The U.S. Army and Marine Corps awarded Oshkosh, AM General and Lockheed Martin 27-month contracts to compete in the engineering and manufacturing development phase of the Joint Light Tactical Vehicle competition -- the last round before a winner is selected to build the Humvee replacement fleet.
Service officials surprised many by choosing AM General and Oshkosh over BAE Systems' and General Dynamics' bids considering BAE Systems and General Dynamics had taken part in the technology development phase of the program. AM General announced it's independent bid from General Dynamics just days before bids were due to compete for the EMD phase.
The announcement was made official when it was post on FedBizOps.gov, a government contracting website, Wednesday night. Many analysts and industry officials didn't expect the announcement until Friday.
The three winners will have 27 months to build 22 prototype trucks to be judged by the services. Army and Marine Corps leaders have stipulated the per vehicle truck price must fall under $250,000. Adjusting the price ceiling to under $250,000 was one of the major breakthroughs that kept the JLTV program alive when many thought it might be replaced by the Humvee Recapitalization program.
The Army plans to buy at least 50,000 vehicles and the Marine Corps plans to buy 5,000 more in one of the largest contracts available to defense companies as the Defense Department shrinks its modernization budget along with other planned spending cuts.
The three industry teams that entered the technology development phase of the competition included General Tactical Vehicles (General Dynamics and AM General); BAE Systems and Lockheed Martin; and Navistar and BAE Systems. Oshkosh announced it's intentions to bid on the EMD phase of the contract months before the March deadline.
Oshkosh, AM General and Navistar made last minute independent bids after the Army and Marine Corps submitted a new set of requirements in hopes of reducing the price and keeping Congress from canceling the program. Oshkosh and AM General's bids paid off.
AM General President and CEO Charles M. Hall highlighted "the 300,000 operational test miles and demonstrated high reliability and maintainability" of their offering, the Blast-Resistant Vehicle-Off Road. AM General is also the manufacturer who built the Humvee.
"AM General is uniquely focused on meeting the needs of the U.S. armed forces and our team is prepared to move forward," Hall said in a statement.
Ahead of the award announcement, Oshkosh officials invited a group of military journalists down to Stafford, Va., near their offices to ride in their vehicle offering, the Light Combat Tactical All-Terrain Vehicle (L-ATV). Many officials in the industry took notice of Oshkosh's confidence to host such an event before the Army and Marine Corps picked the winners.
“This vehicle is designed to provide MRAP level protection in a vehicle that is less than half the weight of existing MRAPs,” said John Bryant, vice president and general manager for Joint Marine Corps Programs at Oshkosh Defense.
Navistar's bet to submit their Saratoga vehicle independent from BAE Systems didn't pay off in the same way as AM General's. Leaders of the company hope the Saratoga will catch on in other countries.
"We still feel strongly about the capabilities of our Saratoga JLTV vehicle, which is designed to be delivered to market quickly with less investment than traditional defense programs, and we believe it is appealing to nations facing uncertain futures and limited budgets," said Elissa Koc, a Navistar spokeswoman, in a statement.