Competition upended in JLTV program While congressional support is once again strong for the Joint Light Tactical Vehicle, the competition has been turned on its head by a change to the program’s requirements, schedule and cost.
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The three industry teams that won contracts for the technology development phase in 2008 no longer have the same advantage over other competitors now that the Army and Marine Corps are looking for a more affordable replacement for the Humvee, industry analysts said.
“The Army has learned that unless it comes in with a reasonable price tag, Congress won’t support the program,” defense analyst Loren Thompson said. “I don’t think past work matters as much as low price.”
The services are looking for a vehicle that would cost $250,000 per copy versus an earlier estimate of $450,000.
They have also shortened the engineering and manufacturing development phase of the program from 48 months to 27 months.
“The companies from the last phase — that produced those 23 prototypes that the Army rejected — they now have no particular advantage going into this phase,” said Jim Hasik, a defense consultant who writes an industrial analysis blog. “If anything, it’s the folks who tacked toward looking into lighter-weight vehicles that now have the advantage.”
While the playing field has been evened, it has also widened. Six teams confirmed submitting bids March 27 for the EMD phase.
The Army and Marine Corps have said they’ll award up to three contracts toward the end of June, but Thompson said he suspects the services will be able to afford only two.
The bidders are: AM General; a Lockheed Martin-led team that includes BAE Systems; Oshkosh; Navistar; General Tactical Vehicles (a joint venture formed in 2007 between AM General and General Dynamics Land Systems); and a BAE Systems-led team that includes Northrop Grumman.
“The fact that it’s such a crowded field tells you how few new starts there are going to be in the Army vehicle market over the next several years,” said Thompson, who works as a consultant for a handful of the competitors.
Hasik said a win is most needed by AM General.
“In the background, no one quite knows what will happen to the whole military truck market,” Hasik wrote in an email. “It’s crashing, for sure, and this is the last big program for a long time. Any company which was planning on submitting a joint bid had to reconsider what it would get out of the deal. AM General is now particularly vulnerable. It’s effectively a Humvee company, so if it doesn’t win JLTV, it doesn’t have much left.”
AM General, like many of the other JLTV competitors, also had its eye on the Army’s Modernized Expanded Capacity Vehicle program, which was an effort to upgrade the Army’s enormous fleet of Humvees.
In its 2013 budget request, the Army said it would cancel MECV and focus on JLTV.
“AM General is taking no chances, relying on their [General Dynamics] team, because without Humvee, without MECV, it’s not so clear what they’ll do in the absence of a JLTV win,” Thompson said.
THE TEAMS
Of all the bids, Lockheed’s remains the least changed. The company is offering the vehicle it developed during the JLTV technology development phase, with modifications made to fit the new weight and cost requirements.
The core team is intact too. Formed in 2005, it includes the tactical wheeled vehicles team at BAE Systems in Sealy, Texas, as well as Meritor Defense and other subcontractors.
While the makeup of the General Tactical Vehicles team is the same, it is not offering the vehicle it developed during the technology demonstration phase. Instead, it has selected a version of the Eagle, a vehicle already being produced by General Dynamics Land Systems for the German army. For JLTV, the team has added a double-V hull design, which has proved effective against roadside bombs in Iraq and Afghanistan.
The changes to the program “forced us to look at what was available in the General Dynamics family to meet the needs of the JLTV customer,” General Tactical Vehicles Senior Director Don Howe said.
AM General is also offering the Blast-Resistant Vehicle-Off Road, which it says builds on more than a decade of independent research and development investment.
“We’re bringing 50 years of experience, as the most experienced light tactical vehicle developer in the United States,” said Chris Vanslager, AM General’s executive director of business development and defense programs.
BAE Systems is also on two teams. In addition to its participation on the Lockheed team, BAE is leading its own team, which includes Northrop Grumman and Meritor Defense.
BAE teamed with Navistar to win one of three technology demonstration contracts in 2008. Lockheed and General Tactical Vehicles won the other two. However, for the EMD contract, BAE and Navistar are competing independently.
BAE is still offering the vehicle it developed during the technology development phase, but has replaced the Navistar-built engine with one designed and built by Ford. The company is calling its vehicle the Valanx.
Participation in the technology development phase gives the company a leg up because its vehicle was specifically designed for the JLTV program, and not for some other purpose and then modified, BAE’s Glenn Lamartin said.
Meanwhile, Navistar will bid a variant of its Saratoga light tactical vehicle, which the company launched in October after conducting its own automotive and blast testing. Navistar closely watched how budgets were changing and saw a gap between the original JLTV requirements and the MECV program, Navistar spokeswoman Elissa Koc said.
“We wanted to optimize a vehicle platform for a space in the market where we thought nobody else had a product available today,” she said.
Finally, Oshkosh, which has had its eye on the JLTV program since it lost out on a technology development contract in 2008, is offering a variant of its Light Combat Tactical All-Terrain Vehicle. Oshkosh said it has been able to build off lessons learned from its MRAP-ATV, which was designed to meet an urgent need in Afghanistan for a lighter mine-resistant, ambush-protected vehicle.
The L-ATV, developed over six generations, is ready for low-rate production now, said John Bryant, vice president and general manager of Joint and Marine Corps Programs for Oshkosh Defense.
Just last summer, the Senate Appropriations subcommittee on defense recommended canceling the JLTV program, citing excessive cost growth and constantly changing requirements. The Army and Marine Corps responded by working together to bring the cost down and agree on weight and force protection requirements.