U.S. specialty truck maker Oshkosh Corp on Tuesday won a contract worth up to $6.75 billion to build 17,000 armored light tactical vehicles to replace the aging Humvees used by the U.S. Army and Marine Corps, the U.S. Army announced Tuesday.
Oshkosh beat out a team made up of Lockheed Martin Corp and Britain’s BAE Systems Plc, as well as AM General, a privately held company that built the original Humvees, for a deal that could be worth $30 billion over time.
The two military services plan to buy a total of 55,000 of the Joint Light Tactical Vehicles, or JLTVs, to start replacing the current combined fleet of about 140,000 Humvees.
U.S. Army officials said they planned to maintain competition throughout the JLTV program, and the contract with Oshkosh included an option to buy the technical data rights to the new vehicles.
They said the firm, fixed-price terms of the contract would keep the program on track, and prevent the government from having to absorb any cost overruns.
Officials praised the Oshkosh vehicles but declined to give any details on why they chose them over rival bidders. Analysts had favored Oshkosh to win the contract, given its record in cranking out thousands of tailor-made mine-resistant, ambush-protected all-terrain vehicles, or M-ATV for U.S. troops in Afghanistan, a feat often lauded by top Pentagon officials.
Lockheed said it was disappointed by the decision and would await a briefing from government officials before deciding whether to protest the contract award. AM General said it was reviewing the decision and considering all options.
Oshkosh said it expected to start delivering the Humvee replacements to the military services in about 10 months.
The Marine Corps will get its 5,500 JLTVs early in the program, with the first group of vehicles expected to be ready for combat use in fiscal year 2018. The Army’s plans calls for a first combat-ready unit a year later.
“Today’s award brings us a step closer to delivering a flexible vehicle that balances the payload, performance, and protection critical in the operating environments of today and tomorrow,” said Navy acquisition chief Sean Stackley, who oversees Marine Corps acquisition programs.
Army acquisition chief Heidi Shyu said the new trucks would deliver major improvements in protected mobility for soldiers.
The Army announcement followed a high-level meeting of the Pentagon’s Defense Acquisition Board, led by chief arms buyer Frank Kendall, which approved the program to start low-rate production after 14 months of intense testing of 22 prototypes vehicles delivered by each of the competing teams.
The Army views the new vehicle as its highest priority program given how ubiquitous roadside bombs and other threats have become in recent years.
The U.S. military spent nearly $50 billion to buy and build over 27,000 armored mine-resistant, ambush- protected vehicles, or MRAPs, during the height of the wars in Iraq and Afghanistan. But it needs lighter, faster vehicles for the future.
The new JLTV aims to combine the protection of the MRAPs with the off-road mobility of the original Humvees, which were slowed considerably by the addition of protective armor. The Army also wants better communications gear for the trucks.
Charlie Szews, chief executive of Oshkosh, told Reuters last week he was upbeat about his company’s vehicle, which he said would offer the government exactly what it wanted: “the most vehicle they can get for under $250,000 in FY11 dollars.”
Szews said the Oshkosh JLTV was “fully loaded” and meets the Army’s high-end targets for performance, at or below the target price. He said the company also saw good prospects for future military sales and had several demonstrations planned for potential buyers next summer.