Workhorse Says Postal Service Driver Error Pushed Truck Deal to Oshkosh

June 29, 2021 by Jerry Hirsch, @Jerryhirsch

Electric truck builder Workhorse Group called the U.S. Postal Service’s decision to award a giant contract for the next mail truck to a rival “arbitrary, capricious, and without rational basis” in a legal filing.

Originally filed under seal in the U.S. Court of Federal Claims, the complaint by the Loveland, Ohio, electric vehicle maker was partially unsealed this week. Workhorse wants the court to block the contract award or to instruct the Postal Service to make a new decision based on “rational best value analysis.”

The Postal Service announced Oshkosh Defense as the winner of the competition to build the mail truck in February. Under the terms of the initial deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of its mail truck offering. The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production.

The filing said Workhorse spent more than $6 million designing electric prototypes of a replacement mail truck as part of a formal bidding process but that that agency didn’t take its offering seriously following a mishap with a truck.

“It falsely blamed Workhorse’s prototype vehicle for a “safety incident” that was clearly the result of the USPS driver’s error. It engaged in discussions with Workhorse that improperly failed to meaningfully notify Workhorse of perceived deficiencies in its proposal and that misled Workhorse as to the areas Workhorse needed to address in its updated proposal,” the company said in its filing.

Oshkosh, which has Ford Motor Co. as a major supplier in the program, will assemble the new mail truck at a dedicated factory in Spartanburg, S.C.

A series of contracts are expected to approach $6 billion.

The post office wants to replace a fleet of about 140,000 Grumman Long Life Vehicles that it uses 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. They are also prone to fires, with several hundred burning up in recent years.

Workhorse’s proposal would have provided a fleet of electric vehicles. Although the Postal Service has considered using electric vehicles for its new fleet, just 10 percent of the vehicles in the Oshkosh contract would be electric, Postmaster General Louis DeJoy said at a Congressional hearing earlier this year. That percentage would allow the agency to test the technology and limit the cost of installing chargers at postal facilities.

In its complaint, Workhorse said the rendering of the Oshkosh mail truck depicts a vehicle that is entirely different than what the company had provided for testing during the competition.

“Even though ‘prototype performance’ was specifically identified as an evaluation subfactor, the USPS had selected a vehicle from Oshkosh that skipped the prototype phase altogether. This was especially puzzling given that Oshkosh has never previously produced a last-mile delivery vehicle, much less an electric one,” according to the complaint.

Workhorse said the Postal Service unfairly blamed its truck for a mishap that injured a worker evaluating the prototype.

“The USPS misleadingly claims that a flaw in Workhorse’s parking brake system caused Workhorse’s prototype vehicle to roll down an incline and into a ditch, injuring a test track driver,” Workhorse said.

The company said the USPS test track driver failed to put the prototype in park, leaving it shifted to the drive position. The driver then left the driver’s seat and walked to the cargo area. The unattended vehicle then rolled down a slope into the ditch.

“Rather than acknowledge the clear driver errors, the USPS not only disingenuously directed the blame at Workhorse but has seized upon this incident as its ‘posterchild’ reason it could not have awarded the contract to Workhorse,” the company said.

Oshkosh said it will continue to move forward with its contract despite the Workhorse complaint.

“Oshkosh Defense is aware that Workhorse Group has filed a bid protest with respect to the U.S. Postal Service’s award of the Next Generation Delivery Vehicle contract to Oshkosh. While bid protests are a normal part of the government contracting process, we do not comment on such proceedings,” the company said in a statement.

“The NGDV contract with Oshkosh Defense includes both zero-emission battery electric vehicles and fuel-efficient low-emission internal combustion engine vehicles and we have the resources and capabilities to deliver any mix the USPS orders,” it said.

The Postal Service declined to comment, citing its policy of not discussing litigation.

But in a statement, the agency said it also was looking forward to Oshkosh moving ahead with the contract. It said the first new trucks will go into operation in 2023.

Editor’s note: The headline was changed to reflect that Workhorse Group alleged a Postal Service driver’s error helped push the contract to Oshkosh.

Jerry Hirsch June 23, 2021
While there are encouraging developments at electric pickup truck startup Lordstown Motors, Wall Street is still flying the caution flag for the stock.

15 Responses

  1. Matt Maschinot

    After Workhorse contested the award the CEO of Oshkosh stated that they had won the contract fairly and that “we know how to big on government contracts”.

    I wonder know what that knowledge entails?!

    Reply
  2. Tyler Durden

    DeJoy is a criminal and should be put in prison for NUMEROUS offenses… awarding this fraudulent contract to OSHKOSH is only one of them!

    Reply
    • T

      Do you really think this decision was made by the postmaster himself? If so i got a bridge to sell….

      Reply
  3. Kenneth Fingeret

    Hello Everyone, My hope that Oshkosh produces zero working electric vehicles due to Postmistress Louie 16th Destroy/NUNJOY/DEjoy’s reduced budgets as too expensive to implement. After all non- resources are proven climate destroyers!

    Reply
  4. R

    Hmm, so a driver was able to move to the back of the vehicle, without securing something, the vehicle injured a test track worker. Because the postal service didn’t tell them that it was a bad thing. They shouldn’t be held responsible for not properly addressing the deficiency that allowed the incident to happen? Am I missing something here? Every car in America beeps at you when you are sitting in a seat and the seatbelt isn’t fastened. How difficult is it to apply a brake when the driver seat is empty? I know Unstoppable wasn’t the greatest Danzel Washington Movie but even I watched it.

    Reply
  5. Nan

    “…limit the cost of installing chargers at postal facilities” is not very supportive of nor proactively strategic, in light of a true commitment to reducing carbon emissions in my view.

    Reply
  6. Berri

    USPS should have delayed the bidding by just another year as further improvements and cost reductions take hold. No, but DeJoy couldn’t wait. He had his own agenda to feed instead of doing what’s best for USPS. I can’t stand the look of the Oshkosh design, it’s as ugly as DeJoys forehead.

    Reply
  7. Douglas Fehan

    Now that Oshkosh has purchased Pratt & Miller (of global racing and defense contracting fame) there is an endless supply of design and engineering expertise that simply doesn’t exist at Workforce.

    Reply
  8. L. Kimura

    How can the USPS conduct a two year test and evaluation and then award the whole contract to a supplier with the worst operations and maintenance costs but promises they can deliver a superior electric van sometime in the future if the USPS gives them money for research and development?

    Trying to eliminate Workhorse by claiming a dangerous design is also suspicious. EVs don’t make any noise when stopped. I think the driver thought the van was off and didn’t set the parking brake when he got out of the truck. If this was a frequently occurring problem then yeah, it’s a safety issue. But it happened only once, so driver error is a more plausible explication.

    I spent many years working in government procurement, first as a supplier and then with the government as a member of various procurement teams. If these allegations are true, I can tell you that I have never seen any procurement violate Federal Acquisition Regulations so blatantly. Something smells really bad here.

    Reply
  9. L. Kimura

    EVs don’t idle when stopped, the motors are off. Workhorse alleges the driver mistook the silence thinking he had placed the van in park. That’s a reasonable explanation since it only happened once in 24,000 miles of testing on six Workhorse prototypes.

    A more serious allegation is the USPS violated their own procurement rules. They did a two year fly off between the competitors and awarded the contract to Oshkosh for a van that was never tested, just on promises that if the USPS gives them a few hundred million dollars for development they will come up with something better.

    Workhorse also says the USPS was unfair on how they calculated the total cost of ownership. They claim the Oshkosh prototype that was tested had significantly higher costs over the life of the vehicle considering initial cost, fuel costs and maintenance costs. The say the USPS fudged the numbers by adding a highly bloated cost to convert the USPS garages to handle EVs. The USPS said it would cost $3-5 billion to do this, but Workhorse included a proposal from one of the nations largest electric utility saying they can do the entire conversion for $990 million. In addition the USPS did not include any part of this cost in the Oshkosh evaluation which claimed their vehicles could be retro fitted with an electric powertrain.

    Reply

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