Drive to replace Humvee poses big test for Army


For the companies lining up to build as many as 50,000 new vehicles to replace the Army’s Humvee — the ubiquitous symbol of America’s recent ground wars — the stakes are high.

For AM General, the contract award could determine if it remains the main provider of U.S. Army transport vehicles. Oshkosh Defense’ fortunes may very well depend on landing the contract. And if Lockheed Martin wins, it would mean gaining a rare foothold into a new military market.
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But also on the line in the Joint Light Tactical Vehicle is the credibility of the Army, which has failed to successfully carry out number of ground vehicle programs in recent years due to a combination of delays, cost overruns and performance problems.

The JTLV program, set to cost as much as $40 billion over the coming decades, is a chance for the Army to prove that it’s fixed the kinks in its acquisition pipeline and can actually field a troop carrier as advertised, say government and industry experts.

The service’s recent record of multi-billion dollar management failures is widely known: A self-propelled howitzer, known as the Crusader, was terminated in 2002; the Future Combat System, intended to be a family of light tanks, was killed in 2009; and its replacement, the Ground Combat Vehicle, was shelved last year after it, too, foundered.

“The Army’s acquisition track record over the last decade has been atrocious,” said Loren Thompson, a defense consultant with Source Associates. “So if it can’t develop a next-generation Jeep, people will wonder what it can develop.”

The Army made the JLTV, a lightly-armed wheeled vehicle as opposed to a tracked one akin to a tank, a priority when it shuttered the GCV program – and Army Chief of Staff Gen. Ray Odierno recently reiterated the importance of the program.

“When we look at vehicles, we look at a family and what do we need? And this one we absolutely need,” he said at a Defense Writers Group breakfast event May 28. “I feel really good about what we’ve done with the JLTV. I think the way we’ve developed the requirements, the way it’s moving forward — it’s a really important step for us. … It will be a central piece of the Army as we go forward.”

The production contract is expected to be announced this summer.

The timeline to begin equipping units is tight. The Army is set to choose by August between prototypes built by Humvee-maker AM General in Indiana, Oshkosh Defense in Wisconsin, and defense giant Lockheed Martin. And it plans to build 17,000 of the vehicles for the Army and Marines in three years, according to a recent analysis of the program by the Congressional Research Service, the research arm of Congress.

Nearly $460 million is being requested for the program in the Pentagon’s budget request now pending on Capitol Hill and $4.8 billion is budgeted over the next five years.

The trio of contractors eyeing the program, whose prototypes have undergone Army testing since 2013, have all launched ad campaigns aimed at key decision makers and enlisted former lawmakers, Capitol Hill staffers, and retired generals to help them win — and perhaps to apply some political muscle if they lose.

AM General, the manufacturer of the Humvee, has on retainer former Rep. Jim Saxton, a New Jersey Republican who served on the Armed Services Committee. Saxton’s former chief of staff, Elise Aronson, is also lobbying on tactical wheeled vehicles in her capacity as vice president of government affairs at McAndrews & Forbes, AM General’s parent company, according to lobby disclosure records.

Saxton said in a brief telephone interview that the work will pick up after the contract is awarded. “If they win the contract for JLTV, they’ll put me back to work,” he said.

Also working for AM General on light tactical wheeled vehicles, public records show, is a pair of former appropriations staffers, including Doug Gregory, who was a senior aide to the late Appropriations Committee chair Rep. C.W. “Bill” Young (R-Fla.), and Tom Quinn, former legislative director for Rep. Peter Visclosky of Indiana, who is currently the ranking Democrat on the Defense Appropriations Subcommittee.

AM General is an incumbent of sorts in the new competition and plans to build the JLTV in the same Indiana factory that it currently builds the Humvee, about 15 miles east of South Bend.

“We’ve been building light tactical vehicles for the Department of Defense for more than 50 years,” said Christopher Vanslager, vice president of business development and program management at AM General. “We’re ready, right now, fully tooled in Mishawaka, Indiana, to start production today.”

AM General in April sponsored ads in the Pentagon Metro station touting its trustworthiness and experience building light tactical vehicles. The company is also running ads on the JTLV in POLITICO. The blitz expanded this week, with a sponsored article in Defense One touting its bid.

“[Mishawaka] is there, it’s ready, it has surge capacity, and ready to start producing tomorrow without warm-up period or additional investment,” Vanslager added.

For Oshkosh Defense, JLTV is a make-or-break sort of contract. The company laid off more 300 workers in its defense unit in late 2014 due to cuts in military land vehicle contracts and the overall defense downturn. And defense sales at the truck-maker dropped 44.1 percent in the first quarter of 2015 – accounting for almost all of the contractor’s overall sales decline in the same timeframe.

The company is currently enlisting lobbyist Jeffrey Green, a former counsel to the House Armed Services Committee, to work on the JLTV program, according to the lobbying records.

“We’re watching that procurement actively,” he said, “but I’m not going to say there’s an active advocacy campaign.”

Oshkosh has been advertising through standard channels and going to trade shows to make its case, but the company’s actual strategy to win the contract has more to do with price. Oshkosh has been touting its affordability to try to make the case its bid is the wisest choice for the Army.

“With the Oshkosh JLTV, we’re providing the warfighter with the absolute best protected mobility, while providing the taxpayer and the U.S. government a great price,” said John Bryant, the company’s senior vice president of defense programs at Oshkosh and a retired Marine Colonel colonel. “That’s the simple strategy, the best protected mobility for the dollar. We’re ruthlessly focused on that.”

Bryant insists there are plenty of other revenue-producing options for Oshkosh if the company doesn’t win the contract – especially in international sales of JLTV and in its existing vehicle contracts. But John Urias, president of Oshkosh Defense, summed it up in October 2014: “If we don’t win, obviously that would be a hit.”

Lockheed Martin, too, is pulling out all the stops to prove that it doesn’t only build airplanes like its F-35 Joint Strike Fighter. But the defense giant has been stuck playing defense since its original plan — to build the vehicles at partner BAE Systems’ production facility in Sealy, Texas — was upended with the closing of the factory in 2013.

In a slick 30-minute webinar last week, Lockheed Martin showed off its JTLV production facility in Camden, Arkansas, where workers in jumpsuits hovered over factory equipment and climbed into the front seat of the company’s camel-colored JLTV.

Lockheed, which is trying to move past the Sealy plan closure, is touting its technological capabilities and universe of partner companies and suppliers.
“We think this actually fits what we do,” said Scott Greene, Lockheed vice president of ground vehicles. “We’re a systems engineering company, and there are some interesting physics challenges to take a vehicle that has a 14,000-pound curb weight and give it the survivability capabilities of a vehicle that weighs 40 percent more than that.”

A ramped-up Lockheed presence in Arkansas is welcome news to the state’s lawmakers, who have already pledged $87 million for use in the Camden facility if Lockheed wins.Republican Rep. Bruce Westerman of Arkansas estimated that the JLTV contract could bring hundreds of jobs to the area.

“It is our hope that the company’s securing of the JLTV contract would allow Lockheed to not only maintain their presence, but grow it significantly,” Westerman said. “With the addition of a manufacturing division of Lockheed focusing on the JLTV, our citizens can continue providing for our national defense.”

Among the lobbyists advocating on behalf of the Lockheed Martin bid is Josh Holly of Podesta Group, a former House Armed Services Committee staffer who is on retainer to BAE Systems to work on light tactical wheeled vehicle issues. Smaller players on the Lockheed Martin JTLV team have also been plying the lobbying corridors on the issue — including Meritor Defense, a vehicle component manufacturer that has worked on upgrades to the Humvee. Last fall, Meritor hired Andrew Buczek, a government policy adviser at the Washington consulting firm Dykema.

While the bidders’ efforts will soon be put to the test, so will the Army’s.

Struggling to respond to the changing needs of the troops, the service has already been forced to change the specifications for JLTV — including requiring the vehicles to have the same level of armor protection as the Mine-Resistant, Ambush-Protected All-Terrain Vehicle. More requirements changes could further complicate the cost and schedule.

What also remains unclear, according to CRS, is whether the bidders will be offering the government a so-called “technical data package” — or blueprint — for their vehicles, a step that could permit the Army to hold competitions for future quantities of the JTLV.

“The Army could use that data for future production runs, which could enhance competition and possibly result in better prices for the government,” according to the CRS report.

One defense expert monitoring the project who was not authorized to speak publicly said the Army really hasn’t designed and built a successful ground vehicle since the late 1990s. And before that not since the tanks and armored personnel carriers of the Cold War.

“The Army quite frankly has a very poor track record,” the defense expert said. “And they really haven’t had what I would consider any major [research] and eventually development and fielding successes since the Abrams, Stryker and Bradley.”

The JTLV program, which is supposed to be far less complicated, hasn’t been all smooth thus far, the expert added.

“It’s had its bumps in the road, but we’re actually at the end of the day going to start rolling something off an assembly line and start sending it to units,” the expert said. “So in a sense it’s somewhat symbolic that yes we can, from drawing board all the way to production line, actually develop and procure a vehicle. Now granted, the bar is kind of low because it’s a wheeled tactical vehicle. It’s not a combat vehicle or a fighting vehicle per se, but quite frankly it’s a good place to start.”

Jen Judson contributed to this report.