Oshkosh shares fall 2% as Trump may cancel USPS electric vehicle contract

Oshkosh shares fall 2% as Trump may cancel USPS electric vehicle contract

Oshkosh Corporation's (NYSE: OSK) shares experienced a 2% decline on July 12, following reports that the U.S. Postal Service (USPS) might cancel its contract with the defense contractor for the supply of electric vehicles [1]. The controversy stems from a lawsuit filed by Workhorse Group Inc. (NASDAQ: WKHS), an electric vehicle manufacturer that lost the contract, alleging bias in the selection process [1].

The USPS, aiming to replace its aging fleet of gas-guzzling delivery trucks, announced plans to award the contract to Oshkosh in February, with an estimated value of up to $3.1 billion [1]. However, Workhorse, which also submitted a proposal, claims that the Postal Service favored Oshkosh despite the latter having less experience in manufacturing electric delivery vehicles [1].

According to the lawsuit, Workhorse alleges that the Postal Service "put its thumb on the scale" against the company, citing several instances of unfair treatment [1]. One such instance is the claim that Workhorse was penalized for a prototype that rolled out of control during testing, with the Postal Service driver reportedly failing to put the truck in park [1].

However, Jack Horan, an attorney specializing in government procurement law, notes that it might be challenging for Workhorse to prove such bias [1]. Horan teaches at Georgetown University Law School and has represented clients in similar situations.

The controversy surrounding the USPS electric vehicle contract has raised concerns among Congressional Democrats, who are skeptical of the plan's environmental impact and the selection process [1].

References:

[1] "Company That Didn't Win USPS Electric Vehicle Contract Is Suing The U.S. Postal Service," NPR, July 12, 2021, https://www.npr.org/2021/07/12/1015371368/company-that-wasnt-picked-to-make-mail-trucks-is-suing-the-u-s-postal-service.