Term Contract
Positive Signals
- Established Range Pricing
- Favorable Contract Type Mix
Sector Analysis
The Department of Defense frequently procures tactical vehicles. Spending benchmarks for similar truck and trailer manufacturing contracts (NAICS 336212) should be used to assess the reasonableness of this award, especially given its sole-source nature.
Small Business Impact
There is no indication that small businesses were involved in this sole-source award. Future opportunities should be explored to ensure small business participation in the defense supply chain.
Oversight & Accountability
The sole-source award necessitates robust oversight to ensure cost control and performance. The Department of Defense should actively monitor contract performance and pricing against any available benchmarks.
Related Government Programs
- Truck Trailer Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole Source Award
- Lack of Competition
- Potential for Overpricing
- Limited Transparency
- Long-Term Commitment
Tags
truck-trailer-manufacturing, department-of-defense, wi, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $88.9 million to OSHKOSH DEFENSE LLC. FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) IV IS AN EIGHT-YEAR, FIXED-PRICE INCENTIVE FIRM (FPIF) (OY1-OY5) AND FIRM FIXED-PRICE (FFP) (OY6-OY8) 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 $88.9 million.
What is the period of performance?
Start: 2022-05-19. End: 2024-04-30.
What is the justification for the sole-source award of the FHTV IV contract to Oshkosh Defense?
The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified by factors such as unique capabilities, urgent needs, or the unavailability of other sources. A thorough review of the justification documentation is necessary to understand the rationale and assess its validity.
How does the pricing structure (FPIF and FFP) mitigate risks in a sole-source environment?
The combination of Fixed-Price Incentive Firm (FPIF) and Firm Fixed-Price (FFP) aims to share risk. FFP provides cost certainty, while FPIF allows for price adjustments based on performance targets, potentially incentivizing cost savings. However, without competition, the baseline for these adjustments is less rigorously tested.
What is the potential long-term financial impact on the DoD and taxpayers given this sole-source award?
The long-term financial impact could be significant. A sole-source award lacks competitive pressure, potentially leading to higher unit costs over the contract's eight-year duration. Without competitive benchmarking, it's difficult to quantify the exact overpayment, but it represents a substantial risk to taxpayer funds.
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: $88,864,131
Exercised Options: $88,864,131
Current Obligation: $88,864,131
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
Start Date: 2022-05-19
Current End Date: 2024-04-30
Potential End Date: 2024-04-30 12:04:00
Last Modified: 2025-05-08
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