BW: Pentagon orders 2,400 armored vehicles
By DONNA BORAK
The Associated Press
October 18, 2007, 6:35PM ET
WASHINGTON
The Pentagon said Thursday it is ordering an additional 2,400 bomb resistant armored vehicles for its soldiers in Iraq and Afghanistan from three manufacturers in a deal valued at $1.2 billion.
The winning vendors are: Ladson, S.C.-based Force Protection Industries Inc., which received a $376.6 million contract to build 800 vehicles; the North American subsidiary of British defense conglomerate BAE Systems Inc., which won a $322.7 million deal to build 600 vehicles; and Warrenville, Ill.-based Navistar International Corp., a subsidiary of International Military and Government LLC, which will get $509.2 million to deliver 1,000 vehicles.
All the vehicles will be delivered between March and April 2008, according to the Pentagon.
Armored vehicle-makers had been expecting a string of new orders from the Pentagon following a decision by U.S. lawmakers to budget $5.2 billion for the mine-resistant, ambush-protected vehicles in a temporary spending bill.
To date, the Pentagon has ordered 8,800 vehicles from manufacturers with the help of additional funding from Congress.
Fairfax, Va.-based General Dynamics will benefit from Thursday's announcement because of a joint venture with Force Protection that is now under contract to deliver 2,500 vehicles.
However, the Pentagon said it would not order any more MRAP vehicles designed and produced solely by a Canadian subsidiary of General Dynamics, nor by its rival Armor Holdings Inc., which was recently acquired by BAE Systems in August.
A Pentagon official said the decision to trim down the types of vehicles being built was to reduce maintenance, logistics and training issues, especially as it plans to deliver up to 1,200 vehicles a month.
To meet its target of 15,200 vehicles, the Defense Department plans to ask Congress to authorize an additional $8.2 billion in funding to order another 6,500 vehicles by Dec. 1. Armored vehicle makers have been putting pressure on the Pentagon to place orders before the beginning of next year or risk having to restart production lines, which would drive costs up.
Shares of Force Protection added 10 cents to $22.62 in after-hours trading, after falling $1.28, or 5.4 percent to close at $22.52. Shares of Navistar fell 25 cents to close at $71.25
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