Washington - Oshkosh Corporation won an initial contract on Tuesday from the US Army for its new Joint Light Tactical Vehicle, a $30-billion programme.
The Army plans to produce more than 49 000 of the multipurpose land vehicles for its use and the Marine Corps through 2040 to replace the existing Humvee. The other two competitors for the contract were Lockheed Martin Corporation and AM General, the Humvee’s maker.
The initial contract, including options, is valued at $6.75 billion for about 17 000 vehicles, the Army said in a statement.
Oshkosh jumped on the news in extended trading, rising 10 percent to $42.55 at 4.59pm in New York. The shares rose 1.5 percent at the close.
The Humvee entered service in 1985, when “improvised explosive devices (IEDs) and other anti-vehicle explosive devices were not a major factor in military planning”, according to a March 9 report by the Congressional Research Service.
Deadly attacks on Humvees during the Iraq war led to efforts to speed delivery of Mine-Resistant Ambush-Protected vehicles, or MRAPs. The JLTV is envisioned as a more mobile, lighter descendant of the top-heavy MRAP, which has limited off-road capabilities, essentially combining the mobility of the Humvee and the protection of the larger MRAP.
The Army required that its Hummer replacement be able to survive the most destructive improvised bombs, be mechanically reliable and maintainable with onboard diagnostics, all-terrain mobility, and linked into current and future tactical data networks, according to the CRS.
Funding for the Joint Light Tactical Vehicle programme would double to $457 million in 2016 under the Pentagon’s pending budget request, top $1.3 billion by 2018 and hit almost $1.8 billion in fiscal 2020, according to Army budget documents.
Army Secretary John McHugh told reporters in February that the JLTV was “an essential platform” that’s fully funded through 2020. A decision on full-rate production is scheduled for May 2018.
Tuesday’s contract award can still be challenged. The losing companies have 10 days to file a protest with the US Government Accountability Office after they are briefed on the source selection criteria.
BLOOMBERG