The Marine Corps plans to push ahead with buying the Joint Light Tactical Vehicle to replace its Humvees, though it may end up with fewer than planned if the Army’s sudden exit drives up the cost per vehicle.
In May, the Army announced a spate of cuts that would, among other things, end its purchases of the JLTV. The service, which has been fielding the vehicles since 2019, was still taking delivery under a joint order for 30,000 in 2023.
The Marine Corps has procured half of its total 15,000 planned buy of JLTVs, spokesman David Jordan told Defense One.
While the Marines have discussed next steps with the Army and AM General, JLTV’s manufacturer, it’s unclear how the larger service’s exit will affect things.
The Army was not able to respond to questions from Defense One about the state of its JLTV program by press time.
The Corps was “still assessing the full impact of the Army’s abrupt exit from the joint program,” Gen. Eric Smith, the Marine Corps commandant, told the House Appropriations Committee in May.
Smith said he expected the costs of JLTVs to go up, adding, “That’s going to negatively impact the Marine Corps’ ability to fulfill its ground tactical vehicle mobility strategy, which has me concerned.”
At the current negotiated rate, which takes into account the Army’s previous plan to buy tens of thousands of them, a JLTV runs about $400,000 each.
A month later, Smith told the Senate Appropriations Committee that the Corps would have to buy fewer JLTVs without a budget increase, adding that the Army did not consult his service before announcing it would stop buying the vehicles.
At the time, an Army leader told reporters they wouldn’t have to pay any settlement to AM General to cancel the contract, because the latest tranche buy of vehicles had been delivered in January, and the service would simply not be ordering the next round.
AM General did not respond to a request for comment from Defense One, but in a May press release said they were committed to continuing to produce their contractually obligated JLTVs, as well as Humvees.
“As we work to understand the significance of the DOD’s recent communications, we will continue to operate our HUMVEE and JLTV A2 assembly lines and our Aftermarket Fulfillment facility as normal to meet our contractual requirements and serve the Warfighter,” the release said, including a backlog of vehicles scheduled to be delivered through the end of the contract in 2027.
The company stood to net up to $8.6 billion from the full contract, which included an option to re-up for 2028.
“The government has tremendous flexibility on contracts in terms of, you know, they can cancel it anytime,” Jerry McGinn, a senior fellow at the Center for Strategic and International Studies and former senior official in DOD’s Office of Manufacturing and Industrial Base Policy, told Defense One.
Cancellation options are written into every contract, McGinn added, giving the government the right to axe an agreement because of performance, but also for their own convenience, as with the JLTV situation.
“And then the company, they go into these contracts knowing that the government can do this,” he said.
The Marine Corps’s fiscal year 2026 budget request doesn’t include any new JLTVs. However, the House of Representatives’ June committee report on the 2026 DOD funding bill recommends putting $345 million into Army JLTVs and another $169 million for the Corps, a reminder that it’s not always up to the individual services whether they can cancel a program.
While the government is always within its right to cancel a contract, the Army Transformation Initiative does raise some questions about its reliability as a customer, McGinn said.
Companies expect that a new president could come with changes in priorities, he said, but “some administrations are more unpredictable than others.”
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