The Military Vehicle Superproject Contract: Who Will Get It?

A model of the military vehicle that officials hope will be built in Arkansas, as shown outside the Arkansas state Capitol in May.
Credit Jacob Kauffman / KUAR News

Anticipation is building with an announcement expected soon about where the next generation of military combat vehicle will be built.

Last week, Arkansas Economic Development Commission executive director Mike Preston revealed that the U.S. Department of Defense has told him the award of the highly-coveted Joint Light Tactical Vehicle (JLTV) will be announced on one of the next three Fridays – Aug. 28, Sept. 4, or Sept. 11.

When the Pentagon announces the winner of the $30 billion JLTV contract, it will have been almost 10 years since the idea of a 21st Century Jeep to replace the bulky, unarmored Humvee emerged in the midst of the Iraq War.

The process has not been easy.

Since the concept of a next-generation, technology-savvy armored vehicle that is “fleet-on-its-feet” was birthed sometime in 2005, the so-called JLTV program has run into the type of bureaucracy that has plagued the Pentagon’s acquisition and procurement division since stories of overpriced hammers and toilet seats grew into urban myths.

Officially, the JLTV program became public when the Joint Chief of Staff’s Joint Requirement Oversight Council (JROC) announced the program in November 2006. But shortly thereafter, the program began hitting snags that ranged from delays caused by technology concerns and protests by competitors that halted the bidding process to numerous changes in schedules, requirements and vehicle types. And the number of vehicles was slashed several times due to congressional budget worries.

MARRED BY DELAYS, SNAFUS
According to a military-style, acronym-heavy narrative provided to U.S. lawmakers by the Congressional Research Service in March 2015, the Under Secretary of Defense for Acquisition, Technology and Logistics first directed the JLTV project to move from the Concept Refinement Phase into the Technology Development (TD) Phase just three days before Christmas in 2007.

Originally, the Army and Marines had intended to issue a Request for Proposal (RFP) for the technology development phase as early as October 2007. However, because of concerns about funding adequacy, technical maturity and shifting requirements, the Pentagon’s acquisition executive, John Young, disapproved the issuance of the RFP and directed the Army and Marines to “go back to the drawing board and develop a robust technology development phase.”

About four months later, in February 2008, an RFP for the technology phase was finally issued to industry. The RFP stated the government desired to award three contracts for the JLTV technology development phase, and stipulated that proposals would be due April 7, 2008, and last 27 months. Contractors would build four test sub-configurations during the first 15 months, followed by 12 months of testing.

On October 2008, three awards were made for the technology phase for a total of $166 million. The three industry teams included BAE Systems and Navistar Defense; General Tactical Vehicles, which was a joint venture between General Dynamics and Humvee maker AM General; and another consortium led by defense giant Lockheed Martin.

But a month later, in November 2008, protests were filed with the Government Accountability Office (GAO) against the technology development awards by the Northrop Grumman-Oshkosh team and the Textron-Boeing-SAIC team, alleging there were “unintended discrepancies” in how the government rated bids in terms of the criteria of systems maturity, logistics and costs.

Shortly thereafter, initial technology work on the JLTV was suspended until three months later in February 2009, when the GAO rejected the protest and stop-work orders were lifted.

Some two years later, in February 2011, the JLTV Program Office announced the contract award of the next phase, Engineering and Manufacturing Development (EMD), would be delayed until January or February 2012.

That snafu occurred because the Army changed requirements for the tactical armed vehicle to have the same level of under body protection as the so-called Mine-Resistant, Ambush-Protected All-Terrain Vehicle (MATV), the U.S. military’s all-service vehicle now used for combat patrols in Afghanistan.

MORE CHANGES
The Pentagon had originally planned to award two contracts for the EMD phase, which was scheduled to last 24 months, but instead opted for a 48-month-long phase before awarding the final production and deployment contracts in the second quarter of the military’s fiscal year 2016, which began in July of this year.

In addition, the Category B variant was eliminated because it proved to be too heavy to meet the required weight of approximately 15,639 pounds to make it transportable by Army CH-47F and Marine Corps CH-53K helicopters. Instead, now there will be two variants – one combat-ready vehicle that can transport four passengers and carry 3,500 pounds, and a support counterpart that can transport two passengers and carry 5,100 pounds.

In June 2011, the Army and Marines successfully accomplished the 27-month technology development phase, completing rigorous test and evaluation efforts at the Aberdeen Test Center in Maryland and the Yuma Test Center in Arizona. According to the U.S. Army and Marine Corps’ joint JLTV Program Office in Warren, Mich., “the prototype vehicles underwent ballistic protection, system performance, and reliability and maintainability tests to gauge technical potential against JLTV requirements, with an emphasis on identifying potential trade-offs to reduce system weight.”

On Jan. 26, 2012, the Army finally issued contract bids for the JLTV’s EMD Phase. Industry proposals for the engineering and manufacturing development contract were to have been filed with the Army by March 13, 2012. The RFP stipulated that up to three contracts could be awarded, and the contract award occurred in June 2012. These contracts are capped at $65 million per contract.

In August 2012, the U.S. Army and Marine Corps selected Lockheed Martin, publicly-traded Oshkosh Corp. in Wisconsin and privately held AM General LLC in South Bend, Ind., to build JLTV prototypes to replace the aging Humvee, which is noted for its off-road capabilities but is vulnerable to the road-side bombings that targeted U.S. troops during conflicts in Iraq and Afghanistan.

Based on their applications, each company received a split of a $185 million award and started from scratch to develop their own version of the JLTV tactical vehicle. More than two years later, in December 2014, the Army released the final RFP for JLTV low-rate initial production and full-rate production and gave the three competitors until early 2015 to refine and submit their bids.

THE STRETCH RUN
On Feb. 10, Lockheed Martin, Oshkosh and AM General submitted final applications to the Army and Marine Corps that met the Pentagon draft requirements for a tactical vehicle that had the off-road capabilities of the Humvee, but also was capable of withstanding anti-vehicle explosive devices that would serve as an Internet-ready, technology command center on the battlefield.

Today, each company has dedicated websites for the JLTV vehicle, offering photos, videos and talking points on their version of the JLTV tactical vehicle. All of the prototypes have a similar look and body type, but each company offered Talk Business & Politics their own reasons why they best meet the Pentagon requirements for “a lightweight, highly-mobile, net-ready vehicle” with unprecedented levels of protection for U.S. troops on the modern battlefield.

Oshkosh spokeswoman Jennifer Christiansen said the reason why the Wisconsin defense contractor and truck builder should be selected to build the JLTV is very simple. “Experience,” she said.

“Oshkosh Defense has decades of experience designing, manufacturing and sustaining the U.S. military’s heavy, medium and mine-resistant ambush protected all-terrain vehicle [M-ATV] fleets,” she said. “In developing our JLTV solution, we applied in-theater experience to develop the next generation light vehicle with unprecedented protection and off-road mobility for our troops.”

Christiansen, who is vice president of business development operations for Oshkosh, said the company’s workforce is highly trained and is already building vehicles for the U.S. military.

“This is an important consideration because transitioning a new vehicle like JLTV from the development phase into production can be very challenging for a company lacking vehicle production experience,” she said, not specifically naming Lockheed Martin. “This is where Oshkosh is truly unique because no other company has successfully transitioned more new military vehicle programs into production for the U.S. Department of Defense.”

According to Oshkosh’s application, which was submitted on Feb. 10 in response to the request for proposal (RFP) for the JLTV, the Wisconsin company said it is “fully prepared” to begin production of the all-terrain vehicles immediately.

AM General’s version of the JLTV, called the Blast Resistant Vehicle-Off Road (BRV-O) tactical vehicle, was also submitted to the Pentagon on Feb. 10. Company officials said that the BRV-O provides the most operational and protection capability to address current and future needs of the U.S. Army and Marine Corps.

“The BRV-O is a combat system designed and built with a total focus on Warfighter needs, by a team whose sole calling is fielding the world’s best light tactical vehicles. The BRV-O JLTV proposal reflects AM General’s dedication to excellence and our steadfast determination to be the most reliable, trusted partner for the United States government,” said AM General President and CEO Charlie Hall. “AM General has the experience, focus, innovation and investment to give soldiers and Marines the advantage in a dangerous and constantly changing world.”

AM General spokesman Jeff Adams told Talk Business & Politics that the Indiana defense contractor “is the leading ‘light tactical vehicle’ manufacturer in the world, supported by an expert workforce and state-of-the-art, fully-tooled, production-ready facility.”

“Our Blast Resistant Vehicle-Off Road [BRV-O] is a transformative vehicle, with an agile and hardened system that will equip and support the Army and Marine Corps with tactical mobility, proven C4ISR and unsurpassed protection,” said Jeffery Adams, executive director for global communications and marketing at AM General. “C4ISR” is the military acronym for command, control, communications, computers, intelligence, surveillance and reconnaissance.

One dynamic that some JLTV watchers believe works both for and against AM General is the fact that the Indiana company is also the original designer and manufacturer of the HMMWV, or Humvee vehicles. Designed for garrison duty during the Cold War, it was not originally designed to be an armored vehicle to protect troops from mines and roadside bombs in recent Middle East conflicts.

Although the company has not received any specific incentive package for the JLTV project, Adams said the company is a trusted partner for the U.S military and “we are proud of our longstanding, productive partnership with the State of Indiana.”

THE CASE FOR LOCKHEED MARTIN
JLTV observers say the key advantage for Lockheed Martin, also a publicly traded company, is its position as the nation’s largest defense contractor and familiarity with the Pentagon contracting process. The defense contracting giant has also teamed with Boeing Co. to bid on a contract to build a new long-range bomber for the Air Force worth more than $80 billion. Northrop Grumman Corp. is also competing for that contract, which is also expected to be announced later this summer.

At the Arkansas State Capitol in late May, Lockheed Martin officials offered a rare glimpse at their version of the JLTV prototype that has been kept under close wraps.

Lockheed Martin executives said the company plans to bolster a $87.1 million bond financing package passed by the state Legislature during a special session in late May with a total investment of more than $125 million for infrastructure improvements at its Camden facility, as well as reach job-creation and wage milestones set by the state over the next 25 years. The superproject would generate up to $885 million in new wages for the economically depressed south central Arkansas region.

Lockheed officials also said the current estimate of 55,000 vehicles is a conservative one. They said that tally could easily increase depending on the needs of the U.S. Army and Marine Corps. Also, several U.S. allies have expressed interest in purchasing a version of the new JLTV vehicle, which would push orders well above the current purchase order.

In early August, Lockheed officials announced that it will produce up to eight company-funded prototypes, or Production Representative Vehicles (PRVs), at its Camden production facility – leading up to the expected JLTV award announcement by the Department of Defense in September.

Lockheed said PRVs are now rolling off the assembly line in South Arkansas in preparation to reduce technical risk, optimize the advanced production processes at the Camden assembly plant, and to exercise and prepare the supply chain.

“The first two of these PRVs are now in Dallas going through a series of tests to validate technical capability and performance,” said Scott Greene, vice president of Ground Vehicles at Lockheed Martin Missiles and Fire Control. “Our goal is to produce the best-value, most-protected, most tactically effective JLTV possible to help assure our soldiers and Marines complete their missions and return safely.”

According to Department of Defense officials, the contract award winner will build approximately 17,000 JLTVs during the first three years of low-rate initial production, followed by five years of full-rate production.

The Army plans to eventually purchase 49,099 JLTV’s, while the Marine Corps plans to eventually buy 5,500 of the vehicles for $30 billion through 2040. For the Army, initial operating capability on the next-generation JLTV is expected in the fourth quarter fiscal 2018.