Gov. Asa Hutchinson and officials with Lockheed Martin show off the company's Joint Light Tactical Vehicle.
The U.S. Army on Tuesday awarded a contract to build the military’s new Joint Light Tactical Vehicle to Oshkosh Corp. of Oshkosh, Wisconsin.
The company beat two other finalists, including Lockheed Martin of Bethesda, Maryland, which would have assembled the vehicles at its Camden plant. The other finalist was AM General of South Bend, Indiana.
AM General manufactured the Humvee, which the military is replacing with the JLTV.
The deal would have meant expansion for Lockheed Martin’s Camden plant. The company had planned to hire 600 employees and add new facilities to support production of the vehicles.
Lockheed Martin was going to get help from the state of Arkansas to expand. In May, Gov. Asa Hutchinson signed an $87 million incentive package to help finance the project should the company win the contract.
Lockheed Martin has built more than 50 JLTVs in Camden already.
Despite losing the bid, Gov. Asa Hutchinson said Arkansas “did the right thing” by approving the incentive package.
“While Lockheed Martin was not selected as a contractor by the Department of Defense, the state of Arkansas did the right thing by supporting Lockheed Martin to make sure they were competitive,” Hutchinson said in a statement. “There is no doubt that we were competitive in terms of price, our workforce is second to none, and I remain very grateful for Lockheed Martin’s investment and confidence in our Camden facility. That investment will pay off in the long term.”
Procurement rules allow companies that don’t win a contract to protest the award within 10 days. In a statement, Lockheed Martin said it would need more information before deciding whether to do so.
“The Lockheed Martin JLTV Team was disappointed to learn that the U.S. Army and Marine Corps did not select our JLTV,” the company said. “We believe we presented a very strong solution and await the customers’ debrief to hear more detail regarding the reasons behind this selection before making a decision about a potential protest.”
Lockheed Martin, a major military contractor, was new to the ground vehicle business. But it had expressed confidence that it could fulfill the JLTV order.
According to the Army, initial prodiction for the project is set to begin in the first quarter of next year. The Army and Marines are set to receive 17,000 vehicles under the initial contract, worth $6.7 billion.
Oshkosh will make the vehicles at its plant in Oshkosh, Wisconsin, with deliveries beginning 10 months after award. A full rate production decision is expected in fiscal 2018, the Army said.
According to Reuters, analysts had viewed Oshkosh, a specialty truck maker, as the top contender for the project given its record making thousands of tailor-made, armored all-terrain vehicles, or M-ATVs, for U.S. troops in Afghanistan.
But the win is big one for the company, which cut nearly 800 jobs last year.
“Oshkosh is honored to be selected for the JLTV production contract, which builds upon our 90-year history of producing tactical wheeled vehicles for U.S. military operations at home and abroad,” Oshkosh Corp. CEO Charles L. Szews said Tuesday.
“I am tremendously proud of the JLTV program team,” said Heidi Shyu, the Army’s assistant secretary for acquisition, logistics and technology. “Working with industry, they are delivering major improvements in protected mobility for soldiers and have succeeded in executing a program that remains on-budget and on-schedule.”
More from Arkansas Officials
Arkansas Economic Development Commission Executive Director Mike Preston said in a statement that the state’s participation in the project will benefit south Arkansas.
“Lockheed Martin has added some of the most advanced technology in manufacturing at their Camden facility and I have no doubt this combined with the area’s workforce will bring growth opportunities to the company in the near future,” Preston said.
In his own statement, U.S. Sen. Tom Cotton, R-Ark., said he was disappointed with the military’s decision.
“Camden is a first-rate facility and the people who work there are some of the best in the world,” he said. “I am confident the work and infrastructure Lockheed Martin put in place to bid on this project will bring other economic benefits.”
U.S. Sen. John Boozman, R-Ark., made similar comments.
“I am optimistic that Lockheed Martin’s facility in southern Arkansas will continue to play an important role in support of our nation’s defense,” he said.
Arkansas Business will update this story.
Sign up for Daily E-news
