"Everybody needs this, and one thing I get asked a lot is who needs the contract the most," said James Tinsley, managing partner of Avascent, a strategy and management consulting firm. Tinsley has worked for Oshkosh, Lockheed and a number of subcontractors on JLTV-related efforts at different phases.
The winning firm or team would build 17,000 vehicles for the Army and Marines in the first three years of low-rate initial production, followed by five years of full-rate production, according to a Congressional Research Service report.
The Army seeks a replacement for the Humvee that is as mobile, but with the same protection as a mine resistant ambush protected vehicle (MRAP).
The first Army unit would be equipped with the vehicles in fiscal 2018, and its acquisition would be complete in 2040. The Marine Corps would begin its buy at the start of production and finish in fiscal 2022.
Though full-rate production is set for 2018, defense executives have hedged in expectation of a possible protest, which would surely cause a delay. Lockheed CEO Marillyn Hewson, in a January call with investors, said the award date was uncertain because, "a lot of times protests emerge."
Jerry DeMuro, BAE Systems US-based CEO, expressed concern over defense budget uncertainty and the chance for protests. BAE Systems is a subcontractor to Lockheed Martin on JLTV.
"We think we have a very innovative approach, but it will be a hotly contested program," DeMuro said in an Aug. 1 earnings call. "I think the award decision is scheduled from the Department of Defense in late August, September time frame. After that, 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."
As the Army deliberates, each of the competitors have asserted that their offering provides the most capability at the best price.
"It has the least to lose and the least to gain," Tinsley said.
That view reflects the conventional wisdom. According to James Hasik, a senior fellow at the Brent Scowcroft Center on International Security:
"For Lockheed Martin, JLTV would be nice-to-have, and would clearly establish Lockheed as a company supplying kit to forces for land, sea, air and space," Hasik said. "Is that a good thing for the Defense Department? I'm not sure, but I understand Lockheed's motivation."
"Lockheed is essentially the only one in there since the first phase, and everyone else has had to fund development on their own," Tinsley said. "The government could be the most invested in Lockheed Martin solutions since they have fostered it and helped it through the years."
Kathryn Hasse, JLTV program director at the company's missiles and fire control division, in an emailed response to questions, also touted the company's clean-sheet design, "rather than taking an existing vehicle and trying to force-fit it into the requirements."
"Not only are we fully confident that we're ready to produce JLTVs, our customers are as well," Hasse said. "So this competition doesn't come down to Lockheed Martin's ability to manufacture a vehicle. That we can do. It comes down to which company will offer the best vehicle in terms of quality, performance and value. We believe that will be us."
Lockheed executives have expressed cautious optimism, however. Executive Vice President Bruce Tanner, in a July 20 earnings call, called the company's play for JLTV "maybe in some people's views, a little bit tougher putt because they do not necessarily associate Lockheed Martin with being in the combat vehicle business.
"But I think we have a tremendous offering there," Tanner said. "And it would put us into a new segment within the DoD that we do not have a lot of business, other than putting some of our weapons system on top of combat vehicles. This would be actually building the combat vehicle itself. It's exciting to be able to have that opportunity."
If the stakes are lowest for Lockheed, they are highest for AM General, according to Tinsley.The Army plans to retain Humvees in the fleet, and AM General will continue to sustain those and sell Humvees overseas, but Tinsley speculated — win or lose — it will not last long as an independent entity.
For years, the iconic Humvee has been AM General's life's blood. The company has manufactured more than 280,000 units since production began at its Mishawaka, Ind., plant in 1984. Though the Humvee has evolved several times over the years, the heavily armored MRAP came to dominance in Iraq and Afghanistan to offer better protection from improvised bombs. The JLTV will replace a third of the Army's Humvee fleet.
AM General officials vehemently disagree. Though JLTV is a high stakes competition for AM General, the company has worked to diversify itself and potentially insulate itself in the event that it loses. Chris Vanslager, AM General vice president for business development and program management, said, "JLTV is very important to us, and it is very important to us because it is very important to our customer," but added, "We have a very diverse company."
"Win or lose, the company is positioned to continue to grow," Vanslager said. "We're in growth positions with the Army, National Guard, foreign military sales and commercial sales, and the evidence is there in recent awards an announcements."
The Humvee will remain in the Army's inventory at least through 2030, though in diminishing numbers. Last year, the company won a $91 million contract to recapitalize up to 760 Army National Guard Humvees, which allowed the company to recall 200 laid-off workers to its Mishawka, Indiana, facility.
AM General's Humvee contracts in recent months include a $373 million foreign military sales contract in July, as well as a $246 million contract for Mexico last December and a $32 million contract for Humvees for Iraq in March.
In the competition, AM General's strength is its legacy as a high-volume manufacturer and maintainer of the Humvee, and its rumored position as the lowest bidder, Tinsley said. While Lockheed is betting the Army wants the most modern truck it can get, AM General is betting the Army will value a competitive price.
"From an operating cost perspective, that's where AM General will tell a story that the acquisition costs are minimal compared with the operating costs over time," Tinsley said.
The company's "hot supply chain," work force, and a global support network tied to international sales of the Humvee are all plusses for the Army, Vanslager said.
"We're the trusted partner that our customer can depend on, and we're ready to produce right now. We're offering the best value that instantiates the most capability at the cost target."
Oshkosh, like AM General, argues that its business is diversified enough to thrive should it lose. It maintains an enviable business in heavy and medium tactical vehicles, and according to company reps, significant international opportunities.
"JLTV, it is the big dog, but isn't the only program," said John Bryant, Oshkosh senior vice president of defense programs. "We're doing business at Oshkosh and building trucks right now."
"Oshkosh could definitely use this, but it's hardly essential to survival," Hasik said. "If Oshkosh does get it, the company will be supplying heavy, medium and light trucks to both the US Army and the USMC. Troops will see Oshkosh bumpers wherever they look. That would be an impressive blanket of marketing."
Another defense analyst who asked not to be named said that if it loses JLTV, AM General will still have a strong position for future Humvee upgrades both in the US and internationally. Looking at the Army's long term budget and program plans, Oshkosh faces a significant drop off over the next few years.
"It really needs JLTV to fill that hole," the analyst said.
In the JLTV competition, Tinsley said he considers Oshkosh to be the middle choice, cost-competitive and experienced with heavy military trucks. The question is whether its bid will be lowest.
"AM General is the sedan and these guys are the heavy duty pickup truck, and those have different designs, approaches and operating costs," Tinsley said. "They're going to argue that they're better in that weight class, and Lockheed Martin can have all the computer models in the world, but they aren't going to be worth a damn, compared to our actual experience."
"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.
Bryant declined to discuss price, but said the company's strategy was not to be the cheapest vehicle.
"I don't know what we are, because I don't know our competitor's pricing by any means, but I do know we have the most capable and survivable light tactical vehicle that's ever been built," Bryant said.
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.