Over the past decade, the Defense Department has spent $45 billion on bigger, blast-resistant trucks. With the Afghanistan war ending, budget cuts looming and the military’s focus shifting to Asia, the program to develop a Humvee replacement may be in jeopardy, said Todd Harrison, a fellow at the Center for Strategic and Budgetary Assessments, a public policy organization in Washington.
“If you’re not going to be doing counterinsurgencies, why do you need a vehicle that heavily armored?” Harrison said in a telephone interview.
The Defense Department by late September plans to award as many as three companies a total of $195 million to build prototypes, according to Kevin Fahey, the Army official overseeing the program.
Humvee maker AM General is competing for the work against companies including Lockheed Martin, General Dynamics, BAE Systems, Navistar International, and Oshkosh.
The military wants to buy 55,500 of what it calls Joint Light Tactical Vehicles. About 50,000 of them would go to the Army and 5,500 to the Marine Corps. The services would replace about a third of their Humvees, or High Mobility Multipurpose Wheeled Vehicles.
The Government Accountability Office, Congress’s investigative arm, in 2011 estimated the cost of 60,383 of the trucks at $54 billion. It said in March that an updated estimate was needed after the military changed the design and reduced the number of vehicles it planned to buy.
An appropriations panel led by Sen. Daniel K. Inouye (D-Hawaii) last year sought to cancel the program because of “excessive cost growth and constantly changing requirements.’’ Funding was later restored.
The Senate Appropriations Committee “continually reviews the Joint Light Tactical Vehicle program to ensure that the Army and Marine Corps can acquire the vehicle in the numbers that they require and at an affordable cost to the taxpayer,’’ Peter Boylan, a spokesman for Inouye, said in an e-mail.
The Defense Department plans to cut about $487 billion through fiscal 2021 under last year’s deficit-reduction legislation. National security spending would be reduced by an additional $500 billion in automatic cuts known as sequestration unless President Obama and Congress agree on an alternate spending plan. The cuts would begin in January with a $55 billion reduction for fiscal 2013.
The Pentagon in February proposed cutting or delaying several ground-vehicle programs, including the Humvee replacement, a month after unveiling a strategic shift to the Asia-Pacific region.
“It’s not clear how the Army plays in the pivot to Asia,’’ said Harrison, the analyst. “It’s not clear what their role would be.’’
The Army already has too many trucks and tanks, said James Hasik, a defense industry consultant in Austin, Tex.
“You can’t justify that number of vehicles,’’ Hasik said in a phone interview. “Somewhere north of 20,000 would be a substantial buy and much more affordable.’’
AM General, based in South Bend, Ind., in the past three decades has produced about 285,000 Humvees in its factory in Mishawaka, Ind. The four-wheel-drive, 1.2-ton-capacity vehicle was built to carry troops and cargo, much like its jeep predecessor.
After the Gulf War, AM General began producing commercial versions called the Hummer. Arnold Schwarzenegger, the actor who would become California governor, bought the first one. General Motors, which acquired the brand, stopped selling them in 2010.
While the U.S. military avoids using Humvees where they might get attacked, the vehicles are expected to remain in the inventory for decades.
AM General, owned by a joint venture of MacAndrews & Forbes Holdings and the Renco Group, has sold updated versions of the vehicles to Afghan security forces and plans to continue selling them abroad, according to Jeff Adams, a spokesman.
Three companies in 2008 won technology development contracts to build prototypes of a replacement vehicle: London-based BAE Systems, Bethesda-based Lockheed Martin,and a joint venture of Falls Church-based General Dynamics and AM General.
For the new contracts, AM General is also bidding with a separate truck called the Blast Resistant Vehicle Off Road. Oshkosh, based in the Wisconsin city of the same name and the Pentagon’s biggest supplier of blast-resistant trucks, is competing with a light all-terrain vehicle. Navistar, based in Lisle, Ill., split from a BAE Systems-led team and plans to bid with a truck called the Saratoga.
The military initially planned to announce the next round of development contracts valued at $65 million each in June, according to the GAO.
Extending the solicitation period “along with the large number of proposal submissions may cause some delay,’’ though the government still intends to award the contracts “later this summer,’’ Fahey said in an e-mail. He declined to say which companies responded to the request.
“We’ve been hearing August,’’ Elissa Koc, a spokeswoman for Navistar, said of the planned contract announcement. “We are waiting to see’’ what happens with sequestration, she said. “The Humvee fleet continues to age and the need for a new light tactical vehicle continues to exist.’’
— Bloomberg Government