DoD awards $221M for Joint Light Tactical Vehicles, kits, and trailers to AM General LLC

Contract Overview

Contract Amount: $221,251,502 ($221.3M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2023-02-09

End Date: 2027-03-31

Contract Duration: 1,511 days

Daily Burn Rate: $146.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT LIGHT TACTICAL VEHICLE (JLTV) FAMILY OF VEHICLES (FOV) DELIVERY ORDER FOR FAT VEHICLES, KITS, TRAILERS AND PRODUCTION QUANTITY OF TRAILERS, KITS AND VEHICLES.

Place of Performance

Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $221.3 million to AM GENERAL LLC for work described as: JOINT LIGHT TACTICAL VEHICLE (JLTV) FAMILY OF VEHICLES (FOV) DELIVERY ORDER FOR FAT VEHICLES, KITS, TRAILERS AND PRODUCTION QUANTITY OF TRAILERS, KITS AND VEHICLES. Key points: 1. Contract awarded to a single, established manufacturer with a history in tactical vehicle production. 2. Pricing structure is firm fixed price, which shifts cost risk to the contractor. 3. Delivery order represents a portion of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The contract spans over three years, indicating a sustained need for these vehicles. 5. Geographic focus on Indiana for production and delivery. 6. This award is part of a broader modernization effort for tactical vehicle fleets.

Value Assessment

Rating: good

The total award amount of $221.25 million for the Joint Light Tactical Vehicle (JLTV) Family of Vehicles (FOV) over approximately four years suggests a significant investment. Benchmarking this against the total program cost for JLTVs would provide a clearer picture of value. However, the firm fixed-price nature of the contract indicates that the government has negotiated a set price, which can be advantageous if costs are well-managed by the contractor. Without specific per-unit cost data or comparisons to similar vehicle procurements, a definitive value assessment is challenging, but the scale implies a substantial commitment to fleet readiness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was intended. This approach generally aims to foster price discovery and ensure the government receives competitive pricing by allowing any responsible source to participate.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best possible price through a robust bidding process.

Public Impact

The U.S. Army benefits from the acquisition of modern tactical vehicles essential for troop mobility and operational effectiveness. Services delivered include the production and delivery of JLTVs, kits for customization, and trailers. The geographic impact is primarily centered in Indiana, where AM General LLC is based, supporting local manufacturing and employment. Workforce implications include sustained employment at AM General's facilities and potentially within its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if contractor's fixed price does not adequately account for unforeseen production challenges.
Dependence on a single contractor for a critical military asset could pose supply chain risks.
Long-term sustainment and maintenance costs for the JLTV fleet are not detailed in this award.

Positive Signals

Firm fixed-price contract structure transfers cost risk to the contractor.
Award to an experienced manufacturer with a proven track record in tactical vehicle production.
The contract supports the modernization of the U.S. Army's light tactical vehicle fleet, enhancing operational capabilities.
Delivery order is part of a larger IDIQ contract, suggesting a strategic, long-term acquisition approach.

Sector Analysis

The defense sector, specifically tactical vehicle manufacturing, is characterized by high barriers to entry due to specialized engineering, production capabilities, and stringent military requirements. AM General LLC is a significant player in this market, known for its Humvee and now JLTV programs. This contract fits within the broader trend of military modernization, focusing on replacing aging vehicle fleets with more capable and survivable platforms. Spending in this area is substantial, driven by national security needs and technological advancements.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this specific delivery order (SB: false, SMB: false). While AM General LLC may utilize small businesses in its supply chain, there is no explicit requirement for small business subcontracting detailed in this award. This suggests that the primary focus was on securing the required vehicles through a competitive process, rather than specifically targeting small business prime contractors for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, specifically within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Joint Light Tactical Vehicle (JLTV) Program
Family of Similar Vehicles (FOV) Contracts
Tactical Wheeled Vehicle Fleet Modernization
Department of Defense Vehicle Procurement

Risk Flags

Sole-source dependency for specific variants
Potential for long-term sustainment cost increases
Supply chain vulnerability for critical components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $221.3 million to AM GENERAL LLC. JOINT LIGHT TACTICAL VEHICLE (JLTV) FAMILY OF VEHICLES (FOV) DELIVERY ORDER FOR FAT VEHICLES, KITS, TRAILERS AND PRODUCTION QUANTITY OF TRAILERS, KITS AND VEHICLES.

Who is the contractor on this award?

The obligated recipient is AM GENERAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $221.3 million.

What is the period of performance?

Start: 2023-02-09. End: 2027-03-31.

What is AM General LLC's track record with the JLTV program and similar military vehicle contracts?

AM General LLC has a long and established history in producing military vehicles, most notably the High Mobility Multipurpose Wheeled Vehicle (HMMWV), often referred to as the Humvee. They were also a key participant in the development and production phases of the Joint Light Tactical Vehicle (JLTV) program, ultimately winning the initial contract to produce the JLTV. Their experience extends to various other military vehicle platforms and modifications. This extensive background provides them with significant expertise in meeting the demanding requirements of military vehicle acquisition, including engineering, manufacturing, testing, and sustainment. Their track record suggests a deep understanding of the operational needs and technical specifications required for vehicles like the JLTV.

How does the per-unit cost of these JLTVs compare to previous procurements or other similar vehicles?

Specific per-unit cost data for this delivery order is not publicly available within the provided data. However, the JLTV program, in general, has been noted for its higher per-unit cost compared to its predecessor, the HMMWV. This increase is attributed to the JLTV's enhanced protection, mobility, payload capacity, and advanced technology features designed to meet modern battlefield threats. Comparisons to other similar vehicles in the market, such as MRAPs (Mine-Resistant Ambush Protected vehicles) or other light tactical vehicles from international sources, would also be complex due to differing specifications and mission profiles. Without direct comparative data or detailed cost breakdowns for this specific award, a precise benchmark is difficult to establish, but the JLTV is positioned as a premium, highly capable platform.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks associated with this contract include potential production delays, cost overruns (despite the fixed-price nature, unforeseen issues can arise), and supply chain disruptions for critical components. Given that AM General is the sole manufacturer for this specific JLTV variant under this order, there's also a risk related to sole-source dependency if issues arise with the contractor. Mitigation strategies likely include robust contract oversight by the Army, performance incentives, and potentially penalties for non-compliance. The firm fixed-price structure inherently shifts some cost risk to the contractor. Furthermore, the multi-year duration of the underlying IDIQ contract suggests a strategic approach to ensure sustained supply, potentially mitigating long-term supply chain vulnerabilities.

How effective has the JLTV program been in meeting its intended operational goals since its inception?

The JLTV program has generally been considered effective in meeting its core operational goals of providing a more survivable, mobile, and capable light tactical vehicle than the aging HMMWV fleet. The JLTV offers significantly improved protection against modern threats, better off-road mobility, and a higher payload capacity, enabling it to carry more equipment and advanced communication systems. It has been deployed in various operational environments and has received positive feedback regarding its performance and protection. However, the program has also faced challenges, including initial cost overruns and production scaling issues. Despite these, the JLTV is widely regarded as a crucial upgrade for enhancing troop safety and mission effectiveness for light infantry and support units.

What are the historical spending patterns for the JLTV program or similar tactical vehicle procurements by the DoD?

Historical spending on the JLTV program has been substantial, reflecting its status as a major modernization effort for the U.S. military. Initial development and testing phases incurred significant costs, followed by the ramp-up of production. Total program costs have been estimated in the tens of billions of dollars over its lifecycle, encompassing procurement, support, and upgrades. Spending on similar tactical vehicle procurements, such as the HMMWV modernization or the development of other specialized vehicles, also represents significant annual outlays for the Department of Defense. These expenditures are driven by the constant need to maintain a technologically advanced and operationally ready vehicle fleet capable of meeting diverse global threats. The $221 million award represents a specific tranche of this ongoing, large-scale investment.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 105 N NILES AVE, SOUTH BEND, IN, 46617

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $221,251,502

Exercised Options: $221,251,502

Current Obligation: $221,251,502

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV23D0008

IDV Type: IDC

Timeline