OSHKOSH SELECTED FOR FMTV
27 Aug 09. Oshkosh Defense, a division of Oshkosh Corporation (NYSE:OSK), has been awarded a contract by the U.S. Army Tank-automotive and Armaments Command Life Cycle Management Command (TACOM LCMC) for the U.S. Army’s Family of Medium Tactical Vehicles (FMTV) rebuy program.
“We feel privileged that the U.S. Army has selected Oshkosh to produce the FMTV, an important element to the Warfighter’s tactical vehicle fleet,” said Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer. “This was a highly competitive bid. We look forward to working closely with our customer on this project to meet the needs of our troops, just as we have with our other products and services.”
The FMTV rebuy program is a five-year, indefinite delivery/indefinite quantity (IDIQ) contract award for the production of up to 23,000 vehicles and trailers as well as support services and engineering. The FMTV is a series of up to 23 variant and 17 different models ranging from 2.5 ton to 5 ton payloads. The contract’s first delivery order is valued at $280.9 million for the production and delivery of 2,568 trucks and trailers. Initial test vehicle deliveries are planned for mid-2010, followed by production vehicle deliveries later in the year.
27 August 2009. BAE Systems has been notified by the US Department of Defense (DoD) that has not been awarded a follow-on contract for production of vehicles under the Family of Medium Tactical Vehicles programme.
The full implications of this decision cannot be assessed until consultations with the DoD have been completed regarding their intentions to transition the programme to the new arrangements.
The Company’s current contract will see production of FMTV vehicles through to the fourth quarter of 2010.
The Company’s financial planning assumptions anticipate FMTV sales in each of 2009 and 2010 of approximately $2bn. It is not anticipated that this planned activity will be impacted by this decision. The Company had planned for FMTV sales to reduce to less than $1bn per annum from 2011 onwards.
The Company believes its proposal represented further improved value for the customer and at the same time served the best interests of shareholders. BAE Systems’ bid for this next phase of the FMTV programme was based on the experience of producing approx 50,000 of these high quality military specification vehicles over a number of years.
This is a huge blow for BAE Systems and will almost certainly involve a write-down on their Armor Holdings purchase. Oshkosh fundamentally won FMTV the last time, Stewart & Stevenson bid at a loss which resulted in the demise of their CEO Mike Grimes.
We said in BATTLESPACE ALERT Vol.11 ISSUE 1, 24 June 2009,, WALT HAVERSTIEN LEAVES BAE SYSTEMS, ‘The City and Wall Street had pencilled in that BAE had made a one-off gain of $1.5bn from the MRAP UOR in the 08-09 financial year which they had assured markets that would have been filled this year 201009-10 by FCS Manned and other overseas MRAP orders, none of which have materialised. However with the axe hanging over NLOS C as suggested by Scott Gourley last year, the numbers at BAE Systems are looking wobbly, particularly with rumours that Warrior will be withdrawn from Afghanistan this year for costs reasons which will in effect negate any requirement for the WFLIP upgrade programme worth some £500,000+ to BAE and/or DSG and/or Lockheed Martin. The removal of Warrior from Afghanistan will also destroy BAE’s argument that its complex and untried CTA canon is a must have for bunker busting in Afghanistan. This could mean that BAE Systems has not made the cut for M-ATV which some observers see as being a close run thing with Oshkosh looking favoured as the suspension system on its M-ATV vehicle is being reset for the U.S. Army’s Cougar vehicles and possibly the U.K.’s Mastiff and TSVs to meet the rough terrain requirements of Afghanistan.