Uncertain Path Ahead For Military Truck Fleet

By Sandra I. Erwin
With an inventory of 300,000 trucks — a mix of old, new and everything in between — the Army and Marine Corps are trying to decide which ones to keep, and how they will go about fixing or replacing damaged and outdated vehicles.

The services have struggled over the past several years to predict the quantities and types of vehicles they will need. Forecasts of future buys have been complicated by internal disagreements over how to modernize the fleet of more than 150,000 Army and 25,000 Marine Corps Humvees. Throwing another wrench into the debate is the Defense Department’s $36 billion investment in mine-resistant ambush protected trucks. This has been a thorny issue because the military services so far have considered MRAPs niche vehicles. Now they will have to figure out how many of the nearly 20,000 MRAPs that have been acquired thus far will be made part of the official inventory of U.S. tactical wheeled vehicles.

Military officials are weighing options, although there is no question that, under any modernization strategy, light trucks will be the centerpiece. Humvees make up the biggest portion of the tactical wheeled vehicle fleet. Because of their sheer numbers and the potential costs of acquiring new vehicles to replace old ones, Humvees are creating a fix-or-buy-new dilemma for decision makers.

Industry insiders, as they wait for Army and Marine Corps officials to sort this out, are betting that the big money won’t be in new trucks but rather in repairs and upgrades. “Humvee recapitalization probably is the biggest program out there in the near term,” said an industry source. The only new vehicle that may be acquired is the Joint Light Tactical Vehicle. But industry is not counting on big numbers. Manufacturers were once enthused about JLTV, which started out in 2006 as a program to replace Humvees. JLTV has floundered recently, as the Marine Corps soured on the vehicle for being too heavy. Its estimated price tag of nearly half-a-million dollars per truck has made it all that much more certain that if the services end up buying JLTV, it will be in smaller numbers than industry had hoped.

In deliberations over how to modernize the fleet, the $36 billion already poured into MRAP is the elephant in the room. That equates to almost half the value of the entire $70 billion Army fleet of 266,000 trucks.

Army officials in October leaked to reporters a draft “tactical wheeled vehicle investment strategy,” only to hastily disavow it days later after senior Pentagon officials asked for revisions. A major source of contention was how the services would incorporate 20,000 new MRAPs into their trucks fleets. The services have yet to offer details on whether MRAP will become a “program of record” that will stay permanently in the inventory after current wars are over. Officials have insisted that it is too heavy to function as a light truck under normal circumstances. But MRAPs have in fact replaced Humvees in Iraq and Afghanistan, where traditional thin-skinned trucks are vulnerable to roadside bombs. The speculation is that MRAPs, or possibly the lighter “all-terrain” variant, could end up crushing JLTV in future budget drills.

Truck suppliers are eager to see a long-term strategy and a timeline, sources said. They want to know what specific MRAP variants will be programs of record (MRAPs currently are funded through supplemental war-emergency budgets) and whether the Defense Department will stick with plans to end production of new Humvees in 2012. If the services decide to no longer buy Humvees, industry expects the Army and Marine Corps to soon begin a 10- to 20-year recapitalization effort to update the older portion of the fleet.

About a third of current Humvees are newer armored models. Another third are unarmored utility vehicles that already have been through a recapitalization program at Army depots. The final third are vehicles that have surpassed the 15-year “economic useful life” threshold.

Discussions over how to move forward have been paralyzed by the fact that there are so many programs — JLTV, MRAP, the MRAP all-terrain vehicle, a next-generation Marine Corps personnel carrier, new production Humvees and upgrades for Humvees — that are competing for the same light tactical vehicle mission role. “That’s what’s got people unable to make decisions,” the industry source says.

Under any scenario, some portion of the current Humvee fleet will be remanufactured. The official “requirements” for what specific features and performance the military wants have yet to be announced. Just about every company in the tactical wheeled vehicles industry is jockeying to participate in that program.

“Recap is where most of the money will be,” said Thomas J. Walmsley, senior vice president and general manager of Textron Marine & Land Systems. The company plans to propose a Humvee remanufacturing concept to make the vehicle more survivable by installing a V-shaped protective “capsule” on the hull. “The Army will have to invest on improvements,” he said in an interview. For industry, Humvee recapitalization is an important program because there may not be other opportunities later, if budgets are reduced. “You want to be one of those systems that is in the inventory, that is relevant, and in the fight today,” Walmsley said.

The Army is seeking to upgrade anywhere from 3,000 to 5,000 Humvees a year, depending on available funds. In fiscal year 2010, it allocated approximately $560 million to the Humvee recapitalization program. In the fiscal year 2011 war emergency budget, the Army requested $989 million for Humvee remanufacturing. Since 2004, nearly 30,000 vehicles have been refurbished at a cost of approximately 35 percent of the value of a new production light-utility vehicle, according to a November 2010 report by the Government Accountability Office.

Most of the initial Humvee work will be done at government facilities — predominantly at the Red River Army Depot, in Texas. Private firms that are in pursuit of Humvee business most likely will have to partner with a depot. It is not clear if and when the Army will solicit competitive bids. “There may be a competition later,” Lt. Gen. Robert Lennox, Army deputy chief of staff for programs, told reporters in October.

If supplemental budgets begin to dry up, truck purchases may have to be curtailed, he said. “In the last several years we’ve had $3.5 billion [per year] in the tactical wheeled vehicles budget. It doesn’t mean we’re going to continue to see it.”

Another consideration in future truck purchases is the possibility that the Army may downsize its fleet. The Marine Corps already announced plans to discard 10,000 vehicles from its inventory of 42,000, although it has not specified how many of those might be Humvees. The Army will have 158,000 Humvees by 2012, and it is not clear why such a high number is needed, said Vice Chief of Staff Gen. Peter Chiarelli. “A lot of that [growth in the Humvee fleet] had to do with moving to a modular force,” he said. The modular force is “not as efficient as a division-based force when it comes to equipment,” he noted. The Army Training and Doctrine Command is expected to offer recommendations for possibly doing away or partially modifying the modular brigade structure, Chiarelli said.

In the November report, GAO analyst Michael J. Sullivan said the Defense Department must soon make some tough management decisions. He pointed out that the services consider MRAP vehicles to be “additive to the force structure,” not offsetting quantities of Humvees or JLTVs.  Offsets between MRAPs and JLTVs could save both acquisition and support costs, said Sullivan.

A comparison of JLTV against the M-ATV and Humvee indicates the JLTV is expected to offer protection levels comparable to the M-ATV at a weight nearer to the Humvee, said GAO. An M-ATV weighs 32,500 pounds, compared to 12,000 to 15,000 pounds for a Humvee and about 20,000 to 24,000 for JLTV.

A key consideration for the Defense Department is that JLTV costs are still relatively unknown. So far the Pentagon has spent about $300 million on design efforts. From fiscal years 2011 through 2015, an additional $580 million will be needed for JLTV development, said Sullivan. Production funding is currently projected to start in fiscal year 2013. Through fiscal year 2015, the services are predicting they will need $2.7 billion for JLTV procurement. The program’s total acquisition costs could be substantial, he said. The target unit-production cost ranges from $306,000 to $332,000, depending on vehicle category. That compares to the base M-ATV unit price of about $445,000. Armor kits and mission equipment packages are additional. As a reference point, the cost of government-furnished equipment averaged $532,000 per vehicle for the M-ATVs. If similar costs apply to JLTV, its procurement unit cost could be in excess of $800,000, GAO estimated.

Lennox said the Army plans to move forward with the program. “We’re committed to JLTV. The question is how many and over how long,” he said. “We’re just looking at an affordable path.”

If the Army and Marine Corps buy 60,383 vehicles by 2022, as their original plans indicated, the cost would be almost $18.5 billion and much more when government-furnished equipment and other expenses are included, said GAO. “The cost could determine whether to continue with the program as planned, look at other ways of meeting the requirements, or buy fewer vehicles.”

Sullivan does not regard the JLTV as being in competition with MRAP. “In general, DoD considers the MRAP vehicle an important part of the tactical vehicle portfolios, but not one that replaces the need for other vehicles in the force structure, such as Humvees or JLTVs,” he wrote. “Despite the significant investment in MRAP vehicles, it is not likely that MRAPs would be used to offset quantities of JLTVs, although MRAPs may be able to offset some quantities needed for route clearance, explosives ordinance disposal, and medical evacuation units.”

As of June 2010, the Army had more than 19,800 M-ATV and MRAP vehicles in overseas war zones and in the United States. The Marine Corps has a combined MRAP and M-ATV fleet of about 3,300 vehicles.

“Both services acknowledge the potential operating and support costs as a factor that could affect implementation of their plans,” said Sullivan.

One reason the services are struggling with the integration of MRAP into the fleet is that the vehicles are not in their regular budgets, said Sullivan. “Thus far, most of the cost to acquire, field, operate, and sustain the M-ATV and the MRAP has been funded through supplemental appropriations.” By 2012, the services will likely assume at least part of the operation and sustainment costs for these vehicles, he added. The MRAP joint program office estimates that the cost to operate and maintain the vehicles through 2024 will be about $10.8 billion. Marine Corps officials acknowledged that the projected support cost contributed to a decision to do away with 10,000 vehicles.

Sullivan said the Defense Department’s vehicle strategy should include a cost-benefit analysis that would minimize the collective acquisition and support costs of the various truck programs, and reduce the risk of overlap or duplication, he said. “It is essential for DoD to ensure that the services’ desire to have the most modern, capable tactical wheeled vehicles is balanced with fiscal realities.”

Topics: Land Forces

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