Department of the Army awards $65.5M sole-source contract for heavy tactical vehicles to Oshkosh Defense

Contract Overview

Contract Amount: $65,494,718 ($65.5M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2025-06-24

End Date: 2027-04-30

Contract Duration: 675 days

Daily Burn Rate: $97.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: FAMILY OF HEAVY TACTICAL VEHICLE IS A FIVE (5)-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT, SOLE SOURCE, REQUIREMENTS CONTRACT WITH CURVE PRICING. DELIVERY ORDER TO PROCURE 43 M1075A2S, 28 M1102A4S AND 29 M983A4S.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $65.5 million to OSHKOSH DEFENSE LLC for work described as: FAMILY OF HEAVY TACTICAL VEHICLE IS A FIVE (5)-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT, SOLE SOURCE, REQUIREMENTS CONTRACT WITH CURVE PRICING. DELIVERY ORDER TO PROCURE 43 M1075A2S, 28 M1102A4S AND 29 M983A4S. Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Fixed-price with economic price adjustment contract type introduces potential for cost escalation. 3. Procurement includes specific quantities of M1075A2, M1102A4, and M983A4 vehicle variants. 4. Oshkosh Defense LLC is the sole provider, indicating a lack of market competition for these specific platforms. 5. Contract duration extends through April 2027, with a significant portion of the value allocated to delivery orders. 6. The contract is categorized under Truck Trailer Manufacturing (NAICS 336212).

Value Assessment

Rating: fair

The total award amount of $65.5 million for 100 heavy tactical vehicles appears to be within a reasonable range for specialized military equipment, however, a direct comparison is difficult due to the sole-source nature of the award and the specific configurations of the vehicles. Without competitive bidding, it is challenging to definitively benchmark the value for money. The fixed-price with economic price adjustment (FPEPA) structure introduces a degree of uncertainty regarding the final cost, as it allows for adjustments based on economic factors.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one bidder, Oshkosh Defense LLC, was solicited. This approach is typically used when a unique capability or product is required, or when there is insufficient time to conduct a full and open competition. The lack of competition means that the Department of the Army did not benefit from the price discovery and potential cost savings that would typically arise from multiple bids.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. Sole-source awards can lead to higher costs compared to competitively sourced contracts.

Public Impact

The primary beneficiaries are the U.S. Army units requiring heavy tactical vehicles for logistical support and operational deployment. The contract will deliver 43 M1075A2s, 28 M1102A4s, and 29 M983A4s, crucial for transporting equipment and personnel. Geographic impact is national, supporting Army readiness across various operational theaters. Workforce implications are primarily within Oshkosh Defense's manufacturing facilities, potentially supporting skilled labor in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Economic price adjustment clause introduces risk of cost overruns.
Lack of competition may hinder innovation and broader market development.
Specific vehicle variants procured may not reflect the most cost-effective solutions available across the market.

Positive Signals

Oshkosh Defense is a known entity with established production capabilities for these vehicles.
Contract ensures timely delivery of critical tactical assets to the Army.
Fixed-price component provides some cost certainty for a portion of the contract value.

Sector Analysis

The defense industrial base for tactical vehicles is a specialized sector dominated by a few key manufacturers. Oshkosh Defense is a significant player in this market, particularly for heavy and medium tactical wheeled vehicles. The market size for such specialized military equipment is driven by government procurement cycles and defense spending priorities. This contract fits within the broader category of military vehicle manufacturing, where innovation and reliability are paramount. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of military specifications and sole-source awards.

Small Business Impact

This contract does not appear to include a small business set-aside. Oshkosh Defense LLC is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a set-aside or specific subcontracting goals may limit opportunities for small businesses within the defense supply chain for this particular procurement.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded within the contract terms, including delivery schedules and specifications. Transparency is facilitated through contract award databases, though detailed pricing breakdowns for sole-source awards are often limited. The Inspector General for the Department of Defense may conduct audits or investigations as deemed necessary.

Related Government Programs

Family of Heavy Tactical Vehicles (FHTV)
Logistics Vehicle System Replacement (LVSR)
Joint Light Tactical Vehicle (JLTV)

Risk Flags

Sole Source Award
Economic Price Adjustment Clause
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.5 million to OSHKOSH DEFENSE LLC. FAMILY OF HEAVY TACTICAL VEHICLE IS A FIVE (5)-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT, SOLE SOURCE, REQUIREMENTS CONTRACT WITH CURVE PRICING. DELIVERY ORDER TO PROCURE 43 M1075A2S, 28 M1102A4S AND 29 M983A4S.

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 $65.5 million.

What is the period of performance?

Start: 2025-06-24. End: 2027-04-30.

What is the track record of Oshkosh Defense LLC in delivering heavy tactical vehicles to the U.S. military?

Oshkosh Defense LLC has a long-standing and extensive track record of supplying heavy tactical vehicles to the U.S. military, including the Family of Heavy Tactical Vehicles (FHTV) program. They are the primary manufacturer for many of the Army's current heavy-duty truck platforms, such as the M1070 HET and the M1088 FMTV. Their experience includes producing vehicles designed for demanding operational environments, with a focus on reliability, mobility, and payload capacity. The company has consistently met delivery schedules and performance requirements for previous contracts, establishing itself as a trusted supplier for these critical assets. This established relationship and proven performance are key factors often considered in sole-source or limited-competition procurements.

How does the pricing of this contract compare to similar heavy tactical vehicle procurements, considering it's a sole-source award?

Directly comparing the pricing of this sole-source award to similar heavy tactical vehicle procurements is challenging due to the inherent limitations of non-competitive bidding. In a sole-source scenario, the government negotiates directly with the single available provider, Oshkosh Defense LLC. While the government aims for fair and reasonable pricing, the absence of competing offers means there is no market-driven price discovery. Historically, sole-source contracts can sometimes result in higher unit costs compared to those awarded through full and open competition, as the competitive pressure to offer the lowest price is removed. However, the specific configurations, technological advancements, and economic price adjustment clauses in this contract also influence the overall cost, making a simple per-unit comparison with other contracts potentially misleading without detailed analysis of specifications and market conditions at the time of each award.

What are the primary risks associated with a sole-source contract for heavy tactical vehicles?

The primary risks associated with a sole-source contract for heavy tactical vehicles include a lack of competitive pricing, which can lead to higher costs for the government and taxpayers. Without multiple bidders, there is reduced incentive for the contractor to offer the most cost-effective solution. Another risk is potential complacency from the sole provider, which could impact innovation or responsiveness to evolving requirements. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if Oshkosh Defense faces production issues, the Army's ability to procure these critical vehicles could be significantly disrupted. The absence of competition also limits the government's leverage in negotiating terms and conditions.

How effective is the fixed-price with economic price adjustment (FPEPA) contract type in managing costs for long-term vehicle procurements?

The Fixed-Price with Economic Price Adjustment (FPEPA) contract type attempts to balance cost certainty with flexibility for long-term procurements like this one. The 'fixed-price' component provides a baseline cost, offering some predictability. However, the 'economic price adjustment' (EPA) clause allows for modifications to the contract price based on fluctuations in specified economic factors, such as labor rates, material costs, or inflation indices. This can be beneficial in protecting both the contractor from unforeseen cost increases and the government from potentially losing a supplier if costs rise dramatically. The effectiveness hinges on the fairness and accuracy of the EPA formula and the government's ability to monitor and validate the adjustments. If not carefully managed, EPA clauses can lead to significant cost escalations beyond initial projections, diminishing the intended cost control.

What are the historical spending patterns for the Family of Heavy Tactical Vehicles (FHTV) program, and how does this award fit in?

Historical spending on the Family of Heavy Tactical Vehicles (FHTV) program has been substantial, reflecting the U.S. Army's continuous need for robust logistics and transport capabilities. The FHTV program, primarily managed by Oshkosh Defense, has seen consistent funding over many years, with individual contract awards often reaching tens or hundreds of millions of dollars for vehicle production and support. This $65.5 million award for specific delivery orders of M1075A2, M1102A4, and M983A4 variants represents a typical, albeit significant, tranche of funding within the broader FHTV lifecycle. It aligns with historical patterns of procuring these essential platforms to maintain fleet readiness and replace aging assets, indicating ongoing investment in this critical capability area.

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: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

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: $65,494,718

Exercised Options: $65,494,718

Current Obligation: $65,494,718

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $139,974

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W912CH24D0008

IDV Type: IDC

Timeline