Army awards $52.1M Oshkosh Defense contract for heavy tactical vehicles, with limited competition

Contract Overview

Contract Amount: $52,137,641 ($52.1M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2025-05-28

End Date: 2027-05-31

Contract Duration: 733 days

Daily Burn Rate: $71.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) FIVE-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (FPEPA) REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC. DELIVERY ORDER TO PROCURE 20 EA M983A4 LETS

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $52.1 million to OSHKOSH DEFENSE LLC for work described as: FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) FIVE-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (FPEPA) REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC. DELIVERY ORDER TO PROCURE 20 EA M983A4 LETS Key points: 1. Contract awarded to Oshkosh Defense, LLC, a sole-source provider for Family of Heavy Tactical Vehicles (FHTV). 2. The contract includes a delivery order for 20 M983A4 LET vehicles. 3. This contract is a fixed-price with economic price adjustment (FPEPA) type, which can lead to cost increases. 4. The contract duration is 733 days, ending May 31, 2027. 5. The Department of the Army is the primary agency, with the Department of Defense as the overarching entity. 6. The North American Industry Classification System (NAICS) code is 336212 (Truck Trailer Manufacturing).

Value Assessment

Rating: fair

The total award amount is $52,137,641. Given the sole-source nature of this award, a direct comparison to similar contracts is difficult. However, the fixed-price with economic price adjustment (FPEPA) structure introduces potential for cost escalation over the contract's duration, which warrants careful monitoring. The specific unit cost for the M983A4 LET vehicles is not explicitly detailed, making a precise value-for-money assessment challenging without further breakdown.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Oshkosh Defense, LLC. This approach is often used when a specific contractor possesses unique capabilities or when existing systems require proprietary support. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices through market forces.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as there is no direct market pressure to ensure the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the M983A4 LET heavy tactical vehicles. The contract delivers essential logistical and transport capabilities for military operations. The geographic impact is primarily within the United States, where the vehicles will be manufactured and potentially deployed from. Workforce implications include continued employment at Oshkosh Defense, LLC's facilities, particularly in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Fixed-price with economic price adjustment (FPEPA) introduces risk of cost escalation over the contract term.
Lack of competition may stifle innovation from other potential suppliers.
Specific performance metrics and delivery timelines for the 20 M983A4 LET vehicles are not detailed in the provided data.

Positive Signals

Award to Oshkosh Defense, LLC, a known entity for tactical vehicle manufacturing, suggests continuity and reliability.
The contract supports critical military logistics and operational readiness for the U.S. Army.
The FPEPA clause, while a risk, can also protect the contractor from unforeseen market fluctuations, ensuring supply.

Sector Analysis

The defense sector, specifically military vehicle manufacturing, is characterized by high barriers to entry and specialized production requirements. Oshkosh Defense is a dominant player in this niche. The market for heavy tactical vehicles is largely driven by government procurement, with limited civilian applications. Spending in this area is critical for national defense readiness and involves significant investment in research, development, and production capabilities.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and does not mention subcontracting plans for small businesses (sb: false). This suggests that the primary awardee, Oshkosh Defense, LLC, will likely perform the majority of the work. Consequently, there may be limited direct opportunities for small businesses through this specific contract, and the impact on the broader small business ecosystem in this sector is likely minimal unless Oshkosh Defense engages them as subcontractors independently.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and the Department of Defense's Inspector General. Accountability measures are inherent in the fixed-price with economic price adjustment (FPEPA) contract type, which requires adherence to specified terms and conditions. Transparency is facilitated through contract award databases, though detailed performance reporting may be internal to the agency.

Related Government Programs

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

Risk Flags

Sole-source award
Economic Price Adjustment clause introduces cost escalation risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.1 million to OSHKOSH DEFENSE LLC. FAMILY OF HEAVY TACTICAL VEHICLE (FHTV) FIVE-YEAR FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (FPEPA) REQUIREMENTS CONTRACT AWARDED TO OSHKOSH DEFENSE, LLC. DELIVERY ORDER TO PROCURE 20 EA M983A4 LETS

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 $52.1 million.

What is the period of performance?

Start: 2025-05-28. End: 2027-05-31.

What is Oshkosh Defense's track record with the Family of Heavy Tactical Vehicles (FHTV) program?

Oshkosh Defense, LLC has a long-standing and established track record with the Family of Heavy Tactical Vehicles (FHTV) program. They have been a primary contractor for various iterations and components of the FHTV, including the M983A4 LET. Their extensive experience suggests a deep understanding of the program's requirements, technical specifications, and operational needs. This history likely contributed to their selection for this sole-source award, as they possess the specialized knowledge and manufacturing capabilities essential for producing and supporting these complex military vehicles. Their continued involvement indicates a level of performance and reliability that meets the Army's standards for this critical equipment.

How does the $52.1M award compare to historical spending on FHTV contracts?

The $52.1 million award for this specific delivery order represents a portion of the overall spending on the Family of Heavy Tactical Vehicles (FHTV) program. Historical spending on FHTV contracts has been substantial, often spanning multiple years and encompassing numerous vehicle variants and support services. For instance, previous multi-year FHTV contracts awarded to Oshkosh Defense have been valued in the hundreds of millions, and sometimes billions, of dollars. This $52.1 million figure should be viewed in the context of a larger, ongoing procurement strategy. While this single award is significant, it is likely one of many orders placed under broader FHTV requirements contracts to sustain the fleet and meet evolving operational demands over time.

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

The primary risks associated with a sole-source award for tactical vehicles, such as this FHTV contract, revolve around cost and competition. Without a competitive bidding process, there is a reduced incentive for the sole contractor to offer the lowest possible price, potentially leading to higher costs for the government and taxpayers. Furthermore, sole-source awards can limit opportunities for innovation from other manufacturers who might offer alternative solutions or more cost-effective designs. Dependence on a single supplier can also create supply chain vulnerabilities if that contractor faces production issues or financial instability. Finally, the lack of competition can reduce transparency and make it harder to benchmark pricing against market alternatives.

How effective is the fixed-price with economic price adjustment (FPEPA) contract type for military vehicle procurement?

The Fixed-Price with Economic Price Adjustment (FPEPA) contract type is employed in military vehicle procurement to balance cost certainty with protection against market volatility. For the government, the 'fixed-price' component aims to establish a baseline cost. However, the 'economic price adjustment' (EPA) clause allows for upward (and sometimes downward) adjustments to the contract price based on specified economic factors, such as inflation or changes in the cost of raw materials. This can be effective in ensuring the contractor can maintain profitability and continue production during periods of significant economic fluctuation, thereby securing the supply of critical assets like tactical vehicles. However, it introduces risk for the government, as the final cost can exceed the initial fixed price, making precise budget forecasting more challenging.

What is the strategic importance of the M983A4 LET vehicle within the Army's logistics framework?

The M983A4 LET (Light Equipment Transport) is a crucial component of the U.S. Army's heavy tactical vehicle fleet, specifically designed for transporting and supporting various equipment, including Patriot missiles and other critical systems. Its strategic importance lies in its mobility, payload capacity, and ability to operate in diverse and demanding environments. As a tractor-trailer unit, it facilitates the movement of essential materiel across operational theaters, ensuring that combat units have the necessary support and munitions. The reliability and availability of vehicles like the M983A4 LET are fundamental to maintaining logistical momentum and overall combat effectiveness, making sustained procurement and maintenance of these platforms a high priority for the Army.

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: $52,137,641

Exercised Options: $52,137,641

Current Obligation: $52,137,641

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