By Ann Roosevelt
Oshkosh Corp.’s [OSK] Oshkosh Defense division yesterday prevailed over incumbent BAE Systems for the five-year, potential multi-billion rebuy program for the Army’s Family of Medium Tactical Vehicles (FMTV).
“We feel privileged that the U.S. Army has selected Oshkosh to produce the FMTV, an important element to the Warfighter’s tactical vehicle fleet,” Robert Bohn, Oshkosh Corp. chairman and CEO, said in a statement announcing the award. “This was a highly competitive bid. We look forward to working closely with our customer on this project to meet the needs of our troops, just as we have with our other products and services.”
BAE Systems said in a statement it will “consider its options as it carefully reviews” the Army’s decision.
Linda Hudson, president of BAE Systems Land & Armaments, said in the statement: “We delivered a strong proposal, which we believe met the best interests of the business, customer and our shareholders. While this news is disappointing, we are proud of what we have achieved in making the FMTV the medium tactical vehicle of choice for the Army during the past 17 years. We remain committed to implementing a global land systems strategy, particularly in the areas of readiness and sustainment and export activities.”
Under the requirements contract issued to Oshkosh Defense by the Army Tank-automotive and Armaments Command Life Cycle Management Command (TACOM LCMC), the first delivery order is valued at $280.9 million for the production and delivery of 2,568 trucks and trailers.
Initial test vehicle deliveries are planned for mid-2010, followed by production vehicle deliveries later in the year. According to the contract award, the first ordering year runs from the date of the award to Dec. 31
The FMTV rebuy program is for the production of as many as 23,000 vehicles and trailers, support services and engineering. FMTV consists of up to 23 variants and 17 different models.
BAE Systems financial planning assumptions anticipate FMTV sales “in each of 2009 and 2010 of approximately $2 billion. It is not anticipated that this planned activity will be impacted by this decision,” the company statement said. Additionally, the company planned for FMTV sales “to reduce to less than $1 billion per year from 2011 onward.”
BAE Systems is working under a bridge contract to deliver FMTVs through to the fourth quarter of 2010. In addition, the company continues to support the Army’s FMTV program through its public-private partnership with Red River Army Depot for reset and support of FMTVs, and through field-support representatives around the world.