WASHINGTON, Sept 14 (Reuters) – Electric vehicle company Workhorse Group (WKHS.O) voluntarily dismissed on Tuesday its legal challenge against a U.S. Postal Service (USPS) move to award a multibillion-dollar contract to Oshkosh Defense (OSK.N) for delivery vehicles.

The 10-year contract announced in February could be worth more than $6 billion andallows for delivery of between 50,000 and 165,000 vehicles. Workhorse had proposed building an all-electric vehicle fleet for USPS, while Oshkosh plans a mix of internal combustion-powered and battery-electric vehicles. read more

Workhorse’s legal challenge, filed in June, had been set to face arguments before a judge on Wednesday on the U.S. Court of Federal Claims.

Workhorse and Oskhosh did not immediately respond to requests for comment late Tuesday. USPS declined immediate comment.

Lawyers for the Justice Department in July had filed a motion to dismiss Workhorse’s challenge, citing its “admitted failure to exhaust mandatory administrative remedies,” according to court documents. Oshkosh filed a similar motion.

Workhorse later argued that USPS’s administrative remedies violated the U.S. Constitution, the Justice Department said, but it argued that “Workhorse has forfeited its newfound…challenge by failing to raise it before the Postal Service.”

Postmaster General Louis DeJoy has committed to at least 10% of the fleet’s being electric vehicles, but has said that with government assistance the USPS could commit to making a majority of the fleet electric within 10 years.

Congress is considering providing USPS billions to speed the adoption of EVs. Earlier this month, a U.S. House of Representatives panel approved $2.4 billion for USPS to buy new EV postal trucks and build charging infrastructure.

Reporting by David Shepardson; Editing by Muralikumar Anantharaman and Leslie Adler

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