WASHINGTON — The US Army awarded Oshkosh a contract to build its Humvee replacement, the Joint Light Tactical Vehicle (JLTV), the Army announced Tuesday. Oshkosh beat out Humvee-maker AM General and defense titan Lockheed Martin on the largest Army contract award in recent years that could be worth up to $30 billion.
With the JLTV, the Army and Marine Corps intend to restore flexibility and expeditionary capability lost when roadside bombs in Iraq forced the military to move from the lightweight Humvee to up-armored variants and heavily armored mine resistant ambush protected (MRAP) trucks, officials said.
The Army said the JLTV offers underbody and side-armor protection similar to Oshkosh's M-ATV, an MRAP, at about two-thirds of the weight, with a larger payload and greater reliability than a Humvee. It could be carried by a CH-47 Chinook, CH-53 heavy-lift helicopter and by amphibious vessels — a near impossible proposition for an MRAP.
"Really, the program has always been focused on restoring a baseline level of performance, protection, mobility and transportability," said Army Col. Shane Fullmer, JLTV project manager.
Army Col. John Cavedo, former JLTV project manager, said the survivability requirements were developed in the wake of the Iraq war. "The threats we were seeing in theater in the 2007 timeframe helped inform that dramatically," he said.
Oshkosh won a $6.7 billion low rate initial contract, a base contract with eight options to procure the first 16,901 vehicles for the Army and Marine Corps. All told, the manufacturer will produce 49,100 for the Army and 5,500 for the Marine Corps.
JLTV will be manufactured in Oshkosh, Wisconsin, with deliveries beginning 10 months after award. A full rate production decision is expected in fiscal 2018.
The three companies delivered 22 prototype vehicles each as part of engineering and manufacturing development contracts awarded in 2012.
The first Army unit will be equipped with the vehicles in fiscal 2018, and its acquisition will be complete in 2040. The Marine Corps will begin its buy at the start of production and finish in fiscal 2022.
Perhaps owing to the likelihood of a formal protest from one of the losing companies, the Army and Marine Corps — in a hastily assembled Pentagon press conference late Tuesday — adamantly refused to say why Oshkosh was selected over its competition.
Officials said the average unit cost, with full kit, is less than $400,000 and declined to provide a more precise estimate while an analysis was ongoing. The target cost for a base vehicle was $250,000.
Lockheed and AM General were notified via email of their final rankings and they may request a formal debrief from program officials. Each of the companies has an opportunity to protest in the coming weeks.
"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," an AM General spokesman said in a statement. "Our BRV-O provides world-class survivability features to soldiers and Marines while delivering unmatched vehicle payload and performance. 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."
Scott Davis, chief of Army Program Executive Office Combat Support & Combat Service Support, said "there is no expectation of a protest."
During an Aug. 1 earnings call, CEO of US-based BAE Systems Jerry DeMuro said: "We may go through a period of protest as is not unusual on a highly competitive program. So it will be some time before I think that one sorts it out." BAE Systems is a subcontractor to Lockheed on JLTV.
In a January call with investors, Lockheed CEO Marillyn Hewson said the award date was uncertain because "a lot of times protests emerge."
Lt. Gen. Michael Williamson told Inside the Army earlier this month the service is bracing for a protest after the service picks a vendor due to "declining resources and fewer opportunities for our vendors who have made an investment." In response, the Army sought to release a contract that is as "protest-proof" format as possible, he reportedly said.
Previous contract awards from the Pentagon, such as the Air Force's KC-X tanker program and its Light Air Support contract, saw heavy political pressure from representatives of the losing companies weigh in.
So the language used in a statement by Sen. Tom Cotton, R-Ark., a member of the Senate Armed Services Committee, is notable.
Cotton, who represents the Camden location where Lockheed would have produced the JLTV, said he was "disappointed" in the decision and indicated a willingness to use political pressure to wrestle the award away if Lockheed seeks to protest it.
"I am confident the work and infrastructure Lockheed Martin put in place to bid on this project will bring other economic benefits" he said in a statement. "And as Lockheed Martin explores their next steps, we stand ready to assist them however we can."
Before the award, James Tinsley, managing partner of Avascent, a strategy and management consulting firm, said Oshkosh was considered cost-competitive, experienced with heavy military trucks and the middle choice between AM General and Lockheed Martin. In the competition, it was up to Oshkosh, manufacturer of the M-ATV Mine Resistant Ambush Protected Vehicle, to argue that it was already the best in the weight class.
Oshkosh touted its vehicle as having the protection of its M-ATV, packaged in the L-ATV, which is about one-third lighter. John Bryant, Oshkosh senior vice president of defense programs, likened its Core 1080 crew protection system to that of a race car, which allows its driver to walk away from a horrific wreck.
In a confident interview before the award, Bryant cited the company's experience fielding the M-ATV and its ability to transition from development to production. Bryant said the company has done this for more vehicles than its competitors, is ready to do it immediately for the L-ATV and offers a "'no-risk seamless transition to production.
"We see the Oshkosh JLTV as the most capable and survivable tactical vehicle that's ever been built, and technically speaking, the Oshkosh JLTV — we've had the advantage because our M-ATV is the only vehicle performing the mission in theater right now," Bryant said.
Staff Writer Aaron Mehta contributed to this report.