DoD awards $206.5M for trucks to Oshkosh Defense, highlighting potential value concerns

Contract Overview

Contract Amount: $206,513,991 ($206.5M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2023-03-08

End Date: 2026-10-31

Contract Duration: 1,333 days

Daily Burn Rate: $154.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MTV - OY6 ORDER FOR 1 TRUCK FOR ROMANIA

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $206.5 million to OSHKOSH DEFENSE LLC for work described as: MTV - OY6 ORDER FOR 1 TRUCK FOR ROMANIA Key points: 1. The contract's significant value raises questions about cost-effectiveness given the quantity. 2. Oshkosh Defense, a major player, secured this order, indicating established market presence. 3. The fixed-price nature of the contract shifts some cost risk to the government. 4. A long performance period suggests a need for sustained logistical support. 5. The award falls within the Truck Trailer Manufacturing sector, a critical defense supply chain component. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: fair

The total award of $206.5 million for a single truck order appears high, especially without knowing the exact quantity. Benchmarking against similar large-volume truck procurements or individual unit costs is difficult without more detail. However, the firm-fixed-price structure suggests the government has negotiated a ceiling price, but the overall value warrants scrutiny to ensure it represents good value for the taxpayer, particularly if the unit cost is inflated.

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 this competitive approach is generally favorable for price discovery and ensuring the government receives competitive offers. The agency's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for lower prices through robust bidding.

Public Impact

The primary beneficiaries are the U.S. Army units requiring specialized truck capabilities, likely for logistical support and operational deployment. The contract delivers essential tactical vehicles, crucial for maintaining military readiness and operational effectiveness. The geographic impact is primarily focused on the U.S. Army's global operations, with potential implications for deployment to regions like Romania. The award supports jobs within Oshkosh Defense and its supply chain, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High total contract value for potentially a single item type requires detailed cost breakdown to ensure value.
Long contract duration (over 3 years) could lead to cost overruns if not managed tightly.
Firm-fixed-price contract means the government bears the risk of cost increases if not adequately scoped.
Lack of specific quantity makes it hard to assess per-unit cost and overall value for money.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Oshkosh Defense is an established manufacturer with a track record in military vehicle production.
The contract specifies a firm-fixed-price, which helps in budget predictability.
The award is for a specific need (truck for Romania), indicating targeted procurement.

Sector Analysis

The defense sector relies heavily on specialized vehicle manufacturers like Oshkosh Defense for its logistical and tactical mobility needs. This contract falls within the broader manufacturing and transportation equipment sector, specifically focusing on heavy-duty trucks. The market for military vehicles is often characterized by a few key large players due to high R&D costs and stringent performance requirements. Comparable spending benchmarks would typically involve analyzing the unit costs of similar military truck platforms procured by various branches of the U.S. military or allied nations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false, ss: false). This suggests that the primary award went to a large business, Oshkosh Defense. While large prime contracts can sometimes lead to subcontracting opportunities for small businesses, the absence of a specific set-aside or explicit subcontracting goals in the provided data means the direct impact on the small business ecosystem is unclear. Further analysis of the contract's subcontracting plan would be necessary to assess its implications for small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver the specified goods within the agreed-upon price. Transparency is facilitated by the contract award notice, but detailed cost breakdowns and performance metrics would require further access to contract documentation. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Wheeled Vehicles
Logistics Support Vehicles
Heavy Equipment Transport
Military Truck Procurement
Foreign Military Sales Support

Risk Flags

High Total Contract Value
Lack of Specific Quantity Detail
Potential for Overpricing
Long Performance Period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $206.5 million to OSHKOSH DEFENSE LLC. MTV - OY6 ORDER FOR 1 TRUCK FOR ROMANIA

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 $206.5 million.

What is the period of performance?

Start: 2023-03-08. End: 2026-10-31.

What is the specific quantity of trucks being procured under this $206.5 million order?

The provided data does not specify the exact quantity of trucks being procured under this $206.5 million order. The description 'MTV - OY6 ORDER FOR 1 TRUCK FOR ROMANIA' is ambiguous; '1 TRUCK' could refer to a single unit type or a placeholder for a larger quantity order. Without the specific quantity, it is impossible to accurately assess the per-unit cost or the overall value proposition of the contract. This lack of detail is a significant gap in understanding the financial implications and efficiency of this procurement.

How does the per-unit cost compare to similar military truck procurements?

A direct per-unit cost comparison is not feasible without knowing the exact quantity of trucks ordered. The total award is $206.5 million. If '1 TRUCK' implies a single, highly specialized vehicle, the cost could be justified by unique capabilities or extensive customization. However, if it represents a batch order, the implied per-unit cost would be extremely high compared to standard military truck procurements. Benchmarking against other Oshkosh Defense products or similar platforms from competitors like AM General or Navistar would require knowing the specific model and configuration of the truck and the quantity purchased.

What are the specific performance requirements and technical specifications for these trucks?

The provided data does not detail the specific performance requirements or technical specifications for the trucks. The description 'MTV - OY6 ORDER FOR 1 TRUCK FOR ROMANIA' suggests they are intended for the U.S. Army (MTV likely refers to Medium Tactical Vehicle or similar) and destined for Romania, implying a need for robust, potentially all-terrain capabilities suitable for military logistics. However, without access to the full contract or Statement of Work (SOW), details regarding payload capacity, mobility features, survivability enhancements, or mission-specific equipment are unknown. These specifications are crucial for evaluating the necessity and suitability of the procured assets.

What is Oshkosh Defense's track record with similar large-value military vehicle contracts?

Oshkosh Defense LLC has a significant and established track record in producing military vehicles for the U.S. Department of Defense and allied nations. They are well-known for their Family of Medium Tactical Vehicles (FMTV), Heavy Expanded Mobility Tactical Trucks (HEMTT), and Joint Light Tactical Vehicles (JLTV). The company has consistently secured large-scale contracts for these platforms, indicating a strong capability and market position. Their history suggests they are a reliable supplier for complex military vehicle requirements, though the specific nature and value of past contracts would need to be compared to this current award to fully assess its context.

What are the potential risks associated with a firm-fixed-price contract for specialized vehicles?

A firm-fixed-price (FFP) contract, while offering budget certainty, carries specific risks, especially for complex or specialized items like military vehicles. For the government, the primary risk is paying a premium if the contractor's initial cost estimates were overly conservative or if unforeseen market fluctuations occur that the contractor successfully mitigates. If the contractor encounters unexpected technical challenges or cost increases beyond their control, they may face financial losses, potentially impacting delivery schedules or future willingness to bid competitively. Conversely, the contractor benefits from retaining any cost savings if they can deliver below the fixed price. For this specific contract, the risk lies in ensuring the fixed price adequately covers the required specifications and that the government isn't overpaying due to a lack of detailed quantity information.

How does this award fit into the broader context of U.S. military aid or equipment provisioning to Romania?

This award, designated for Romania, likely falls under the umbrella of U.S. military assistance programs or Foreign Military Sales (FMS). Such procurements aim to enhance the capabilities of allied nations, strengthen interoperability, and support geopolitical objectives. The specific truck model and its intended role would dictate its contribution to Romania's defense posture. Understanding the broader context requires examining U.S. Department of Defense and State Department initiatives related to security cooperation with Romania, including any specific defense strategies or agreements that necessitate this type of equipment transfer or purchase.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $206,513,991

Exercised Options: $206,513,991

Current Obligation: $206,513,991

Subaward Activity

Number of Subawards: 125

Total Subaward Amount: $12,275,042

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV18D0010

IDV Type: IDC

Timeline