Pentagon nears award on new trucks for Afghanistan

WASHINGTON, June 25 Thu Jun 25, 2009 8:23pm EDT

WASHINGTON, June 25 (Reuters) - The Pentagon is nearing a contract award to one of four teams bidding to build thousands of armored off-road vehicles for use in Afghanistan, a program potentially worth billions of dollars to the winner.

An award for the Mine Resistant Ambush Protected All Terrain Vehicle (MRAP-ATV) is expected within days, probably early next week, said one industry executive, who asked not to be named because the competition was still ongoing.

U.S. defense officials have already said that the winning bidder should expect to share its design and subcontract with at least one losing bidder to quickly build vehicles for a U.S. military buildup in Afghanistan, said the executive.

Defense Secretary Robert Gates is a big fan of the MRAP armored vehicles, which feature a V-shaped hull to deflect roadside bombs, but the earlier versions are not maneuverable enough to deal with Afghanistan's difficult, mountainous terrain so the Pentagon is racing to buy a lighter version.

BAE Systems (BAES.L), Oshkosh Corp (OSK.N), Navistar International Corp (NAV.N) and Force Dynamics LLC, a joint venture between Force Protection Inc FRPT.O and General Dynamics (GD.N), are competing for the lucrative contract.

The Pentagon appears likely to meet its goal of awarding a contract by the end of June, said defense consultant Jim McAleese. He said the Pentagon expected to buy 5,244 vehicles for $12 billion in fiscal 2009 and 2010.

The Pentagon already has $1.7 billion in funding for the program from the fiscal 2009 budget, plus an additional $4.5 billion included in a supplemental war spending budget, which would allow quick orders of a large number of trucks, he said.

McAleese said the Pentagon decided to pick just one winning design to streamline logistics, given difficulties in getting weapons and supplies into Afghanistan, a land-locked country.

He said the Pentagon could stave off potential protests by ordering more trucks up front so that the winner bidder could award a sizable subcontract to one or more of the losing bidders.

The Pentagon's request for proposals said technical factors such as vehicle survivability and mobility would be the most important evaluation criteria in the competition, followed by delivery schedule and production capability, pricing and past performance. (Reporting by Andrea Shalal-Esa; Editing by Gary Hill)

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