DOD awards $89.8M sole-source contract for 96 heavy tactical vehicles to Oshkosh Defense

Contract Overview

Contract Amount: $89,751,552 ($89.8M)

Contractor: Oshkosh Defense LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-23

End Date: 2027-08-31

Contract Duration: 707 days

Daily Burn Rate: $126.9K/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 96 EA NEW PLS M1075A2S.

Place of Performance

Location: OSHKOSH, WINNEBAGO County, WISCONSIN, 54902

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $89.8 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 96 EA NEW PLS M1075A2S. Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Fixed-price with economic price adjustment structure may expose the government to cost fluctuations. 3. Delivery order for 96 vehicles indicates a specific, immediate need within the Army's fleet. 4. Oshkosh Defense LLC, the incumbent, likely possesses specialized knowledge and manufacturing capabilities for these vehicles. 5. The contract duration of approximately two years suggests a focused procurement rather than a long-term fleet modernization. 6. The absence of small business set-aside indicates a focus on specialized, large-scale manufacturing capabilities.

Value Assessment

Rating: fair

The contract's value of $89.8 million for 96 heavy tactical vehicles results in a per-unit cost of approximately $935,000. Benchmarking this against similar specialized military vehicle procurements is challenging due to the unique nature of the M1075A2S. However, the sole-source nature and fixed-price with economic price adjustment terms suggest potential for higher costs compared to a fully competed contract. The government is relying on the contractor's established pricing and potential for cost increases.

Cost Per Unit: Approximately $935,000 per vehicle (M1075A2S).

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of the Army identified Oshkosh Defense LLC as the only responsible source capable of meeting the government's requirements. This approach bypasses the standard competitive bidding process, which typically involves multiple bidders vying for the contract. Consequently, there is no direct comparison of pricing from competing firms to ensure the most advantageous price for the government.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from the price reductions and efficiencies that often arise from a competitive bidding environment. The government accepted the contractor's proposed pricing without the pressure of competing offers.

Public Impact

The U.S. Army benefits from the procurement of essential heavy tactical vehicles for its operations. These vehicles are critical for logistics, troop transport, and equipment movement in various operational environments. The procurement supports the Army's readiness and modernization efforts. The contract impacts the workforce at Oshkosh Defense LLC, primarily in Wisconsin, ensuring continued employment in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Fixed-price with economic price adjustment introduces risk of cost escalation.
Lack of competition may reduce incentives for contractor innovation or efficiency improvements.
Specific vehicle model (M1075A2S) may have limited commercial off-the-shelf alternatives, necessitating specialized procurement.

Positive Signals

Award to an established contractor (Oshkosh Defense) with proven experience in heavy tactical vehicles.
Procurement of specific, high-demand vehicles ensures operational readiness for the Army.
Contract includes economic price adjustment, which can protect the contractor from unforeseen material cost increases, ensuring supply continuity.

Sector Analysis

The heavy tactical vehicle market is a specialized segment within the broader defense manufacturing industry. Companies like Oshkosh Defense are key players, focusing on robust, mission-critical platforms. Spending in this sector is driven by military modernization programs, operational tempo, and the need to replace aging fleets. Comparable spending benchmarks are difficult to establish precisely due to the unique specifications and sole-source nature of many such procurements, but large tactical vehicle contracts can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not include a small business set-aside, reflecting the specialized and large-scale manufacturing capabilities required for heavy tactical vehicles. Oshkosh Defense LLC is a large business. There is no explicit mention of subcontracting requirements for small businesses within the provided data, suggesting that the primary focus is on the prime contractor's ability to deliver the specified vehicles.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and program managers responsible for tactical vehicle acquisition. Accountability measures are inherent in the fixed-price with economic price adjustment terms, requiring the contractor to meet delivery schedules and specifications. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

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
Fixed-price with economic price adjustment
Potential for cost overruns due to economic adjustments
Lack of competitive pressure on pricing and innovation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.8 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 96 EA NEW PLS M1075A2S.

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 $89.8 million.

What is the period of performance?

Start: 2025-09-23. End: 2027-08-31.

What is the track record of Oshkosh Defense LLC with the Family of Heavy Tactical Vehicles program?

Oshkosh Defense LLC has a long-standing and primary role as the manufacturer for the Family of Heavy Tactical Vehicles (FHTV) program. They have been the incumbent contractor for various iterations and upgrades of these vehicles, including the M1070 and M1075 series. Their extensive experience includes delivering thousands of vehicles to the U.S. military and allied nations. This deep involvement means they possess specialized knowledge of the design, manufacturing processes, and performance requirements critical for these heavy-duty platforms. Their consistent selection for FHTV contracts underscores their established capabilities and the government's reliance on their expertise for these essential logistics assets.

How does the fixed-price with economic price adjustment (FPEPA) clause impact the value for money in this contract?

The Fixed-Price with Economic Price Adjustment (FPEPA) clause introduces a degree of uncertainty regarding the final cost and thus impacts the value-for-money assessment. While it aims to protect the contractor from significant, unforeseen fluctuations in material and labor costs (ensuring supply continuity), it also shifts some of that risk to the government. If market prices for components or labor rise substantially during the contract period, the government will pay the increased costs. This contrasts with a firm fixed-price contract where the contractor absorbs such increases. Therefore, the ultimate value for money depends on the magnitude of these economic adjustments and whether they are justified by genuine market shifts rather than contractor inefficiencies.

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 include a lack of competitive pricing, potentially leading to higher costs for the government. Without competing bids, there is less incentive for the contractor to offer the lowest possible price or to innovate aggressively to reduce costs. Furthermore, reliance on a single source can create vulnerabilities if that contractor experiences production issues, financial instability, or supply chain disruptions. The government may also have fewer options if the contractor's performance is unsatisfactory. This situation can limit the government's leverage in negotiating terms and ensuring optimal value.

How does this specific delivery order for 96 M1075A2S vehicles fit into the broader Army logistics strategy?

This delivery order for 96 M1075A2S Heavy Expanded Mobility Tactical Trucks (HEMTTs) addresses a specific, immediate need for enhanced logistical transport capabilities within the U.S. Army. The M1075A2S is a variant of the Palletized Load System (PLS), designed to haul heavy payloads, including ammunition, water, and other essential supplies, often in challenging terrain. Procuring these vehicles ensures the Army maintains sufficient capacity for its operational tempo, supporting deployment readiness and sustainment operations. It likely represents a targeted replacement of aging assets or an augmentation of existing fleets to meet current operational demands, rather than a comprehensive fleet modernization initiative.

What are the historical spending patterns for the Family of Heavy Tactical Vehicles (FHTV) program?

Historical spending on the Family of Heavy Tactical Vehicles (FHTV) program, primarily with Oshkosh Defense, has been substantial and consistent over many years. The program typically involves multi-year contracts with numerous delivery orders for various truck configurations (e.g., M1070, M1080 series). Annual spending can fluctuate based on specific Army requirements, budget allocations, and the phasing of modernization efforts, often ranging from tens to hundreds of millions of dollars per year across all FHTV variants. The program's longevity and consistent funding reflect the enduring need for these robust logistical platforms in military operations.

What is the significance of the contract being a 'requirements contract'?

The designation of this contract as a 'requirements contract' means that the Department of the Army is committing to purchasing all of its actual requirements for the specified heavy tactical vehicles (M1075A2S) from Oshkosh Defense LLC during the contract period. This ensures that the Army will have a dedicated source for these critical vehicles. For the contractor, it provides a degree of demand certainty. However, as this is a sole-source requirements contract, the government is obligated to meet its needs through this single vendor, reinforcing the lack of competition and the importance of the initial pricing and terms negotiated.

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: $89,751,552

Exercised Options: $89,751,552

Current Obligation: $89,751,552

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $3,317,627

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