The Pentagon and the defense industry have been talking a lot lately about tough choices.
The Army is facing one of its own: either overhaul its existing fleet of humvees or build a new, high-tech vehicle light enough to be agile and heavy enough to protect soldiers.
At the moment, the service is moving forward with both a fix-up program and one for a new Joint Light Tactical Vehicle, issuing draft solicitations for both in recent weeks.
Service and industry officials expect the Army to have to decide whether to still buy new and get a vehicle tailored for its needs or, facing tighter budgets, scale back its ambitions and focus on remaking its sizeable fleet of trucks.
For contractors, the case presents a challenge. Uncertain which option the Army will prefer, how many it’ll buy and how long the decision-making process will take, they’re having to invest their own dollars.
Gen. Raymond T. Odierno, the Army’s chief of staff, said last week in an interview on the exhibit floor of the service’s biggest trade show of the year that the Army has scaled back its demands for the new vehicle, dubbed JLTV, in an effort to bring down the price.
In a new version of the draft solicitation for the vehicle, the Army — which partners with the Marine Corps on the program — sets as a price target $230,000 to $270,000 per vehicle, plus $65,000 for extra armor. The draft solicitation for the humvee recapitalization effort, on the other hand, caps the per-truck price at $180,000.
Odierno said the Army is moving forward on both programs to see the potential choices but will likely have to make a decision between the two.
The Army’s tough choice foreshadows those that will be faced throughout the Pentagon, an organization that has become accustomed to launching new, ambitious weapons programs in the past decade. Now, facing reduced budgets, the military is having to take a hard look at which efforts should continue and which will have to be cut in favor of cheaper upgrades.
Despite budget pressures, “we can’t just say we’re going to give up all our modernization,” said Odierno at a press conference at the Association of the U.S. Army’s annual exhibition, held at the Walter E. Washington Convention Center.
The uncertainty is pushing contractors to take a hard look at the plans. Bob Murphy, executive vice president for product sectors at BAE Systems, which bases its U.S. operations in Arlington, said the company is likely to hedge its bets.
BAE is already part of the JLTV program and is likely to bid on the humvee upgrade effort, too, according to Murphy.
“It’s the probability of ‘go,’” he said from BAE’s exhibit at the Army conference. Contractors will be asking the same question throughout the process, he said: “Do you have funding?”