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Lockheed, AM General May Protest JLTV Award

Defense contracting giant Lockheed Martin Corp. and Humvee-maker AM General LLC may protest the U.S. Army's decision to award a contract to truck-maker Oshkosh Corp. to build a Humvee replacement.

In separate statements after the Army awarded Oshkosh a $6.7 billion contract to build the first 17,000 production models of the Joint Light Tactical Vehicle, the losing bidders expressed disappointment that they weren't selected for the work.

Notably, they didn't rule out the possibility of filing a protest over the decision with the Government Accountability Office, which adjudicates contract disputes.

"The Lockheed Martin JLTV Team was disappointed to learn that the U.S. Army and Marine Corps did not select our JLTV," the company said in a statement.

"We believe we presented a very strong solution and await the customers' debrief to hear more detail regarding the reasons behind this selection before making a decision about a potential protest," it added.

AM General issued a similar statement.

"We are disappointed with the Government’s decision and continue to believe that AM General and our BRV-O vehicle are the right choice for the JLTV program, based on our best value offer which is backed by decades of LTV expertise and proven record as a trusted and reliable partner with the U.S. military," a spokesman said.

"Our BRV-O provides world-class survivability features to Soldiers and Marines while delivering unmatched vehicle payload and performance," the spokesman said. "We are very proud of our team's efforts and our BRV-O offering. At this time, we are reviewing the Government’s decision and are considering all available options."

The contract could eventually be worth some $30 billion, as the Army and Marine Corps plan to buy a total of nearly 55,000 of the vehicles, including 49,100 for the Army and 5,500 for the Corps, to replace about a third of the Humvee fleets.

That figure works out to about $559,000 per vehicle and includes expenses for research and development, overhead and add-on equipment such as radios, weapons and armor. Officials have said the cost of manufacturing the vehicle alone will be about $250,000.

Over the past decade, Oshkosh has gained a reputation among soldiers, Marines and military officials as a manufacturer of durable, highly protective trucks. The company produced thousands of blast-resistant vehicles called M-ATVs to better shield troops from roadside bombs in Afghanistan.

While the Humvee was developed in the 1980s as a light-duty utility truck, its vulnerability to improvised explosive devices and explosively formed projectiles, or EFPs, was exposed during the wars in Iraq and Afghanistan. The JLTV decision was a blow to AM General, which relies heavily on military sales to the U.S. and foreign customers.

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