Bloomberg News

Joint Light Tactical Vehicle Gains Backing in $518 Billion Bill

December 09, 2011

Dec. 7 (Bloomberg) -- U.S. Senate and House negotiators plan to fund development of new combat trucks for the Army and Marine Corps as part of a Pentagon spending bill for fiscal year 2012.

Lawmakers negotiating the defense appropriations bill are expected to support the Joint Light Tactical Vehicle program in the compromise legislation, according to two congressional aides who weren’t authorized to speak on the record about the negotiations. The Senate Appropriations panel had voted in September to end the potential $54 billion project.

The chairmen of the Senate and House Appropriations committees are expected to introduce next week a spending bill that includes $518 billion for Pentagon operations and about $115 billion to cover wars in Iraq and Afghanistan.

The defense measure will be part of a catch-all legislative package that will also fund other government agencies for the fiscal year that started Oct. 1.

The Pentagon is funded through a stopgap measure, known as a continuing resolution, which expires Dec. 16. Without annual appropriations signed into law, the Pentagon lacks authority to start approved programs, move weapons programs from development into production or increase manufacturing rates.

After the Senate Appropriations Committee on Sept. 13 proposed ending the estimated $54 billion JLTV program, citing “excessive cost growth,” the Army and Marine Corps developed a strategy to reduce the unit cost.

The new estimated unit costs range between $230,000 to $270,000 for base vehicle configurations, according to a draft request. The original unit cost was at least $350,000.

Three Contracts

Three companies in 2008 won technology development contracts for the program: General Tactical Vehicles, a joint venture of General Dynamics Land Systems, part of Falls Church, Virginia-based General Dynamics Corp., and South Bend, Indiana- based AM General LLC; BAE Systems Land & Armaments, part of London-based BAE Systems Plc; and Bethesda, Maryland-based Lockheed Martin Corp.

Under the contracts, General Tactical Vehicles has received $74.6 million; BAE Systems $77.4 million; and Lockheed $65.4 million, according to data compiled by Bloomberg.

President Barack Obama requested $244 million for the JLTV program in his fiscal 2012 budget, all in research and development funding, up from $84.7 million in fiscal 2011 and $83.9 million in fiscal 2010, according to Pentagon budget documents.

Bill Differences

The defense subcommittee of the House Appropriations Committee in June cut $50 million in JLTV funding and increased by the same amount research and development funding for Humvee “survivability enhancements.”

The House in July passed a $530 billion defense-spending bill that was $9 billion below the Pentagon’s fiscal 2012 request for core defense programs, excluding funding for the wars in Iraq and Afghanistan.

The Senate Appropriations Committee later cut $26 billion from the Pentagon request, in line with the deficit-reduction law that Congress passed and Obama signed in August.

For 2012, the Pentagon requested $117.8 billion for war operations, including the military mission in Afghanistan. Congressional negotiators plan to fund war operations for the year at about $115 billion. Details of funding for programs in the Pentagon’s base bill as well as war funding are still in flux until the final legislation is officially submitted before the two chambers are scheduled to vote on it.

Virginia Representative Jim Moran, a Democrat and a senior member of the appropriations panel, said that he expected Congress to pass a regular defense appropriations bill by Dec. 16.

--With assistance from Brendan McGarry in Washington. Editor: Terry Atlas, Jim Rubin.

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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