JLTV follow-on worth $6.5 billion over 10 years

By Ethan Sterenfeld / November 18, 2021 at 11:53 AM

The follow-on contract for the Joint Light Tactical Vehicle could be worth $6.5 billion over 10 years, rather than the $12.3 billion that was predicted last December, according to slides from a Nov. 15 industry day.

The Army announced in September the contract would shrink to 16,600 vehicles and 10,000 trailers, but the updated price had not been publicly announced. Last December, the Army said it planned to buy 30,000 vehicles and 10,000 trailers under the follow-on contract.

Oshkosh Defense, the current manufacturer of the JLTV, has said since the reduction was announced that it will compete for the follow-on contract, which the Army plans to award in the fourth quarter of fiscal year 2022. The company warned investors last month that its defense revenue could fall because of reduced JLTV funding.

AM General has said it will compete for the follow-on work, and GM Defense has expressed interest in the competition, but its president said the reduction “changes the business case a bit.” The company has not yet confirmed whether it will bid as a prime contractor.

A recently released draft set of contract requirements adjusted the deadline for the winning company to add a next-generation electronics architecture to the vehicle, according to the industry day slides. The engineering change proposal with the architecture will be due two and a half years after contract award, and it must be implemented by the beginning of the third order year in the contract.

The Army increased the price credit for the next-generation architecture to $7,500 per vehicle, up from $6,000, after it received feedback from contractors that it will be difficult to include, according to the slides. A price credit for corrosion resistance was decreased to $3,000 per vehicle, from $5,000, based on industry progress with the technology.