House lawmakers push Biden administration to investigate USPS contract with Oshkosh Defense

KEY POINTS

• The USPS in February awarded the first part of the 10-year, multibillion-dollar contract to update the postal delivery vehicle fleet to Oshkosh Defense.
• Shares of Workhorse Group, an Ohio-based electric-vehicle company that was competing for the contract, dropped by nearly 50% the next day.

United States Postal Service Postmaster General Louis DeJoy speaks during a House Oversight and Reform Committee hearing on Legislative Proposals to Put the Postal Service on Sustainable Financial Footing on Capitol Hill in Washington, DC, on February 24, 2021.

Jim Watson | AFP | Getty Images

House Democrats called on the Biden administration Tuesday to halt the U.S. Postal Service's $482 million contract with Oshkosh Defense to help modernize the service's aging fleet of delivery trucks until an investigation can prove there was no "inappropriate political influence" in the award.

Democratic Reps. Marcy Kaptur and Tim Ryan of Ohio and Jared Huffman of California introduced a resolution that would place a hold on the contract until an investigation is conducted. Kaptur said in a statement that the probe would also determine whether the contract is "consistent with the President's Executive Order to electrify the federal fleet."

The USPS announced on Feb. 23 that it awarded the first part of the 10-year, multibillion-dollar contract to update the postal delivery vehicle fleet to Oshkosh Defense. Shares of Workhorse Group, an Ohio-based electric-vehicle company that was competing for the contract, dropped by nearly 50% the next day and have barely recovered since then. The shares jumped by almost 8% on Tuesday, closing at $16.35.

A Workhorse Group spokesperson told CNBC that the company applauds "any efforts that support the Biden administration's goal of expanding the government's fleet of clean, non-combustion engine vehicles for the benefit of American tax payors and the environment." An Oshkosh representative didn't respond to CNBC's request for comment.

Under the contract, Oshkosh would, over the next decade, manufacture up to 165,000 postal vehicles, roughly a third of the federal government's fleet, according to the announcement. However, USPS chief Louis DeJoy recently told lawmakers that only 10% of the new fleet would be electric, which "would be inconsistent" with President Joe Biden's efforts to electrify the entire federal fleet, the lawmakers said.

According to the statement, lawmakers are also concerned about reports of "suspicious" stock trades that were placed just hours before DeJoy announced the deal.

"Ten percent makes no sense and flies in the face of President Biden's recent order to electrify the federal fleet," said Kaptur, who chairs the House Appropriations Subcommittee on Energy and Water Development and co-chairs the House Auto Caucus.

Shares of Oshkosh Corporation, the parent company of Oshkosh Defense, closed down slightly Tuesday.

— CNBC's Pippa Stevens contributed to this report.