AM General’s Winning Bid For The Joint Light Tactical Vehicle Makes No Sense. What’s Going On? (From Forbes)
On February 9, the Army awarded AM General a production contract for the Joint Light Tactical Vehicle that could be worth nearly 20 times the company’s annual revenues. The award appears to have been made mainly on the basis of price, since the vehicles AM General would build are substantially the same as those that incumbent Oshkosh Defense has been producing for the better part of a decade. However, it is a mystery how AM General could have offered the very low price it did, because most of the pricing advantages lay with the incumbent. That raises the possibility that something else is going on here–perhaps traceable to AM General’s private-equity owners. I have written a commentary for Forbes here.
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