Military delays new truck awards until October

WASHINGTON (Reuters) - The U.S. military said on Tuesday it would put off winnowing the field of companies bidding for $10 billion in new truck orders until October.

The U.S. Army, which is leading a joint military acquisition program to replace some 170,000 Humvees, initially planned to announce in July which three of the six industry teams bidding for the work would receive technology development awards. Now those awards are expected in October.

Col. John Myers, project manager for Joint Combat Support Systems, said a budget reprogramming request approved by Congress for fiscal 2008 would provide additional funding to ensure the program stayed on track despite cost growth.

The extra funds were needed to pay for the technology development of a third vehicle, said Virginia-based defense analyst Jim McAleese, noting that the Army at one point had planned to narrow the field of competitors to two contractors.

The services are developing the Joint Light Tactical Vehicle (JLTV) program, a new family of vehicles that will be used by the Army, the Marine Corps and U.S. special forces.

Military officials want the vehicles to have some armor, network connectivity, and be light enough to be able to be transported by a range of aircraft, including helicopters.

Several big defense contractors are bidding for the work, which analysts say could be worth $10 billion longer term.

They include No. 1 contractor Lockheed Martin Corp, teamed with BAE Systems; Boeing Co together with Textron Inc; General Dynamics Corp paired with Humvee maker AM General LLC; and a separate bid by BAE in which it is teamed together with Navistar International Corp.

Force Protection and DRS Technologies are also bidding as a team, as is Northrop Grumman Corp, which is paired with specialty truck maker Oshkosh Corp.

McAleese said rising costs and the military's interest in fielding the trucks quickly made it likely the technology development contracts would go to the biggest companies and those willing to kick in their own development funds.

He predicted the contracts would go to the General Dynamics, Lockheed and Northrop teams, which are teamed with companies that already produce tactical vehicles.

The joint military program office said the 27-month technology development phase would be followed by a separate competition for two system design and development contracts that would begin in 2011.

"Awarding three contracts will help to reduce the JLTV's technical risks, validate designs and cost estimates, evaluate manufacturing processes and refine program requirements," said Lt. Col. Wolfgang Petermann, the Army's JLTV product manager.

He said program requirements and the expected delivery times would not change as a result of the schedule slip.

The Army has said it eventually expects to have 10 distinct vehicle models, with three different payload categories. But it wants a design that has many common parts, systems, tools, training, and maintenance procedures.

Myers said the Army continued to seek participation from foreign governments in the program. He did not name any.

Estimated costs for the JLTV program have risen to over $400,000 per truck from a target price of $250,000, McAleese said.

(Reporting by Andrea Shalal-Esa, editing by Richard Chang)