DoD awards $560M for Joint Light Tactical Vehicle production, extending Oshkosh Defense contract through 2026

Contract Overview

Contract Amount: $560,467,040 ($560.5M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-15

End Date: 2026-09-25

Contract Duration: 1,106 days

Daily Burn Rate: $506.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACT W56HZV-23-C-0081 IS ISSUED AS AN ADDITIONAL CONTINUATION CONTRACT FOR JLTV PRODUCTION WITH OSK UNDER W56HZV-15-C-0095. THIS ACTION ALSO FUNDS A LEGACY JLTV ASL BUY.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $560.5 million to OSHKOSH DEFENSE LLC for work described as: CONTRACT W56HZV-23-C-0081 IS ISSUED AS AN ADDITIONAL CONTINUATION CONTRACT FOR JLTV PRODUCTION WITH OSK UNDER W56HZV-15-C-0095. THIS ACTION ALSO FUNDS A LEGACY JLTV ASL BUY. Key points: 1. Contract provides continued funding for Joint Light Tactical Vehicle (JLTV) production and a legacy JLTV Associated Support Logistics (ASL) buy. 2. The contract is a continuation of a previous award to Oshkosh Defense LLC, indicating a sustained need for these vehicles. 3. The award utilizes a Firm Fixed Price contract type, which shifts cost risk to the contractor. 4. The contract duration is 1106 days, spanning from September 2023 to September 2026. 5. This award falls under the Military Armored Vehicle, Tank, and Tank Component Manufacturing industry. 6. The contract was awarded under 'Full and Open Competition after Exclusion of Sources', suggesting a specific justification for limiting the competitive pool.

Value Assessment

Rating: good

The total contract value of $560.47 million for JLTV production over approximately three years appears reasonable given the specialized nature of military vehicle manufacturing. Benchmarking against historical JLTV production contracts would provide a more precise value-for-money assessment. However, the firm fixed-price nature of the contract helps control costs for the government. The inclusion of legacy ASL buys suggests a comprehensive approach to fleet support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition after Exclusion of Sources'. This designation implies that while competition was sought, specific circumstances or justifications led to the exclusion of certain potential sources. Further details on the exclusion justification would be needed to fully assess the competitive landscape. The limited nature of the competition may impact price negotiation.

Taxpayer Impact: The limited competition could potentially lead to higher prices for taxpayers if alternative, more cost-effective suppliers were excluded without sufficient justification. Transparency regarding the reasons for source exclusion is crucial for ensuring fair pricing.

Public Impact

The primary beneficiaries are the U.S. Army and Marine Corps, who will receive the Joint Light Tactical Vehicles. The contract ensures the continued production of essential tactical vehicles for military operations. The geographic impact is primarily centered around Oshkosh, Wisconsin, where the contractor is located, supporting local employment and the regional economy. Workforce implications include the continued employment of skilled labor in manufacturing, engineering, and logistics at Oshkosh Defense and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' in the competition type warrants further investigation to ensure maximum value for taxpayer dollars.
Lack of detailed breakdown on the legacy ASL buy versus new JLTV production makes it difficult to assess the specific value of each component.
The long-term sustainment costs and potential for future sole-source extensions are a potential concern for ongoing program affordability.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Continuation of an existing contract suggests a proven track record and established production capabilities.
The award supports critical military modernization efforts, ensuring the availability of essential equipment.

Sector Analysis

The defense manufacturing sector, specifically armored vehicle production, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and significant capital investment. This contract for JLTVs fits within the broader market for tactical wheeled vehicles, a segment crucial for modern military readiness. Comparable spending benchmarks would involve analyzing other large-scale vehicle procurement contracts within the Department of Defense, considering factors like unit cost, production volume, and technological sophistication.

Small Business Impact

The provided data indicates that small business participation (sb: false) and set-asides (ss: false) were not explicitly utilized in this specific contract award. This suggests that the primary focus was on fulfilling the JLTV production requirements with the incumbent contractor. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within Oshkosh Defense's supply chain for this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified vehicles. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Joint Light Tactical Vehicle (JLTV) Program
Family of Medium Tactical Vehicles (FMTV)
Mine-Resistant Ambush Protected (MRAP) Vehicles
Heavy Expanded Mobility Tactical Truck (HEMTT)

Risk Flags

Limited Competition Justification
Potential for Cost Overruns
Supply Chain Disruptions
Long-Term Program Affordability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $560.5 million to OSHKOSH DEFENSE LLC. CONTRACT W56HZV-23-C-0081 IS ISSUED AS AN ADDITIONAL CONTINUATION CONTRACT FOR JLTV PRODUCTION WITH OSK UNDER W56HZV-15-C-0095. THIS ACTION ALSO FUNDS A LEGACY JLTV ASL BUY.

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 $560.5 million.

What is the period of performance?

Start: 2023-09-15. End: 2026-09-25.

What is the historical spending trend for JLTV production under Oshkosh Defense?

Historical spending on JLTV production under Oshkosh Defense, prior to this $560.47 million award, would require a detailed review of previous contract modifications and awards under the primary contract W56HZV-15-C-0095. This current award represents a significant continuation and extension, indicating sustained investment in the JLTV program. Analyzing the cumulative spending over the life of the program, including initial development, testing, and full-rate production phases, is crucial for understanding the total financial commitment. Trends might show increasing or decreasing unit costs based on production volume, learning curve effects, and inflation. Without access to the full contract history, it's difficult to provide precise historical figures, but this award signifies a substantial ongoing expenditure.

How does the per-unit cost of the JLTV under this contract compare to previous awards or similar vehicles?

A direct per-unit cost comparison for the JLTV under this $560.47 million contract is challenging without knowing the exact number of vehicles being procured and the breakdown between new production and legacy ASL buys. However, the firm fixed-price nature of this award suggests that the unit costs have been negotiated and agreed upon. Generally, as production volumes increase and the contractor moves down the learning curve, per-unit costs tend to decrease. Comparing this contract's implied unit cost to earlier phases of the JLTV program or to other tactical vehicle programs (like the FMTV or older HMMWV variants) would require access to detailed pricing data from multiple contracts. Benchmarking against industry standards for similar armored vehicle production would also be necessary for a comprehensive assessment of value.

What are the specific risks associated with the 'Full and Open Competition after Exclusion of Sources' award type?

The primary risk associated with 'Full and Open Competition after Exclusion of Sources' is the potential for reduced competition, which could lead to higher prices for the government and taxpayers. This award type implies that a justification was made to exclude certain potential offerors from the competition. Risks include: 1) Limited innovation: Excluding potential competitors might stifle innovative solutions or alternative approaches. 2) Price inflation: Without a broader range of bidders, the incumbent or selected contractor may face less pressure to offer the most competitive pricing. 3) Protest vulnerability: The exclusion of sources can be a basis for contract protests, potentially delaying the award and increasing administrative costs. 4) Justification scrutiny: The government must have a robust justification for excluding sources, and if this justification is weak or contested, it could lead to legal challenges and reputational damage.

What is the expected impact of this contract on Oshkosh Defense's overall business and the defense industrial base?

This $560.47 million contract extension is significant for Oshkosh Defense, providing a substantial revenue stream and ensuring continued production of the JLTV through September 2025. It reinforces their position as a key supplier of tactical wheeled vehicles to the U.S. military. For the broader defense industrial base, this award signifies continued demand for armored vehicle manufacturing capabilities. It supports employment within Oshkosh Defense and its extensive supply chain, which includes numerous small and medium-sized businesses providing components and services. The sustained production also contributes to maintaining critical manufacturing skills and infrastructure within the U.S. defense industrial base, ensuring readiness for future defense needs.

Are there any performance metrics or key performance indicators (KPIs) publicly available for this JLTV production contract?

Publicly available performance metrics or Key Performance Indicators (KPIs) for specific defense production contracts like this JLTV award are typically limited due to security and proprietary considerations. While the contract itself will contain performance requirements related to delivery schedules, quality standards, and technical specifications, these are often detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not always released publicly. The Department of Defense does track contractor performance through systems like the Contractor Performance Assessment Reporting System (CPARS), but detailed reports are generally not accessible to the public. Success is implicitly measured by meeting delivery targets and quality requirements, with potential penalties or incentives tied to performance.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $9,802,057,934

Exercised Options: $560,504,899

Current Obligation: $560,467,040

Actual Outlays: $4,398,259

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline