WASHINGTON Nov 12 U.S. and foreign defense
contractors are jockeying for position as the Pentagon moves
toward launching a mammoth competition to replace some 170,000
Humvees in the U.S. military fleet.
Defense analysts and industry sources say the Joint
Tactical Light Vehicles contract is worth well over $10 billion
and possibly three to seven times more, depending on the final
cost of the vehicle chosen for the Army and Marine Corps to use
for the next three to four decades.
The replacement vehicles will become the workhorse of the
two services and will be used to carry troops and equipment,
with an eye to protecting them better from roadside bombs than
the current fleet of Humvees.
"It is a very lucrative program," said defense consultant
Jim McAleese. "Whoever wins this, they're going to build the
light tactical vehicle for the Army for the next 40 years."
The Pentagon expects to release a formal request for
proposals for technology development of the new trucks by the
end of March 2008.
Several of the Pentagon's top contractors are gearing up to
bid for the work, including No. 1 Lockheed Martin Corp (LMT.N)
which teamed with Britain's BAE Systems Plc (BAES.L), which
acquired Armor Holdings this year. Also expected to bid are No.
2 Boeing Co (BA.N) with partner Textron Inc (TXT.N), and No. 4
General Dynamics Corp (GD.N), which has teamed with Humvee
maker AM General.
BAE, which has a big stake in a U.S. project worth more
than $20 billion that is sending armored Mine Resistant Ambush
Protected (MRAP) vehicles to Iraq, also has a separate bid for
the new contract. BAE is teaming up with rival MRAP maker
Navistar International Corp's NAVZ.PK International Military
and Government LLC.
Specialty truck maker Oshkosh Truck Corp (OSK.N) is also
participating in the competition.
The Army and Marine Corps had hoped to begin production of
its Humvee replacements by 2010, but the Pentagon recently
decided to return to its original 2012 target.
That decision followed a move by acting Pentagon arms chief
John Young in September to require development of prototypes
before the government moves into the costly system design and
development phase of new programs.
"Competing teams producing prototypes of key system
elements will reduce technical risk, validate designs, validate
cost estimates, evaluate manufacturing processes, and refine
requirements," Young wrote in a memo explaining the policy.
Defense analyst Paul Nisbet with with JSA Research, lauded
the move. The military's failure to test prototypes with the
MRAP program resulted in a range of problems, including
equipment that did not work as expected, he said.
In the MRAP program, which was rushed through by Congress,
the Pentagon is "ending up with half a dozen different vehicles
that are going to be a logistical nightmare," Nisbet said.
He said it made more sense in the case of the Humvee
successors, which were not as urgently needed, to "slow the
process down and buy one type of basic vehicle" to be built by
one manufacturer, or possibly two sharing the same design.
McAleese expected the Pentagon to whittle the field to two
or three teams that would build a prototype and eventually
settle on one manufacturer for the new vehicles.
Teams with experience mass producing vehicles and leading
other big programs would probably have a competitive edge, he
Lockheed executives acknowledged their company is better
known for advanced fighter jets, but said its experience
integrating communications and sensors would give it an edge in
the truck competition.
In addition, Lockheed's design has a V-shaped hull that
offers troops similar protection to the much heavier -- and far
less transportable -- MRAP vehicles, said Steve Ramsey,
executive vice president of Lockheed's Systems Integration.
(Reporting by Andrea Shalal-Esa; editing by Andre Grenon)