While Lockheed Martin [LMT] and Oshkosh [OSK] trade punches in federal court over the right to build the next-generation Humvee, incumbent manufacturer AM General has rebounded from its loss in that program by racking up almost a billion dollars in Humvee sustaintment contracts.
Over the past six months, AM General has accumulated nearly $900 million in new Humvee sales and sustainment contracts with the Army, Marine Corps and foreign militaries. The company also continues to refurbish old Humvees – officially called the High Mobility Multipurpose Wheeled Vehicle (HMMWV) through a public/private partnership with the National Guard and Red River Army Depot that has generated $200 million in work and was funneled an additional $160 million in the current fiscal year.
Photo: AM General
Most recently the South Bend, Ind.-based company on Jan. 6 scored a $25 million foreign military sales deal to build 120 Humvees for the Iraqi Army. That award was an extension to an earlier contract for vehicles in the M1151 configuration, which are expanded-capacity trucks with enhanced armor.
“During the past year, we have seen robust business for our light tactical vehicle lines and we have great visibility into our deep pipeline of HMMWV sales into the future,” company spokesman Jeff Adams told Defense Daily. “These contracts provide strong examples of the ongoing critical operational need for the HMMWV. We are very bullish on the future opportunities of our diverse line of world-class Light Tactical Vehicles to include the HMMWV. There is significant, ongoing critical operational need for the HMMWV.”
AM General in July was awarded a $373 million firm-fixed-price multi-year foreign military sales contract to build a total of 2,082 Humvees for Afghanistan, Iraq, Kenya, Lebanon, Ukraine and Tunisia. Those deals were expanded in October when the Army tapped AM General to provide new production vehicles, international ambulance vehicles, automotive kits, spare parts and training for another $42 million.
Just days after the $6.5 billion JLTV contract was awarded to Oshkosh, AM General announced a fairly hefty consolation prize: a six-year, $428 million contract for new M997A3 Humvee ambulance-chassis vehicles for domestic disaster relief efforts by the Army and both of its reserve components. AM General decided not to contest the award, as Lockheed Martin did, choosing instead to focus on building and fixing the iconic Humvee that made it a powerhouse defense vehicle manufacturer.
Oshkosh and Lockheed Martin now are locked in a bid protest standoff that began with a complaint by Lockheed Martin to the Government Accountability Office and will end in federal claims court. For the moment, Oshkosh is working to fulfill the Army and Marine Corps’ initial order of 17,000 low rate initial production (LRIP) JLTVs. Production could be ordered to a halt by the court following a Jan. 20 hearing to consider a motion to that effect filed by Lockheed Martin.
The Army plans to buy about 45,000 JLTVs. The Marine Corps has a stated requirement for about 5,000 of the new vehicles. Neither figure comes close to replacing the military’s entire Humvee fleet, which numbers more than 160,000 vehicles. Tens of thousands of legacy Humvees will remain in the U.S. fleet for 30 or more years, as is laid out in the Defense Department’s vehicle modernization and sustainment strategy.
The Army and Marine Corps have repeatedly emphasized the need to modernize and maintain their HMMWV fleets and ensure the vehicle can meet the requirements of future missions through at least 2050.
Another 70,000 Humvees are operational around the world that will eventually need maintenance and repair.
“AM General has a critical role in ensuring these vehicles remain mission ready and as capable as possible, to include the most innovative survivability and communications capability available … now and into the future,” Adams said.