Oshkosh wins $6.75B defense contract to build Humvee replacement

By MoneyTimes

Aug 28, 2015 07:06 PM EDT

The Pentagon has decided to dispose of its ancient Humvees with a new fleet of trucks for combat. They tested out prototypes from AM General LLC, Lockheed Martin Corp and Oshkosh Corp in January. 

Oshkosh beat out the other competitors and was offered a $6.75 billion contract to build the vehicles.

Oshkosh will build 17,000 JLTV (Joint Light Tactical Vehicles) for the agreed amount. Eventually, the military will require a total of 55,000 JLTVsamounting to $30 billion.

The US Department of Defense has been looking for a replacement of the Humvee a short time after the war in Iraq became deadly in 2004. The Humvees were considered vulnerable to improvised explosive device (IED) attacks because it is lightweight and had a flat bottom.

IEDs were considered the number one killer in Iraq, which can tear through the Humvee's bottom tearing it into pieces. Although commanders pleaded for Mine Resistant Ambush Protected (MRAP) trucks, the military was attached to JLTVs.

Charles Szews, Oshkosh CEO, said that the design of JLTV includes what they have learned from constructing the ATV version of the MRAP, called the M-ATV to Afghanistan troops. The JLTV, according to Szews is said to be 70% faster and comes with an IED protection like that of an MRAP and a small tank's bullet resistance.

The major problems in building the truck are height, weight and cost. The trucks should be short enough to fit on ships, light enough to be carried by helicopter and affordable enough to construct in quantity.

The Oshkosh prototype met all those requirements and the company confirms to pricing each truck at $250,000.

The Army expressed their desire for more expensive capabilities and options but in the end accepted a relatively cheap truck. This was also one of the reasons why it took more than 10 years to award the contract.

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