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Lawmakers want new look at $6B USPS contract; Workhorse considering challenge

Under the USPS' awarded proposal, only 10 percent of the postal service's fleet vehicles would be electric. Lawmakers said that doesn't agree with President Joe Biden's plans for government fleet vehicles to become fully electric.
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WASHINGTON — Ohio Congressional members on Monday urged President Joe Biden to halt the U.S. Postal Service’s $6 billion contract award to a Wisconsin-based company to develop the next generation of USPS fleet vehicles.

Under the company’s proposal, only 10 percent of the postal service’s new vehicles would be electric. Lawmakers say that proposal doesn’t align with the Biden administration’s calls for a fully electric federal fleet.

U.S. Reps. Tim Ryan of Howland, D-13th, and Marcy Kaptur of Toledo, D-9th, and U.S. Sen. Sherrod Brown of Cleveland, D-Ohio, instead called for a review of whether the contract decision was affected by “inappropriate political influence” and whether the award is consistent with Biden’s pledge to convert the 650,000-vehicle federal fleet to battery power.

After repeated delays caused by the COVID-19 pandemic, the postal service awarded the contract to OshKosh Corp. last week, passing over the Cincinnati-based Workhorse Group, which has a close affiliation with Lordstown Motors Corp., as well as a 10-percent equity stake.

Though Lordstown Motors executives expected Workhorse would want to build the new postal service fleet vehicles at the company’s 6.2-million-square-foot headquarters, the former General Motors Lordstown Assembly Complex, a Lordstown Motors spokesperson said last week the company’s business model doesn’t rely on the postal service’s multi-billion-dollar order.

Postmaster General Louis DeJoy told a U.S. House committee last week 90 percent of the vehicles under OshKosh’s proposal would be powered by internal combustion engines.

Ryan, Kaptur and Brown in the Monday letter said that conflicts with Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad, which would leverage the U.S.’ leadership for international action on climate change.

“Furthermore, this contract is not only an investment in America workers and our domestic manufacturing sector, but it is an opportunity for our nation to regain its role as a leader in clean technology manufacturing,” the lawmakers wrote. “This contract will have consequences for decades to come and, as such, we have serious concerns it could be a wasted opportunity to address the climate crisis and the re-industrialization of our manufacturing sector.”

The postal service operates the largest fleet of federally owned vehicles, Ryan tweeted Sunday.

 

 

Workhorse Group announced last week it would seek more information on the decision. It’s set a meeting with postal service officials on Wednesday and is considering challenging the decision, Bloomberg reported Monday.

“The company intends to explore all avenues that are available to non-awarded finalists in a government bidding process,” reads the release from Workhorse.

Shares of Lordstown Motors Corp. (NASDAQ: RIDE) rose a slight 4.2 percent Monday to close at 20.16. After the postal service contract award was announced last week, they dropped 13 percent to close at $19.68.

Shares of Workhorse (NASDAQ: WKHS) rose 7.2 percent Monday to close at $17.34. They plummeted 47 percent last week.

Shares of OshKosh (NASDAQ: OSK) jumped about 12 points on Feb. 23, the day the contract award was announced, but have since leveled out. The stock gained 4.7 percent on Monday to close at $110.65.

Workhorse’s stake in Lordstown Motors was valued at nearly $320 million as of Feb. 26, according to information shared with investors Monday. That investment becomes liquid in April, according to the release.

Read the full letter from Ohio Congress members below:

Dear President Biden: 

We applaud you on your plan to help rebuild our nation’s manufacturing sector.  Your commitment to electrifying the federal fleet, strengthening our Buy American requirements, and strengthening our manufacturing supply chain are essential steps for helping us overcome the economic and environmental challenges we face.

That is, in part, why we are so troubled by the United States Postal Service (USPS) announcement that it has awarded an initial contract to provide up to 165,000 new postal vehicles over the next decade without any commitment to making these vehicles either hybrid or 100% electric. Further, before a House Committee on Oversight and Reform hearing, Postmaster General Louis DeJoy indicated that as the USPS replaces its fleet, he envisions only 10% to be electric vehicles. This stands in direct contrast to your commitment to transform the federal vehicular fleet.

Furthermore, this contract is not only an investment in America workers and our domestic manufacturing sector, but it is an opportunity for our nation to regain its role as a leader in clean technology manufacturing. This contract will have consequences for decades to come and, as such, we have serious concerns it could be a wasted opportunity to address the climate crisis and the reindustrialization of our manufacturing sector.

Postmaster General Louis DeJoy’s tenure has been a disaster for the American people and the USPS’s dedicated workforce. From ill-advised policies that have delayed the mail and life-saving medicines to seniors and veterans, to an utter disregard for the agency he leads. This week’s announcement further calls into question his judgment, his ability to effectively run the USPS, and his short-sightedness at this agency that plays a critical role in our nation. USPS can play a leading role in transforming our transportation sector and is well-positioned to take advantage of electric vehicles, both because of the typical daily range of the trucks and the technology available today. That is why USPS’s decision to go down this path is so deeply concerning.  

The tainted tenure of Postmaster General DeJoy calls into question the awarding of this contract. As such, the Administration and the USPS must delay the contract until a thorough review is conducted to determine: 1) there was not inappropriate political influence in the process, and 2) that the proposed contract is consistent with your Executive Order on Tackling the Climate Crisis at Home and Abroad. This contract is a multi-billion dollar opportunity to reimagine the federal fleet for the next generation and develop this critical domestic supply chain. We look forward to your response.



Justin Dennis

About the Author: Justin Dennis

Justin Dennis has been on the beat since 2011, covering crime, courts and public education. Dennis grew up in Poland and Salem and studied journalism and communications at Cleveland State University and University of Pittsburgh.
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