DoD awards $580M for 513 JLTV trucks and 273 trailers to support Ukraine, with Am General LLC as the contractor

Contract Overview

Contract Amount: $580,247,501 ($580.2M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2023-05-24

End Date: 2028-02-28

Contract Duration: 1,741 days

Daily Burn Rate: $333.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT LIGHT TACTICAL VEHCILE (JLTV) FAMILY OF VEHICLES PRICED DELIVERY ORDER FOR 513 TRUCKS AND 273 TRAILERS TO SUPPORT UKRAINE TRANCHE PRESIDENTIAL DRAWDOWN.

Place of Performance

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

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $580.2 million to AM GENERAL LLC for work described as: JOINT LIGHT TACTICAL VEHCILE (JLTV) FAMILY OF VEHICLES PRICED DELIVERY ORDER FOR 513 TRUCKS AND 273 TRAILERS TO SUPPORT UKRAINE TRANCHE PRESIDENTIAL DRAWDOWN. Key points: 1. This contract represents a significant investment in tactical vehicle support for international partners. 2. The pricing will be evaluated against historical JLTV procurement costs and market rates for similar vehicles. 3. Competition dynamics are crucial for ensuring cost-effectiveness in this large-scale acquisition. 4. Performance will be monitored closely to ensure timely delivery and operational readiness of the vehicles. 5. The contract falls within the broader defense sector's focus on modernizing tactical mobility. 6. Risk indicators include potential supply chain disruptions and geopolitical factors affecting delivery timelines.

Value Assessment

Rating: good

The total award of $580.25 million for 513 trucks and 273 trailers equates to approximately $720,000 per truck and $720,000 per trailer. This unit cost needs to be benchmarked against previous JLTV procurements and similar tactical vehicle acquisitions to assess value for money. Given the urgency and specific support context for Ukraine, the pricing may reflect expedited production or specialized configurations, which could influence direct comparisons.

Cost Per Unit: Approximately $720,000 per truck/trailer unit. Benchmarking against prior JLTV orders and similar military vehicle contracts is recommended for a comprehensive value assessment.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to yield favorable pricing and terms for the government. The number of bidders and the specific evaluation criteria would provide further insight into the intensity of the competition and its impact on the final award price.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment, driving down costs and encouraging innovation, ultimately leading to better value for public funds.

Public Impact

The primary beneficiaries are the Ukrainian armed forces, receiving critical tactical mobility assets. The services delivered include the provision of 513 Joint Light Tactical Vehicles (JLTVs) and 273 associated trailers. The geographic impact is focused on the operational theater in Ukraine, enhancing its defense capabilities. Workforce implications may include increased production demands on Am General LLC's manufacturing facilities and supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in delivery due to the ongoing conflict and logistical challenges in Ukraine.
Supply chain vulnerabilities for specialized components required for the JLTVs.
Geopolitical risks that could alter the demand or delivery requirements.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Contractor (Am General LLC) has established experience with JLTV production.
Firm-fixed-price contract type provides cost certainty for the government.
Delivery order placed under an existing contract vehicle, potentially streamlining the acquisition process.

Sector Analysis

The defense sector is characterized by large, complex procurements for military hardware and support. The JLTV program is a significant initiative within tactical wheeled vehicles, aimed at replacing older vehicle platforms with more capable and survivable ones. Spending in this sub-sector is driven by modernization efforts, operational readiness requirements, and international security assistance. Comparable spending benchmarks would include other large vehicle procurement contracts or major defense equipment sales.

Small Business Impact

While this specific award does not indicate a small business set-aside, large defense contracts often have subcontracting requirements that can benefit small businesses. Am General LLC, as a prime contractor, may engage small businesses for components, services, or specialized manufacturing. The overall impact on the small business ecosystem depends on the extent and nature of these subcontracting opportunities and whether they are actively pursued.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with potential involvement from the Defense Contract Management Agency (DCMA) for performance monitoring. Accountability measures will be tied to delivery schedules, quality standards, and adherence to the firm-fixed-price terms. Transparency is facilitated through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Joint Light Tactical Vehicle (JLTV) Program
Presidential Drawdown Authority (PDA)
Foreign Military Sales (FMS)
Tactical Wheeled Vehicles Procurement
Ukraine Security Assistance

Risk Flags

Delivery timeline risk due to ongoing conflict
Supply chain disruption potential
Geopolitical instability impacting sustainment
Logistical challenges in reaching final destination

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $580.2 million to AM GENERAL LLC. JOINT LIGHT TACTICAL VEHCILE (JLTV) FAMILY OF VEHICLES PRICED DELIVERY ORDER FOR 513 TRUCKS AND 273 TRAILERS TO SUPPORT UKRAINE TRANCHE PRESIDENTIAL DRAWDOWN.

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 $580.2 million.

What is the period of performance?

Start: 2023-05-24. End: 2028-02-28.

What is Am General LLC's track record with the JLTV program and similar large-scale military vehicle contracts?

Am General LLC has a long-standing history with the JLTV program, having been awarded the initial production contract. They are the primary manufacturer responsible for producing the JLTV family of vehicles. Their experience extends to other military vehicle programs, including the High Mobility Multipurpose Wheeled Vehicle (HMMWV). This extensive background suggests a deep understanding of the vehicle's design, manufacturing processes, and logistical requirements. However, like any large-scale production, they have faced challenges related to production ramp-up, cost management, and meeting evolving military specifications. Their ability to consistently deliver high-quality vehicles on schedule and within budget for complex international orders remains a key performance indicator.

How does the per-unit cost of this JLTV order compare to previous procurements or similar international sales?

The approximate per-unit cost of $720,000 for the JLTVs and trailers in this order requires careful comparison. Previous JLTV production orders for the U.S. military have seen unit costs fluctuate, often influenced by the quantity ordered, specific configurations, and the stage of production (e.g., initial low-rate production versus full-rate production). International sales can also vary significantly due to different contract terms, logistical support packages, and potential modifications. To accurately assess value, this $720,000 figure should be benchmarked against recent U.S. Army JLTV delivery orders and any publicly available data on comparable international sales of similar tactical vehicles. Factors such as included options, warranty periods, and training packages can also impact the overall unit price.

What are the primary risks associated with delivering these vehicles to Ukraine under the current geopolitical climate?

The primary risks associated with delivering these vehicles to Ukraine under the current geopolitical climate are multifaceted. Foremost is the risk of delivery delays or interdiction due to active conflict and logistical challenges in the region. Ensuring the safe transit and final delivery to the intended Ukrainian military units requires robust security protocols and coordination with international partners. Furthermore, the ongoing conflict could lead to increased demand for repairs and maintenance, potentially straining support infrastructure. Geopolitical shifts could also impact the long-term sustainment strategy for these vehicles. Finally, the potential for damage or loss of the vehicles in combat operations represents a significant risk to the investment.

What is the expected impact of this contract on the operational readiness and capabilities of the Ukrainian armed forces?

This contract is expected to have a significant positive impact on the operational readiness and capabilities of the Ukrainian armed forces. The Joint Light Tactical Vehicle (JLTV) is designed for enhanced survivability, mobility, and protection compared to older vehicle platforms. Providing 513 JLTV trucks and 273 trailers will significantly bolster Ukraine's capacity for troop transport, reconnaissance, command and control, and logistical support in challenging terrain. These vehicles are equipped with advanced armor and weapon system integration capabilities, which can improve the effectiveness and safety of Ukrainian soldiers on the battlefield. The timely delivery of these modern tactical vehicles will directly contribute to Ukraine's ability to conduct offensive and defensive operations more effectively.

How does this award fit into the broader context of U.S. security assistance to Ukraine and global defense spending trends?

This award fits squarely within the broader context of U.S. security assistance to Ukraine, which has seen substantial increases since the full-scale invasion in February 2022. The provision of tactical vehicles like the JLTV is a critical component of equipping Ukrainian forces with the necessary mobility and protection to counter aggression. Globally, defense spending trends have been on the rise, particularly in Eastern Europe, driven by heightened geopolitical tensions. This contract reflects a strategic allocation of resources to support a key ally facing direct military threats. It aligns with U.S. foreign policy objectives of bolstering democratic partners and maintaining regional stability, while also demonstrating a commitment to the modernization of allied military capabilities.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

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: $580,247,501

Exercised Options: $580,247,501

Current Obligation: $580,247,501

Subaward Activity

Number of Subawards: 97

Total Subaward Amount: $251,284,588

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