Oshkosh Corp. won the U.S. Postal Service contract to replace its fleet of aging mail trucks in a fair competition, and the company can quickly ramp up production of electric vehicles for the agency, according to its chief executive.
John Pfeifer, Oshkosh’s chief executive, provided the company’s perspective on the controversial contract during a conference call outlining its second-quarter financial results with industry analysts on April 28.
Duane Hughes, the chief executive of Workhorse Group, also address the issue during an earnings call on May 10.
The Postal Service awarded Oshkosh the contract – which could be worth more than $6 billion over its life – in February. The company beat out Workhorse Group, a small electric vehicle startup.
Workhorse is considering how to challenge the contract and has appealed to members of Congress to intervene in the award.
“We continue to operate under our NDA with the U.S. Postal Service. As previously disclosed, we requested pursuant to the publicly provided bid process rules, additional information from the U.S. Postal Service and had a scheduled face-to-face meeting with the USPS on March 3. We are continuing to evaluate our options and intend to continue to explore all avenues that are available to us,” Hughes told investors and analysts during the earnings call.
He declined to provide any more information, citing the confidentiality agreement Workhorse has with the Postal Service.
Under the terms of the deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of what the Postal Service is calling the “Next Generation Delivery Vehicle.”
The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production. About 10 percent of the vehicles would be electric.
The program covers the purchase of 50,000 to 165,000 units over 10 years.
The post office now uses about 140,000 Grumman Long Life Vehicles for its main delivery service. Manufactured from 1987 through 1994, they need to be replaced. A 2014 audit from the USPS inspector’s office found that the current fleet could only meet the agency’s delivery needs through the 2017 fiscal year.
Workhorse has argued that its electric-only offering fits with President Biden’s executive order directing federal officials to draw up plans to convert the federal government’s 645,000-vehicle fleet to “clean and zero-emission vehicles.” While that includes mail trucks, the Postal Service operates as an independent agency with its board of governors that decides how its funding is spent.
In the conference call, Pfeifer said Congress doesn’t have a role in selecting mail truck vendors.
“The U.S. postal service program funding is not subject to approval from Congress. So there is always some remote risk that Congress could exert some influence on the award, but that would be unprecedented, and it would have really no basis because we provided the absolute best solution for the U.S. postal service. And it does what everybody in Congress wants, I think, which is electrifies and makes the fleet zero emission over the life of the contract,” he said.