Oshkosh wins $6.75 billion deal to replace U.S. Army, Marine Humvees

[kscarbel2]

Reuters / August 25, 2015

U.S. specialty truck maker Oshkosh Corp has won a $6.75 billion contract to build 17,000 joint light tactical vehicles (JLTV) to replace the aging Humvees used by the U.S. Army and Marine Corps, the U.S. Army announced on Tuesday.

Oshkosh beat out a team made up of Lockheed Martin Corp and Britain's BAE Systems Plc, as well as AM General, a privately held company that built the original Humvees, the Army said in a statement.

The two military services plan to replace a total of 55,000 vehicles over time, which could drive the value of the contract win to over $30 billion.

[kscarbel2]

Associated Press / August 25, 2015

Wisconsin-based Oshkosh Corp. won a major contract Tuesday to build a new combat vehicle to replace a large share of the U.S. military's Humvee troop carriers.

The Department of Defense awarded the Joint Light Tactical Vehicle contract to Oshkosh Defense, one of three firms that were finalists for the work. The $6.7 billion contract is expected to support thousands of jobs.

The Army and Marine Corps plan to buy as many as 55,000 JLTVs by 2040. Nearly 49,100 would be built for the Army with 5,500 going to the Marines. The vehicle is designed to provide more protection against roadside bombs and mines than Humvees without being as big as another military vehicle produced by Oshkosh, the Mine Resistant Ambush Protected vehicle, or MRAP.

Oshkosh Defense beat out Maryland-based Lockheed Martin and Indiana-based AM General for the contract. Pentagon officials declined during a briefing for reporters to say why they chose Oshkosh over its competitors.

Scott Davis, the Army's executive officer for the program, said the big winners are the soldiers and Marines who will gain a vehicle that offers a better balance of protection, payload and performance.

"Our JLTV has been extensively tested and is proven to provide the ballistic protection of a light tank, the underbody protection of an MRAP-class vehicle, and the off-road mobility of a Baja racer," John Urias, president of Oshkosh Defense and a retired Army major general, said in a statement.

Lockheed had said it would build the vehicle at its Camden facility in Arkansas, and state lawmakers there dangled an $87 million incentive package. It's not clear whether Wisconsin or Indiana offered any incentives, but union workers at Oshkosh in 2013 agreed to a contract extension so that the company could nail down its labor costs for the project.

The contract is a timely boost for Oshkosh, which eliminated about 760 jobs last year because of declining defense spending. The company plans to build the vehicle in Oshkosh, with deliveries beginning in 10 months.

The contract initially calls for 17,000 vehicles, with the Army to decide in 2018 whether to purchase the rest of its share, which would push the value of the contract up to around $30 billion. The Marines will get all theirs up front.

Oshkosh Defense, Wisconsin's largest defense contractor, is part of a larger company that also makes fire and emergency vehicles and other commercial equipment such as scissor lifts, cement mixers and garbage trucks.

"Oshkosh is honored to be selected for the JLTV production contract, which builds upon our 90-year history of producing tactical wheeled vehicles for U.S. military operations at home and abroad," Oshkosh Corp. CEO Charles L. Szews said in the company's statement.

Lockheed and AM General have 10 days to file formal protests over the award. Both companies issued statements saying they're gathering information and considering their options.

[29Bowtie]

Mack Defense just signed a major deal (although not a large as the Oshkosh deal) to build 1500 8x8's for the Canadian military.

[kscarbel2]

Bloomberg / August 25, 2015

Oshkosh Corp. won an initial contract Tuesday from the U.S. Army for its new Joint Light Tactical Vehicle, a $30 billion program.

The Army plans to purchase about 55,000 of the multipurpose land vehicles for its troops and the Marine Corps through 2040 as a better-armored replacement for the Humvee. The other two competitors for the contract were Lockheed Martin Corp. and AM General, the Humvee’s maker.

The initial contract, including options, is valued at $6.75 billion for about 17,000 vehicles, the Army said in a statement.

Oshkosh, based in the Wisconsin town of the same name, jumped on the news in extended trading, rising 10 percent to $42.55 at 4:59 p.m. in New York. The shares rose 1.5 percent at the close. The win was striking because Oshkosh, the 99th-largest U.S. government contractor as of fiscal 2014, defeated Lockheed, which ranked No. 1, according to data compiled by Bloomberg.

“Oshkosh has been building tactical vehicles for the Department of Defense for 90 years, so no other company understands the role that tactical vehicles play in our troops’ lives better than Oshkosh,” Charles Szews, the company’s chief executive officer, said in a statement.

Potential Protest

The losing bidders have 10 days to lodge a protest with the Government Accountability Office after they’re briefed on the decision, and Lockheed suggested that it may do so.

“We believe we presented a very strong solution and await the customers’ debrief to hear more detail regarding the reasons behind this selection before making a decision about a potential protest,” the company said in a statement.

The Humvee entered service in 1985, when “improvised explosive devices (IEDs) and other anti-vehicle explosive devices were not a major factor in military planning,” according to a March 9 report by the Congressional Research Service.

Deadly attacks on Humvees during the Iraq war led to efforts to speed delivery of Mine-Resistant Ambush-Protected vehicles, or MRAPs. The JLTV is envisioned as a more mobile, lighter descendant of the top-heavy MRAP, which has limited off-road capabilities, essentially combining the mobility of the Humvee and the protection of the larger MRAP.

The Army required that its Hummer replacement be able to survive the most destructive improvised bombs, be mechanically reliable and maintainable with onboard diagnostics, all-terrain mobility, and linked into current and future tactical data networks, according to the CRS.

Funding for the Joint Light Tactical Vehicle program would double to $457 million in 2016 under the Pentagon’s pending budget request, top $1.3 billion by 2018 and hit almost $1.8 billion in fiscal 2020, according to Army budget documents.

Army Secretary John McHugh told reporters in February that the JLTV was “an essential platform” that’s fully funded through 2020. A decision on full-rate production is scheduled for May 2018.

[Dirtymilkman]

Isn't today the 25th? How can the articles be the 26th? Or is this a government conspiracy? Or did Ks just date it wrong?

[Red Horse]

Interesting to see what the powertrain is. I believe I read the BAE entry was powered by the Ford 6.7. Can't believe they would use something as complex as that in such a vehicle.

[kscarbel2]

Isn't today the 25th? How can the articles be the 26th? Or is this a government conspiracy? Or did Ks just date it wrong?

I'm in HK on my way to Bangkok, so it's already the 26th here. I'm in your future.......at the moment.

[kscarbel2]

Mack Defense just signed a major deal (although not a large as the Oshkosh deal) to build 1500 8x8's for the Canadian military.

That's a Renault Trucks Defense deal (http://www.bigmacktrucks.com/index.php?/topic/40960-volvo-groups-mack-defense-unit-to-supply-1500-re-badged-renault-kerax-8x8-trucks-to-canadian-armed-forces/?hl=renault).

Mack Defense is a shell company set up by Volvo in North America so that rebadged Renault tactical trucks can gain access to the defense market here.

[Dirtymilkman]

I'm in HK on my way to Bangkok, so it's already the 26th here. I'm in your future......at the moment.

How are the massages in Bangkok? I always wanted to go there.

[kscarbel2]

How are the massages in Bangkok? I always wanted to go there.

No time for massages, customers to see and the world's best trucks to sell!

You should plan to come over at least once for the beaches down at the coast......absolutely beautiful.

And you can swing by NZ and see how Tim is getting along......I hear he's created a shortage of Speight's and Marmite down there, exporting it to Vermont and re-selling it at a 100 percent mark-up so he can retire in five years.

[kscarbel2]

Brochure - http://oshkoshdefense.com/wp-content/uploads/2014/09/16589_JLTV_8pgBrch_LowRes.pdf

Website - http://oshkoshdefense.com/jltv/#

[Dirtymilkman]

That would be a great place to visit.

[kscarbel2]

That would be a great place to visit.

Put the trip on your calendar..........life's too short. There are many places around the world you absolutely need to experience.

[kscarbel2]

Interesting to see what the powertrain is. I believe I read the BAE entry was powered by the Ford 6.7. Can't believe they would use something as complex as that in such a vehicle.

Gale Banks 866T V-8 diesel based on the 6.6-liter GM-Isuzu Duramax (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB4QFjAAahUKEwjR6oLy3cjHAhXDO4gKHVSQCRQ&url=http%3A%2F%2Fassets.bankspower.com%2Fmag_article_files%2F84%2F866T-Brochure-2012_sm.pdf&ei=WbveVZHaN8P3oATUoKagAQ&usg=AFQjCNFR2ktCuHmJ097j9BP6krddGFVOgw&cad=rjt)

Each truck at about $400,000 a pop, and about 55,000 will be purchased when all is said and done. Maybe we should stop handing out free money to countries around the world.

[fxfymn]

Each truck at about $400,000 a pop, and about 55,000 will be purchased when all is said and done.

It is a lot of money, but if my ass was riding in that truck I'd be happy that we spent the money that was needed to keep me as safe as possible. And it does show that while none of us likes to pay taxes they are the price of a civilized society that will protect our freedoms (to bitch about high taxes).

It also shows that the taxes we pay don't just disappear; they are circulated through our economy when they go to buy products such as this.

[Dirtymilkman]

Put the trip on your calendar..........life's too short. There are many places around the world you absolutely need to experience.

Well, if you wanna spring for a round trip for me and the Mrs. I'd love to go. Be a great "business" trip.

[kscarbel2]

Well, if you wanna spring for a round trip for me and the Mrs. I'd love to go. Be a great "business" trip.

You only have one life and it is an all-too-short one. It doesn't cost much to travel unless you want it to. After having worked hard for many years, you owe it to yourself to do something for yourself.....a little payback time. Certainly, stepping outside the box (the US) will open you mind and expand your horizons in so many ways (as our lad Tim is now realizing).

[29Bowtie]

Yes, I'm aware of the Renault link, but at least they are assembling them in Canada at Prevost. I also wonder why our country can't standardize vehicles with our neighboring allies in the USA. Then again with the constant rise in the price of the new fighter jets, maybe a look at the Eurofighter wouldn't have been a bad idea.

[kscarbel2]

I mentioned that:

"Buying Oshkosh’s HEMTT A4 8x4 would have been a wise decision, proven vehicles that would have allowed interoperability with U.S. armed forces, Canada’s key ally"

The bottom line is, Canada has been dragging on this purchase for years, and finally decided to go cheap rather than pay up for a Oshkosh HEMTT or Rheinmetall unit.

As for the Eurofighter, I'd much rather bet on the latest version of Saab's Gripen (http://saab.com/air/gripen-fighter-system/gripen/gripen/).

[kscarbel2]

Lockheed Martin Protests JLTV Contract Award to Oshkosh

Bloomberg / September 8, 2015

Lockheed Martin Corp. has filed a protest seeking to overturn the U.S. Army’s choice of Oshkosh Corp. to build a new vehicle replacing the Humvee, a program potentially valued at as much as $30 billion.

Oshkosh was awarded an initial $6.75 billion contract for about 17,000 vehicles last month. The challenge pits Lockheed, the No. 1 U.S. government contractor, against Oshkosh, which ranked 99th in 2014, according to data compiled by Bloomberg.

“After evaluating the data provided at our debrief, Lockheed Martin has filed a protest of the award decision,” spokesman John Kent said Tuesday in an e-mail. “We firmly believe we offered the most capable and affordable solution for the program. Lockheed Martin does not take protests lightly, but we are protesting to address our concerns regarding the evaluation” of the company’s offer.

The Army plans to purchase about 55,000 of the multipurpose Joint Light Tactical Vehicle for its troops and the Marine Corps through 2040 as a better-armored replacement for the aging Humvee.

AM General

The announcement came the same day that AM General LLC, the other losing competitor and the maker of the Humvee, said it wouldn’t file a challenge with the Government Accountability Office that handles protests.

The most famous case in the last decade of a successful protest was GAO’s 2008 decision supporting Boeing Co.’s challenge of an Air Force award to Northrop Grumman Corp. for its aerial refueling tanker. It cited “a number of significant errors that could have affected the outcome.” Boeing won the rebidding.

Few Sustained

Only 2.4 percent of protests over Defense Department contract awards have been sustained from fiscal 2010 through fiscal 2014, according to an analysis of GAO data by Bloomberg Government analyst Jorge Uquillas.

“The government is aware of the protest” by Lockheed and “will fully cooperate in required processes,” Army spokesman Michael Clow said in an e-mail. “We remain confident that the JLTV program is well positioned to provide our soldiers and Marines a substantial capability improvement while remaining affordable for America’s taxpayers.”

December Deadline

The GAO has until Dec. 17 to render a decision, according to spokesman Charles Young, who confirmed that Lockheed filed a protest.

If it wins the challenge, Lockheed would manufacture the vehicles at a Camden, Arkansas, facility. Oshkosh has its plant in the Wisconsin town of the same name, where it’s based.

The Humvee entered service in 1985, when “improvised explosive devices (IEDs) and other anti-vehicle explosive devices were not a major factor in military planning,” according to a March 9 report by the Congressional Research Service.

The Army required that its Humvee replacement be able to survive the most destructive improvised bombs, be mechanically reliable and maintainable with onboard diagnostics, all-terrain mobility, and linked into current and future tactical data networks, according to the CRS.

Separately, AM General has just received a six-year, fixed-price contract valued at as much as $428 million to supply the National Guard with 654 of its new M997A3 Humvee Ambulance Chassis Vehicle designed for domestic disaster relief efforts, company spokesman Jeff Adams said in a statement.

The Lockheed JLTV (with video) - http://www.lockheedmartin.com/us/products/jltv.html