DOD awards Oshkosh Defense $170M for FMTV variants, highlighting a significant investment in tactical vehicle sustainment

Contract Overview

Contract Amount: $170,236,612 ($170.2M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2024-05-24

End Date: 2027-03-31

Contract Duration: 1,041 days

Daily Burn Rate: $163.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MTV - OY7 ORDER FOR NUMEROUS VARIANTS OF FMTV VEHICLES.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $170.2 million to OSHKOSH DEFENSE LLC for work described as: MTV - OY7 ORDER FOR NUMEROUS VARIANTS OF FMTV VEHICLES. Key points: 1. Value for money appears reasonable given the scale and nature of the order for numerous vehicle variants. 2. Full and open competition was utilized, suggesting a healthy market for these specialized military vehicles. 3. Risk indicators are moderate, typical for large-scale vehicle production contracts with established prime contractors. 4. Performance context is tied to ongoing military operational needs and fleet modernization efforts. 5. Sector positioning places this contract within the broader defense industrial base for tactical wheeled vehicles.

Value Assessment

Rating: good

The contract value of $170.2 million for numerous FMTV variants suggests a substantial procurement. Benchmarking against similar large-scale vehicle orders within the Department of Defense indicates that the pricing is likely competitive, especially given the firm-fixed-price nature of the award. Oshkosh Defense's established role as a primary supplier for FMTV also suggests economies of scale may be leveraged, contributing to value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited. The specific number of bidders is not detailed, but this approach generally fosters competitive pricing and encourages innovation. The use of full and open competition suggests that the Army sought the best value from the available market for these critical vehicle variants.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most advantageous pricing and terms for a significant defense procurement.

Public Impact

The primary beneficiaries are the U.S. Army units that will receive these new FMTV variants, enhancing their operational capabilities. Services delivered include the production and delivery of numerous variants of Family of Medium Tactical Vehicles, crucial for logistics and troop transport. Geographic impact is national, with production likely centered in Wisconsin where Oshkosh Defense is located, and deployment across various Army installations. Workforce implications include sustained employment at Oshkosh Defense and its supply chain partners, supporting skilled manufacturing jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for production delays impacting operational readiness if manufacturing challenges arise.
Long-term sustainment costs for these vehicles need careful management beyond the initial procurement.
Dependence on a single prime contractor for a large volume of critical vehicles.

Positive Signals

Awarded under full and open competition, suggesting market validation of pricing and capability.
Firm-fixed-price contract structure provides cost certainty for the government.
Oshkosh Defense has a proven track record with the FMTV platform.

Sector Analysis

The defense industrial base for tactical wheeled vehicles is a critical component of military readiness. This contract falls within the Truck Trailer Manufacturing (NAICS 336212) sector, which encompasses the production of heavy-duty trucks and trailers. The market is characterized by a few large, established prime contractors capable of meeting stringent military specifications and production volumes. Spending in this area is driven by fleet modernization, replacement cycles, and evolving operational requirements.

Small Business Impact

While the prime contractor is Oshkosh Defense, a large entity, the contract details do not explicitly mention small business set-asides or subcontracting goals. However, large prime contractors typically engage small businesses within their supply chains for components and services. Further analysis would be needed to determine the extent of small business participation in this specific order.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and program managers responsible for the FMTV program. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified variants. Transparency is generally maintained through contract award databases, though specific performance metrics may be internal. The Defense Contract Audit Agency (DCAA) and the Department of Defense Office of Inspector General (DOD OIG) provide additional layers of oversight.

Related Government Programs

Family of Medium Tactical Vehicles (FMTV) Program
Tactical Wheeled Vehicle Fleet Modernization
U.S. Army Logistics Support Vehicles
Defense Logistics Agency (DLA) Procurement

Risk Flags

Potential for supply chain disruptions impacting delivery timelines.
Long-term sustainment cost uncertainty.
Dependence on prime contractor's production capacity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $170.2 million to OSHKOSH DEFENSE LLC. MTV - OY7 ORDER FOR NUMEROUS VARIANTS OF FMTV VEHICLES.

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 $170.2 million.

What is the period of performance?

Start: 2024-05-24. End: 2027-03-31.

What is Oshkosh Defense's track record with the FMTV program?

Oshkosh Defense has a long-standing and successful track record with the Family of Medium Tactical Vehicles (FMTV) program. They have been the primary manufacturer and sustainment provider for FMTV for many years, delivering thousands of vehicles to the U.S. Army and other military branches. Their experience encompasses various configurations and upgrades of the FMTV platform, demonstrating a deep understanding of the vehicle's design, production, and operational requirements. This established relationship suggests a lower risk profile for contract execution and a high likelihood of meeting performance expectations based on historical data.

How does the per-unit cost of these FMTV variants compare to historical data or market benchmarks?

Determining an exact per-unit cost is challenging without detailed breakdown of variants and quantities within the $170.2 million award. However, historical data for FMTV procurements often shows unit costs ranging from approximately $100,000 to $200,000 or more, depending on the specific variant (e.g., cargo, troop transport, recovery vehicle) and associated equipment. Given the scale of this order and Oshkosh's established production capabilities, the average unit cost is likely within this established range. The firm-fixed-price nature of the award provides a degree of cost certainty, but a detailed analysis would require access to the specific delivery order details and variant mix.

What are the primary risks associated with this large-volume vehicle production contract?

The primary risks associated with this contract include potential production delays due to supply chain disruptions, manufacturing complexities, or unforeseen technical issues. Ensuring consistent quality across a large number of vehicles is also a consideration. Furthermore, the long-term sustainment and maintenance costs of these vehicles, beyond the initial procurement, represent a significant financial commitment for the government. Dependence on a single prime contractor for a substantial portion of the medium tactical vehicle fleet also introduces a strategic risk if the contractor faces financial instability or production challenges.

How effective is the full and open competition process in ensuring value for this type of specialized defense procurement?

The full and open competition process is generally effective in ensuring value for specialized defense procurements like this FMTV order. It allows multiple qualified manufacturers to bid, fostering price competition and encouraging innovation in design and production. For the FMTV, which has a specific set of military requirements, this process helps the Army identify the best combination of technical capability, delivery schedule, and price. While Oshkosh Defense is a dominant player, the competitive process ensures their bid is market-driven and that taxpayers receive a fair price compared to what might be offered in a sole-source scenario.

What is the historical spending trend for FMTV vehicles by the Department of the Army?

Historical spending on Family of Medium Tactical Vehicles (FMTV) by the Department of the Army has been substantial and consistent over the past two decades. The Army has regularly procured new FMTV units and variants to modernize its fleet and replace aging vehicles. Annual spending can fluctuate significantly based on budget allocations, operational tempo, and specific modernization initiatives, often ranging from tens of millions to hundreds of millions of dollars per year. This $170.2 million award represents a significant, but not unprecedented, investment within this ongoing procurement strategy.

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: $229,726,806

Exercised Options: $170,236,612

Current Obligation: $170,236,612

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