INDUSTRIAL BASE

U.S. Tactical Wheeled 

Vehicle Manufacturers 

Face Period of 

Uncertainty as DOD 

Purchases Decline and 

Foreign Sales 

Potential Remains 

Unknown

Report to Congressional Committees 

September 2012

GAO-12-859

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-859, a report to 

congressional committees 

September 2012

INDUSTRIAL BASE 

U.S. Tactical Wheeled Vehicle Manufacturers Face 

Period of Uncertainty as DOD Purchases Decline and 

Foreign Sales Potential Remains Unknown

Why GAO Did This Study

DOD’s need for TWVs dramatically 

increased in response to operational 

demands and threats experienced in 

Afghanistan and Iraq. TWVs primarily 

transport cargo and personnel in the 

field and include the High Mobility 

Multi-purpose Wheeled and Mine 

Resistant Ambush Protected vehicles. 

The U.S. TWV industrial base, which 

includes manufacturers and suppliers 

of major subsystems, increased 

production to meet DOD’s wartime 

requirements. That base now faces 

uncertainties as DOD’s budget 

declines and operational requirements 

for these vehicles decrease. In addition 

to sales to DOD, U.S. manufacturers 

sell vehicles to foreign governments. 

The Senate Armed Services 

Committee Report on a bill for the

National Defense Authorization Act for 

Fiscal Year 2012 directed GAO to (1) 

describe the composition of the U.S. 

TWV industrial base, (2) determine 

how many U.S. manufactured TWVs 

were purchased by foreign 

governments from fiscal years 2007 

through 2011, and (3) identify factors 

perceived as affecting foreign 

governments’ decisions to purchase 

these vehicles. GAO analyzed data 

from DOD on U.S. and foreign 

government TWV purchases, as well 

as sales data from the four primary 

U.S. TWV manufacturers. GAO also 

collected data from five foreign 

governments, including those that did 

and did not purchase U.S. TWVs. 

What GAO Recommends

GAO is not making recommendations 

in this report. DOD, the Department of 

State, and two manufacturers provided 

technical or clarifying comments on a 

report draft that were incorporated as 

appropriate.

What GAO Found

The U.S. tactical wheeled vehicle (TWV) industrial base includes seven

manufacturers that utilize common suppliers of major subsystems, such as 

engines and armor. Four of these manufacturers reported that their reliance on 

sales to the Department of Defense (DOD) varies, in part, as they also produce 

commercial vehicles or parts. Collectively, the seven manufacturers supplied 

DOD with over 158,000 TWVs to meet wartime needs from fiscal years 2007 

through 2011. DOD, however, plans to return to pre-war purchasing levels, 

buying about 8,000 TWVs over the next several years, in part, due to fewer

requirements. 

Almost 28,000 U.S.-manufactured TWVs were purchased for use by foreign 

governments from fiscal years 2007 through 2011. Approximately 92 percent of 

these vehicles were paid for using U.S. security assistance funds provided to 

foreign governments. Iraq and Afghanistan were the largest recipients of such 

assistance, but officials stated that DOD does not plan to continue funding TWV 

purchases for these countries. While sales to foreign governments are unlikely to 

offset reductions in DOD purchases, manufacturers reported that foreign sales 

are becoming an increasingly important part of their revenue stream.

Comparison of TWV Sales to DOD and Foreign Governments, Fiscal Years 2007 through 2011 

Sales of U.S.-manufactured TWVs to foreign governments may be affected by 

multiple interrelated factors, including the availability of used DOD vehicles for 

sale, foreign competition, differing vehicle requirements, and concerns 

associated with U.S. arms transfer control regimes. U.S. manufacturers said 

sales of used Army TWVs to foreign governments could affect their ability to sell 

new vehicles. U.S. manufacturers and foreign governments also identified a 

number of non-U.S. manufacturers that produce TWVs that meet foreign 

governments’ requirements, such as right-side drive vehicles. While U.S. 

manufacturers can produce vehicles that meet these requirements, vehicles they 

produced for DOD generally have not. Finally, manufacturers and foreign officials 

had mixed views on how the U.S. arms transfer control regimes may affect 

foreign governments’ decisions to purchase U.S. vehicles. U.S. manufacturers 

and foreign officials expressed concerns with processing times and U.S. end-use 

restrictions, but foreign officials also said that such concerns have not been a 

determining factor when purchasing TWVs that meet their requirements. 

View GAO-12-859. For more information, 

contact Belva Martin at (202) 512-4841 or 

martinb@gao.gov. 
Page i GAO-12-859 Industrial Base 

Letter 1 

Background 4

U.S. TWV Industrial Base Includes a Number of Manufacturers 

Whose Reliance on Sales to DOD Vary 9

TWV Sales to Foreign Governments Were Relatively Few and 

Generally Purchased with U.S. Funds 15

U.S. Manufacturers and Foreign Governments Identified Multiple 

Interrelated Factors That May Affect TWV Foreign Sales 19

Concluding Observations 25

Agency Comments and Third-Party Views 26

Appendix I GAO Contact and Staff Acknowledgments 28

Tables

Table 1: DOD TWVs by Type Acquired, Fiscal Years 2007 through 

2011 5

Table 2: Conventional Arms Transfer Policy Criteria 7

Table 3: Ranges of TWV Manufacturer Reported Reliance on DOD 

Sales 14

Table 4: Foreign TWV Manufacturers as Identified by 

Manufacturers and Foreign Governments 21

Figures

Figure 1: TWV Manufacturers, Vehicles Produced, and Market 

Share for DOD TWVs, Fiscal Years 2007 through 2011 10

Figure 2: Commonality of Suppliers for Major Vehicle Subsystems 

in DOD TWVs 11

Figure 3: Declining DOD Purchases by TWV Family, Fiscal Years 

2007 through 2017 12

Figure 4: Comparison of TWV Sales to DOD and Foreign 

Governments, Fiscal Years 2007 through 2011 16

Figure 5: Comparison of Funding Types for TWV FMS, Fiscal Years 

2007 through 2011 18

Contents
Page ii GAO-12-859 Industrial Base 

Abbreviations

AECA Arms Export Control Act

DCS direct commercial sales

DOD Department of Defense

FMS Foreign Military Sales

FMTV Family of Medium Tactical Vehicles

HMMWV High Mobility Multi-purpose Wheeled Vehicle

JLTV Joint Light Tactical Vehicle

MRAP Mine Resistant Ambush Protected

TWV tactical wheeled vehicle

USML United States Munitions List

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-12-859 Industrial Base 

United States Government Accountability Office

Washington, DC 20548

September 13, 2012

Congressional Committees

Tactical wheeled vehicles (TWV) have played a critical role in supporting 

the warfighter, as most recently demonstrated in Afghanistan and Iraq. 

TWVs are primarily designed for use by forces in the field to transport 

cargo and personnel and are capable of operating on primary and 

secondary roads, trails, and cross-country terrain. The Department of 

Defense’s (DOD) need for TWVs increased dramatically in response to 

the operational demands and threats, such as improvised explosive 

devices, experienced by U.S. forces during Operation Enduring Freedom 

and Operation Iraqi Freedom. For example, DOD’s procurements for two 

types of TWVs—the High Mobility Multi-purpose Wheeled Vehicle 

(HMMWV) and the Family of Medium Tactical Vehicles (FMTV)—

increased from 5,500 in 2002 to 27,350 vehicles in 2006. To meet these 

requirements, the U.S. TWV industrial base, which includes vehicle 

manufacturers and their suppliers of major subsystems and parts, 

increased vehicle production. However, that industrial base now faces a 

period of uncertainty as requirements for these vehicles decrease with the 

withdrawal of U.S. forces from Iraq and the planned drawdown in 

Afghanistan, along with declines in DOD’s budget.

In addition to sales to DOD, the U.S. TWV industrial base also sells 

vehicles to foreign governments. The sale of U.S. arms and dual-use 

items, including TWVs, to friendly nations and allies is an integral 

component of both U.S. national security and foreign policy.1 The Arms 

Export Control Act (AECA) authorizes the President to control the export 

and import of arms.2 The AECA authorizes the U.S. government to sell 

arms to foreign governments through government-to-government 

agreements as part of the Foreign Military Sales (FMS) program.3

 

1

For the purposes of this report, the term arms refers to defense articles, defense 

services, and related technical data as specified by 22 U.S.C. § 2778 and defined in 22 

C.F.R. Part 120. Dual-use items are those which have both military and commercial 

applications.

It also 

authorizes the issuance of export licenses for U.S. manufacturers to sell 

2

22 U.S.C. §§ 2751-2799aa-2.

3

FMS is limited to eligible countries and international organizations. 22 U.S.C. § 2753.

 
 

Page 2 GAO-12-859 Industrial Base 

arms directly to eligible foreign governments, known as direct commercial 

sales (DCS). Regardless of the method of sale, each FMS request or 

DCS license application is reviewed by officials from DOD and the 

Department of State (State) to ensure the sale would not result in harm to 

U.S. interests and is consistent with national security and foreign policies.

In response to directions in the Senate Armed Services Committee 

Report4

To describe the composition of the U.S. TWV industrial base, we 

obtained, reviewed, and discussed with DOD officials service-level TWV 

strategy, acquisition planning, budget, and program office documents. We 

identified the new TWVs acquired by DOD in fiscal years 2007 through 

2011 and new TWVs anticipated for acquisition in fiscal years 2012 

through 2017—the period projected in current budget documents.

on a bill for the National Defense Authorization Act for Fiscal 

Year 2012, we (1) described the composition of the U.S. TWV industrial 

base and the extent of manufacturers’ reliance on sales to DOD, 

(2) determined how many U.S. manufactured TWVs foreign governments 

purchased in fiscal years 2007 through 2011, and (3) identified factors 

that are perceived as affecting foreign governments’ decisions to 

purchase these vehicles.

5

 

4

S. Rep. No. 112–26, at 30 (2011).

We 

identified vehicle manufacturers that produced those vehicles, either fully 

or partially, within the United States and consider them part of the U.S. 

TWV industrial base for the purposes of this review. We obtained past 

and planned acquisition data for these TWVs from the Army TACOM Life 

Cycle Management Command, Marine Corps Systems Command, the 

Mine Resistant Ambush Protected Joint Program Office, the Air Force Air 

Logistics Center, and the Navy Expeditionary Program Office. We also 

obtained data from and interviewed the four U.S. manufacturers that 

produced approximately 92 percent of all TWVs purchased by DOD in 

fiscal years 2007 through 2011 regarding their reliance on DOD sales and 

their supplier base. While we did not obtain data from the other three 

manufacturers on their reliance and supplier base, the DOD TWV 

procurement data we obtained include their sales to DOD in fiscal years 

2007 through 2011. We assessed the reliability of the data reported by 

DOD and manufacturers through interviews with knowledgeable officials 

5

We did not include TWV parts purchased by DOD or any efforts intended to sustain or 

upgrade its existing vehicles. 
 

Page 3 GAO-12-859 Industrial Base 

and electronic data testing for missing data, outliers, and obvious errors 

and determined the data to be sufficiently reliable for our purposes.

To determine how many U.S. TWVs were purchased by foreign 

governments, we obtained FMS and DCS data for fiscal years 2007 

through 2011. We obtained FMS data from the Army TACOM Life Cycle 

Management Command’s Security Assistance Management Directorate 

and the Marine Corps Systems Command’s International Programs 

Directorate as they directly facilitate the FMS process for TWVs within 

DOD. We obtained DCS data from the four TWV manufacturers included 

in our scope. The FMS data we obtained from DOD contain foreign sales 

data for the three remaining TWV manufacturers, but we did not collect 

DCS data from them. We limited FMS and DCS data to vehicles that were 

purchased by DOD in fiscal years 2007 through 2011 and also sold to 

foreign governments. We assessed the reliability of FMS data reported by 

DOD by interviewing officials knowledgeable about the data and crosschecking the data with FMS records from the four manufacturers we met 

with. We assessed the reliability of DCS data reported by the four 

manufacturers we met with by interviewing officials knowledgeable about 

the data and performing electronic testing. Based on those efforts, we 

determined that the FMS and DCS data reported to us were sufficiently 

reliable for our purposes.

To identify factors perceived as affecting foreign government decisions to 

purchase U.S. TWVs, we interviewed representatives from the four U.S. 

TWV manufacturers included in our scope, foreign government officials 

from five selected countries, and DOD, State, and Department of 

Commerce (Commerce) officials. We interviewed officials from three 

countries that were among the biggest buyers of U.S. TWVs through the 

FMS program in fiscal years 2007 through 2011 or DCS in fiscal years 

2008 through 2011. We also interviewed officials from two allied countries 

that did not purchase U.S. TWVs through the FMS program in fiscal years 

2007 through 2011 or DCS in fiscal years 2008 through 2011 to gain 

additional perspectives. Some of the five countries were in the process of 

purchasing TWVs. Collectively, these officials provided information on 

foreign manufacturers of TWVs and foreign TWV requirements. Because 

the countries provided us with information on the size and composition of 

their TWV fleets, which some regard as sensitive, we are not identifying 

the countries that participated in our review by name. To determine how 

the U.S. arms transfer control regimes may affect such sales to foreign 

governments, we also reviewed the AECA, Export Administration Act of 

1979, International Traffic in Arms Regulations, DOD’s Security 

Assistance Management Manual, and related U.S. guidance. To 
 

Page 4 GAO-12-859 Industrial Base 

determine how many U.S. TWV sales to foreign governments were 

denied, we interviewed officials from State’s Directorate of Defense Trade 

Controls and Regional Security and Arms Transfer offices and 

Commerce’s Bureau of Industry and Security. We also reviewed available 

State export licensing data for fiscal years 2008 through 2011 and 

Commerce’s data for fiscal years 2007 through 2011.

6

We conducted this performance audit from October 2011 to September 

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

 

DOD and the military services classify TWVs by weight or payload 

capacity into three categories—light, medium, and heavy—although the 

definitions of each class vary among the services. Each class generally 

includes multiple variants or models built on a common chassis. For 

example, the Army’s FMTV consists of 2.5- and 5-ton capacity trucks, 

each with the same chassis and includes cargo, tractor, van, wrecker, 

and dump truck variants. Table 1 lists the TWVs acquired by the military 

services over five fiscal years, fiscal years 2007 through 2011.

 

6

Licensing data for DCS were obtained from State’s DTRADE system, which was 

implemented in 2008. We did not obtain State licensing data collected prior to its 

implementation.

Background

Tactical Wheeled Vehicles 
 

Page 5 GAO-12-859 Industrial Base 

Table 1: DOD TWVs by Type Acquired, Fiscal Years 2007 through 2011

Vehicle class Vehicle family Number of variants Military service

Light High Mobility Multi-purpose Wheeled Vehicle 5 Army, Marine Corps, Air Force, Navy

Medium Light Medium Tactical Vehicle 3 Army 

Medium Tactical Vehicle 10 Army 

Medium Tactical Vehicle Replacement 11 Marine Corps

Heavy Heavy Expanded Mobility Tactical Truck 6 Army 

Palletized Load System 1 Army 

M915 Series Line Haul Tractor 2 Army 

Heavy Equipment Transport System 1 Army 

Logistics Vehicle System Replacement 3 Marine Corps

Not applicablea Firefighting Truck 2 Army 

Mine Resistant Ambush Protected vehicle 13 Army, Marine Corps, Air Force, Navy

Source: GAO summary of DOD information.

a

The military services do not classify these vehicles by class. 

Requirements for TWVs have evolved over the last decade, in part, due 

to the operational threats encountered in Afghanistan and Iraq. TWVs 

were traditionally viewed as utility vehicles that required little armor 

because the vehicles operated behind the front lines. However, the tactics 

used against forces in these countries dictated that vehicles needed more 

protection. For example, the HMMWV was conceived and designed to 

support operations in relatively benign environments behind the front line, 

but it proved to be highly vulnerable to attacks from improvised explosive 

devices, rocket-propelled grenades, and small arms fire when it was 

required to operate in urban environments. As a result, DOD identified an 

urgent operational need for armored tactical vehicles to increase crew 

protection and mobility of soldiers. Although the initial solution—the UpArmored HMMWV—provided greater protection, the enemy responded by 

increasing the size, explosive force, and type of improvised explosive 

devices, which were capable of penetrating even the most heavily 

armored vehicles. Consequently, the Mine Resistant Ambush Protected 

(MRAP) vehicle was approved in 2007 as a rapid acquisition capability. 

DOD recognized that no single manufacturer could provide all of the 

vehicles needed to meet requirements quickly enough, so it awarded 

contracts to multiple manufacturers.
 

Page 6 GAO-12-859 Industrial Base 

The AECA authorizes the President to control the export of arms, such as 

TWVs. 7 The authority to promulgate regulations on these items has been 

delegated to the Secretary of State.8 State administers arms transfer 

controls through the International Traffic in Arms Regulations and 

designates, with the concurrence of DOD, the articles and services 

deemed to be arms.9 These arms constitute the United States Munitions 

List (USML).10

Arms, including TWVs, can be sold and exported to foreign governments 

through the FMS program or DCS. Under the FMS program, the U.S. 

government procures items on behalf of eligible foreign governments 

using the same acquisition process used for its own military needs. While 

State has overall regulatory responsibility for the FMS program and 

approves such sales of arms to eligible foreign governments, DOD’s 

Defense Security Cooperation Agency administers the program. 

Alternatively, the DCS process allows foreign governments to directly 

negotiate with and purchase arms from U.S. manufacturers. For TWVs 

controlled on the USML, manufacturers must generally apply for an 

export license to State’s Directorate of Defense Trade Controls, which 

authorizes the export of arms to foreign governments.

DOD’s TWVs are generally designated as Category VII 

(Tanks and Military Vehicles) items on the USML.

11

State officials assess all arms export requests through the FMS program 

and DCS license applications against 12 criteria specified in the 

Conventional Arms Transfer Policy, as summarized in table 2.12

 

7

22 U.S.C. § 2778(a).

DOD 

officials assess the technical risks of the sensitive or classified electronic 

equipment associated with the sale of TWVs to foreign governments, 

including the type of armor, sensors or weapons attached to the vehicle, 

and any signature information. Aside from these technologies, State and 

8

Exec. Order No. 11,958, 42 Fed. Reg. 4,311 (Jan. 24,1977).

9

22 C.F.R. §§ 120 - 130. 

1022 C.F.R. § 120.2 and Part 121.

11While most defense articles and services on the USML require a license for export, the 

International Traffic in Arms Regulations contain some exemptions and authorize 

exceptions.

12According to Presidential Decision Directive 34, all arms transfer decisions should take 

into account the 12 criteria identified in the conventional arms transfer policy.

U.S. Arms Transfer Control 

Regimes 
 

Page 7 GAO-12-859 Industrial Base 

DOD officials said the departments generally consider the technology 

associated with TWVs comparable to commercially available trucks and 

do not have any additional policies pertaining to the sale of TWVs to 

foreign governments.

Table 2: Conventional Arms Transfer Policy Criteria

1. Consistency with U.S. regional stability interests, especially when considering 

transfers involving power projection capability or introduction of a system which may 

foster increased tension or contribute to an arms race.

2. The degree to which the transfer supports U.S. strategic and foreign policy interests 

through increased access and influence, allied burden sharing, and interoperability.

3. The human rights, terrorism and proliferation record of the recipient and the potential 

for misuse of the export in question.

4. Consistency with international agreements and arms control initiatives.

5. Appropriateness of the transfer in responding to legitimate U.S. and recipient 

security needs.

6. The impact of the proposed transfer on U.S. capabilities and technological 

advantage, particularly in protecting sensitive software and hardware design, 

development, manufacturing, and integration knowledge.

7. The degree of protection afforded sensitive technology and potential for 

unauthorized third-party transfer, as well as in-country diversion to unauthorized 

uses.

8. The ability of the recipient effectively to field, support, and appropriately employ the 

requested system in accordance with its intended end-use.

9. The risk of revealing system vulnerabilities and adversely impacting U.S. operational 

capabilities in the event of compromise.

10. The impact of U.S. industry and the defense industrial base whether the sale is 

approved or not.

11. The availability of comparable systems from foreign suppliers.

12. The risk of adverse economic, political or social impact within the recipient nation 

and the degree to which security needs can be addressed by other means.

Source: Department of State.

In accordance with the AECA, recipient countries of arms, including 

TWVs, must generally agree to a set of U.S. arms transfer conditions, 

regardless if sold through the FMS program or DCS.13

 

13See, e.g., 22 U.S.C.§ 2753.

The conditions 

include agreeing to use the items only for intended purposes without 

modification, not to transfer possession to anyone not an agent of the 

recipient country without prior written consent of the U.S. government, 
 

Page 8 GAO-12-859 Industrial Base 

and to maintain the security of any defense article with substantially the 

same degree of protection afforded to it by the U.S. government. To 

ensure compliance with these conditions, recipient countries must permit 

observation and review by U.S. government representatives on the use 

and possession of U.S. TWVs and other arms.

While the majority of TWVs that DOD purchases are regulated on the 

USML, a small number that lack armor, weapons, or equipment that 

would allow armor or weapons to be mounted are considered to be dualuse items—having both commercial and military applications. These 

items are controlled under the Export Administration Act of 1979,14 which 

established Commerce’s authority to control these items through its 

Export Administration Regulations and Commerce Control List.15 On the 

Commerce Control List, DOD’s TWVs are generally designated as 

Category 9 (Propulsion Systems, Space Vehicles, and Related 

Equipment) items. For DCS of such items, U.S. manufacturers must 

comply with the Export Administration Regulations to determine if an 

export license from the Commerce’s Bureau of Industry and Security is 

required.

 

14Authority granted by the act lapsed on August 20, 2001. 50 U.S.C. app. § 2419. 

However, Executive Order 13222, Continuation of Export Control Regulations, which was 

issued in August 2001 under the authority provided by the International Emergency 

Economic Powers Act (50 U.S.C. § 1702), continues the controls established under the 

act and the implementing Export Administration Regulations. Executive Order 13222 

requires an annual extension and was recently renewed by Presidential Notice on August 

15, 2012. 77 Fed. Reg. 49699 (Aug. 16, 2012). 

15Under the Export Control Reform initiative, State has proposed revisions to Category VII 

of the USML that, among other things, are intended to more clearly identify ground 

vehicles controlled on the USML and those controlled on the Commerce Control List. The 

proposed rule would also move certain spare and replacement parts from the USML to the 

Commerce Control List. State officials did not have a timeframe for the completion of 

these proposed changes. 76 Fed. Reg. 76100 (Dec. 6, 2011).
 

Page 9 GAO-12-859 Industrial Base 

The U.S. TWV industrial base includes seven vehicle manufacturers, over 

90 major subsystem suppliers, and potentially thousands of parts and 

component suppliers. Four of the seven manufacturers provided 

approximately 92 percent of all TWVs purchased by DOD in fiscal years 

2007 through 2011. Figure 1 identifies the manufacturers, the vehicles 

they produced, and the percent of all vehicles purchased by DOD from 

each manufacturer in fiscal years 2007 through 2011.

U.S. TWV Industrial 

Base Includes a 

Number of 

Manufacturers Whose 

Reliance on Sales to 

DOD Vary

Numerous Vehicle 

Manufacturers and 

Suppliers Comprise the 

U.S. TWV Industrial Base
 

Page 10 GAO-12-859 Industrial Base 

Figure 1: TWV Manufacturers, Vehicles Produced, and Market Share for DOD TWVs, 

Fiscal Years 2007 through 2011

a

General Dynamics acquired Force Protection in December 2011. 

Although these manufacturers produced 11 different families of TWVs, 

which included over 50 vehicle variants, they generally relied on common 

suppliers for major subsystem components. For example, the 

manufacturers relied on six or fewer suppliers to provide components, 

such as engines or tires. In contrast, the manufacturers relied on more 

than 25 armor suppliers, in part, because there was a shortage of vehicle 

armor during initial MRAP production. DOD reported that the 

requirements for armor, in response to the conflicts in Iraq and 

Afghanistan, provided an opportunity for several suppliers to begin 

producing armor, which eventually resolved the armor shortage. In 

addition to these suppliers, manufacturers we met with reported there 

were potentially thousands of other companies that produced parts for 

these vehicles. See figure 2 for more information on the number of 

suppliers that produced major subsystems on DOD’s TWVs.
 

Page 11 GAO-12-859 Industrial Base 

Figure 2: Commonality of Suppliers for Major Vehicle Subsystems in DOD TWVs

Note: For the purposes of this analysis, DOD and manufacturers excluded items, such as armaments 

and mission equipment (communications and situational awareness subsystems), because the 

military services buy these items for their vehicles and provide them as government furnished 

equipment. Additionally, 125 suppliers are indicated in the figure but some suppliers provided 

components for multiple subsystems, reducing the total to 91 suppliers. 

DOD purchased over 158,000 TWVs in fiscal years 2007 through 2011 

but plans to buy significantly less from now through fiscal year 2017. DOD 

demands for TWVs increased dramatically in response to the operational 

demands and threats experienced by U.S. forces during Operation 

Enduring Freedom and Operation Iraqi Freedom. For example, between 

fiscal years 1998 through 2001, before these two wars began, Army 

budget documents indicate plans to purchase approximately 

5,000 HMMWVs. After the start of Operation Enduring Freedom, Army 

budget documents in 2003 reflected an increased requirement for 

HMMWVs and, at the time, it planned to purchase approximately 23,000 

though fiscal year 2009. However, after Operation Iraqi Freedom began, 

the need for HMMWVs increased further and the Army reported that it 

ultimately purchased approximately 64,000 between 2003 through 2009.

As U.S. forces began to draw down from the conflicts in Iraq and 

Afghanistan, DOD’s operational requirements for TWVs declined. For 

example, while DOD bought over 100,000 TWVs in fiscal years 2007 and 

DOD Plans to Buy Few 

TWVs over the Next 

Several Years
 

Page 12 GAO-12-859 Industrial Base 

2008, DOD plans to purchase less than 1,000 TWVs in fiscal years 2015 

and 2016. In all, DOD plans to purchase approximately 8,000 TWVs in 

fiscal years 2012 through 2017, as shown in figure 3.

Figure 3: Declining DOD Purchases by TWV Family, Fiscal Years 2007 through 2017

Future defense budgets will likely constrain new vehicle purchases and 

the size of a fleet the military services will be able to sustain. Army 

officials told us that it would cost approximately $2.5 billion per year to 

sustain its current fleet of approximately 260,000 TWVs and meet any 

new TWV requirements. Officials stated, however, that the Army can no 

longer afford and does not need such a sized fleet, in part, due to budget 

cuts and potential force structure changes. The Army is re-evaluating how 

many TWVs it needs and can afford, which will be outlined in a revised 

TWV strategy. In developing this revised strategy, Army officials 

recognize that the Army has a relatively young fleet of TWVs, averaging 

9 years of age, many of which will be part of its fleet through 2040.
 

Page 13 GAO-12-859 Industrial Base 

While this revised strategy has not been completed, the Army has already 

made changes to reduce its TWV costs. For example, in February 2012 

the Army reduced the number of FMTVs it planned to purchase by 

approximately 7,400 vehicles. At that time, the Army also terminated a 

HMMWV modernization effort, known as the Modernized Expanded 

Capability Vehicle, which was intended to improve vehicle performance 

and crew protection on over 5,700 HMMWVs. Officials stated that this 

effort was terminated, in part, because of DOD-wide funding constraints. 

Army officials estimate that these actions will result in a total savings of 

approximately $2.7 billion in fiscal years 2013 through 2017. Furthermore, 

Army officials stated that the Army plans to reduce the size of its TWV 

fleet to match force structure requirements. They also stated that, as of 

July 2012, the Army plans to reduce its total fleet by over 42,000 vehicles. 

Officials added that more vehicles could be divested depending on any 

future force structure changes and budget constraints.

Despite budget constraints, the industrial base will have some 

opportunities over the next several years to produce a new TWV for DOD. 

The Joint Light Tactical Vehicle (JLTV) is a new DOD program, designed 

to fill the gap between the HMMWV and MRAP by providing near-MRAP 

level protection while maintaining all-terrain mobility. As we previously 

reported, the Army and Marine Corps are pursuing a revised 

developmental approach for JLTV and awarded technology development 

contracts to three industry teams.16

In addition to new production, the Army and Marine Corps also plan to 

invest in sustainment efforts that could be completed by the U.S. TWV 

industrial base. These efforts include restoring or enhancing the combat 

 The program completed the 

technology development phase in January 2012. Last month, the Army 

awarded three contracts for the JLTV’s engineering and manufacturing 

development phase. While production contracts will not be awarded for 

some time, DOD reports that it plans to purchase approximately 

55,000 JLTVs over a 25-year period with full rate production beginning in 

fiscal year 2018. With production of other TWVs for DOD largely coming 

to an end in fiscal year 2014, DOD considers the JLTV program to be 

critical in maintaining an industrial base to supply TWVs to the military.

 

16GAO, Defense Acquisitions: Future Ground-Based Vehicles and Network Initiatives 

Face Development and Funding Challenges, GAO-12-181T (Washington, D.C.: Oct. 26, 

2011); and Defense Acquisitions: Issues to Be Considered as DOD Modernizes Its Fleet 

of Tactical Wheeled Vehicles, GAO-11-83 (Washington, D.C.: Nov. 5, 2010).
 

Page 14 GAO-12-859 Industrial Base 

capability of vehicles that were destroyed or damaged due to combat 

operations.17 For example, Marine Corps officials reported that it plans to 

recapitalize approximately 8,000 HMMWVs beginning in fiscal year 2013. 

In addition, the Army is in the process of resetting the portion of its FMTV 

fleet that was deployed through at least fiscal year 2017 as well as 

recapitalizing some of its heavy TWVs.

Despite the significant decrease in DOD TWV purchases, the four 

manufacturers we met with generally reported that these sales remain an 

important part of their revenue stream. However, there is a wide range in 

the degree to which the manufacturers were reliant on DOD in a given 

year. For example, as shown in table 3, one manufacturer reported that 

for 2007 its revenue from sales to DOD accounted for 4 percent of its total 

revenue while another manufacturer reported such revenue was as high 

as 88 percent, with the other two manufacturers falling within that range.

Table 3: Ranges of TWV Manufacturer Reported Reliance on DOD Sales

Percent of revenue from DOD sales

Year Low High

2007 4% 88%

2009 26% 72%

2011 14% 73%

Source: GAO analysis of manufacturer data.

Among the four manufacturers, the extent of reliance on revenue from 

DOD sales varied, in part, because of vehicles sold in the commercial 

truck and automotive sectors. Aside from producing TWVs, 

manufacturers produced or assembled commercial vehicles, such as 

wreckers, fire trucks, school buses, and handicap-accessible taxis, as 

 

17The Army defines reset and recapitalization efforts as actions taken to restore 

equipment to a desired level of combat capability commensurate with the equipment’s 

future mission. It encompasses maintenance and supply activities that restore and 

enhance combat capability to equipment that was destroyed, damaged, stressed, or worn 

out beyond economic repair due to combat operations by repairing, rebuilding, or 

procuring replacement equipment. Recapitalization rebuilds or repairs equipment to a 

level that improves the performance capabilities of the equipment or returns the 

equipment to a “zero mile/zero hour” level with original performance specifications.

Manufacturer Reliance on 

Sales to DOD Varied
 

Page 15 GAO-12-859 Industrial Base 

well as vehicle components, such as engines, transmissions, and 

suspensions.

According to the four manufacturers, their suppliers of TWV major 

subsystem components generally produced items in the commercial 

automotive and truck industries. For example, according to 

manufacturers, suppliers generally produced parts, such as engines, 

transmissions, axles, and tires for their commercial vehicles in addition to 

supplying parts for the TWVs they produce. However, vehicle armor, a 

major TWV component, is primarily a defense-unique item and those 

suppliers were not typically used in the manufacturers’ commercial 

vehicles.

DOD currently has several studies under way to better understand the 

U.S. TWV industrial base, its capabilities, and how declining DOD sales 

may affect it. In 2011, DOD’s Office of Manufacturing and Industrial Base 

Policy began a multifaceted review of the U.S. TWV industrial base that 

includes surveying suppliers, conducting site visits, and paneling experts. 

The Army’s TACOM Life Cycle Management Command also has ongoing 

studies, including a review to assess the health of the industrial base and 

others intended to identify its supplier base and any risks associated with 

sustaining DOD’s TWV fleet. Some of the goals of these different studies 

are to better understand how different vehicle supply chains affect others, 

identify single point failures in the supply chain, and provide DOD 

leadership with improved information so they may better tailor future 

acquisition policies.

U.S. manufacturers sold relatively few TWVs for use by foreign 

governments in fiscal years 2007 through 2011, when compared to the 

158,000 vehicles sold to DOD over that same period. However, most of 

the manufacturers we met with stated that while sales of TWVs to foreign 

governments have not equaled those sold to DOD, such sales are 

becoming an increasingly important source of revenue as DOD 

purchases fewer vehicles. According to data provided by DOD and the 

four manufacturers, foreign governments purchased approximately 

28,000 TWVs, either through the FMS program or through DCS, in fiscal 

years 2007 through 2011. In addition to these sales to foreign 

governments, manufacturers reported they exported approximately 

5,000 other TWVs that were different vehicles than those DOD purchased 

during that time period. Nearly all TWVs sold to foreign governments 

were sold through the FMS program rather than through DCS. DOD 

DOD Has Several Studies 

Under Way to Assess the 

U.S. TWV Industrial Base

TWV Sales to Foreign 

Governments Were 

Relatively Few and 

Generally Purchased 

with U.S. Funds
 

Page 16 GAO-12-859 Industrial Base 

reports that about 27,000 TWVs were sold through the FMS program, 

while the four manufacturers we met with reported that about 

700 vehicles were sold through DCS in fiscal years 2007 through 2011.18

Figure 4: Comparison of TWV Sales to DOD and Foreign Governments, Fiscal Years 

2007 through 2011

See figure 4 for a comparison of TWVs sold to DOD and to foreign 

governments through the FMS program and DCS in fiscal years 2007 

through 2011.

a

DCS data only reflects data provided by the four manufacturers we met with and is limited to vehicle 

models purchased by DOD. 

Approximately 95 percent of TWVs purchased through the FMS program 

from fiscal year 2007 through 2011 were paid for using U.S. government 

funding through different security and military assistance programs. The 

U.S. Congress authorizes and appropriates funds for assistance 

 

18This includes the export of TWVs controlled under State or Commerce regulations. 
 

Page 17 GAO-12-859 Industrial Base 

programs that support activities, such as security, economic, and 

governance assistance in foreign countries. Examples of such assistance 

programs include the Afghanistan Security Forces Fund and Iraq Security 

Assistance Fund, which were sources of funding for TWVs purchased for 

Afghanistan and Iraq through the FMS program. While Afghanistan and 

Iraq were the largest recipients of U.S. manufactured TWVs through such 

assistance programs, DOD officials informed us that as the war efforts 

conclude there, U.S. funding for TWVs for these two countries’ security 

forces has declined and is not planned to continue. In addition, a smaller 

number of TWVs were sold through the FMS program to countries using 

their own funds. Figure 5 identifies the countries that purchased the most 

U.S. manufactured TWVs with U.S. or their own funds through the FMS 

program.
 

Page 18 GAO-12-859 Industrial Base 

Figure 5: Comparison of Funding Types for TWV FMS, Fiscal Years 2007 through 2011
 

Page 19 GAO-12-859 Industrial Base 

U.S. manufacturers of TWVs and foreign government officials we met 

with identified a number of interrelated factors that they perceive as 

affecting whether a foreign government decides to purchase U.S. 

manufactured TWVs. These included potential future competition from 

transfers of excess (used) U.S. military TWVs, competition from foreign 

manufacturers, and differing foreign requirements for TWVs. In addition, 

these U.S. manufacturers and foreign government officials expressed 

mixed views on the effect the U.S. arms transfer control regimes may 

have on foreign governments’ decisions to buy U.S. vehicles. These 

officials said that processing delays and end-use restrictions can 

influence foreign governments’ decisions to buy U.S. TWVs. Despite 

these issues, foreign government officials said the U.S. arms transfer 

control regimes would not adversely affect their decisions to purchase a 

U.S.-manufactured TWV that best meets their governments’ 

requirements.

The U.S. manufacturers we met with regard the Army’s intent to reduce 

its TWV fleet size as a risk to their future sales of TWVs to foreign 

governments. Army officials said it is still assessing its TWV requirements 

and potential plans to divest over 42,000 vehicles, but they acknowledge 

that a number of these TWVs could be transferred through the FMS 

program. The four U.S. manufacturers consider these used vehicles to be 

a risk to their future sales of U.S. TWVs to foreign governments because 

foreign governments could be less likely to purchase new vehicles from 

U.S. manufacturers if the U.S. Army transfers these used vehicles 

through foreign assistance programs. U.S. manufacturers told us they 

would like more involvement in DOD’s decisions on its plans for these 

divested vehicles so they may provide input on potential effects on the 

industrial base. Commerce’s Bureau of Industry and Security reviews 

proposed FMS of divested items to identify effects on the relevant 

industry. During this review, Commerce provides industry with the 

opportunity to identify any impacts of the potential FMS on marketing or 

ongoing sales to the recipient country. When approving these transfers, 

State and Defense Security Cooperation Agency officials said the 

U.S. government must also weigh national security and foreign policy 

concerns, which could outweigh industrial base concerns with transfers of 

used DOD TWVs to foreign countries.

While concerned about the potential for competition from the FMS of 

these retired vehicles, U.S. manufacturers also view these planned 

divestitures as a potential to provide repair or upgrade business that 

could help sustain their production capabilities during a period of low 

U.S. Manufacturers 

and Foreign 

Governments 

Identified Multiple 

Interrelated Factors 

That May Affect TWV 

Foreign Sales

Potential Transfers of Used 

Army TWVs Viewed as 

Risk by Manufacturers to 

Future Sales of U.S. TWVs 

to Foreign Governments
 

Page 20 GAO-12-859 Industrial Base 

DOD demand. Some manufacturers we met with stated that they would 

like to purchase DOD’s used TWVs, before they are made available to 

foreign governments, so they may repair or upgrade them and then sell 

them to foreign governments. DOD is currently reviewing its policies to 

determine which vehicles, if any, could be sold back to manufacturers. 

Another manufacturer, while not interested in purchasing the vehicles, 

expressed interest in providing repair or upgrade services on the used 

TWVs before they are sold to foreign governments. Defense Security 

Cooperation Agency officials stated that excess defense articles, such as 

the used TWVs, are generally made available to foreign governments in 

“as is” condition and recipient countries are responsible for the cost of any 

repairs or upgrades they may want to make. They added that in such 

instances, it could be possible for U.S. manufacturers to perform such 

services, but it would be at the direction of the purchasing country, not the 

U.S. government.

Foreign government and manufacturer officials that we interviewed 

identified a number of TWV manufacturers that compete with U.S. 

manufacturers for international sales. Examples of foreign manufacturers 

are shown in table 4.

Foreign Competition, 

Different Vehicle 

Requirements, and 

Concerns Associated with 

U.S. Arms Transfer Control 

Regimes Affect Foreign 

Governments’ Decisions to 

Purchase U.S. TWVs
 

Page 21 GAO-12-859 Industrial Base 

Table 4: Foreign TWV Manufacturers as Identified by Manufacturers and Foreign 

Governments

Manufacturer Headquarters location

Ashok Leyland India

DAF Truck The Netherlands

General Dynamics European Land Systems Spain

IVECO Italy

Krauss-Maffei Wegmann Germany

Land Rover The United Kingdom 

Mahindra India

Mercedes Benz Germany

Nimr United Arab Emirates

Patria Finland

Renault France

Rheinmetall MAN Germany

Tata Motors India

Tatra Czech Republic

Toyota Japan

Thales France

UROVESA Spain

Source: Officials from foreign governments and U.S. manufacturers.

Officials from two countries that had not purchased U.S. manufactured 

TWVs explained that their countries have a well established automotive 

industrial base capable of producing TWVs that meet their governments’ 

needs. While all of the foreign officials we interviewed reported that their 

countries had no policies that favor their domestic manufacturers, 

governments that have not purchased U.S. TWVs generally purchased 

vehicles from domestic manufacturers. For example, foreign officials from 

one country said that all of their government’s TWVs are assembled 

within its borders.

While all of the competitors to U.S. TWV manufacturers are not 

headquartered in the purchasing countries, foreign officials reported that 

many of these companies have established dealer and supplier networks 

within their countries. Foreign officials reported that these domestic dealer 

and supplier networks make vehicle sustainment less expensive and 

more manageable, in part, because it is easier and quicker to obtain 

replacement parts or have vehicles repaired. In contrast, foreign officials 

said that U.S. TWV manufacturers do not generally have the same dealer 
 

Page 22 GAO-12-859 Industrial Base 

and supplier networks within their countries. They added that this can 

make maintenance of the U.S. vehicles more expensive, in part, due to 

the added cost of shipping.

In addition to the number of TWV manufacturer competitors, foreign 

officials also reported that there is limited foreign demand for TWVs. 

Foreign officials reported that their governments purchase relatively few 

TWVs compared to the U.S. government, in part, because their fleet size 

requirements are much smaller. Foreign officials we interviewed reported 

TWV fleets that ranged in size from 2 to 9 percent the size of the U.S. 

Army’s fleet. For example, foreign officials from one country stated that 

their military was in the process of upgrading its entire fleet of 

approximately 7,500 vehicles, which is less than 3 percent of the size of 

the U.S. Army’s TWV fleet.

Foreign government officials also explained that U.S. manufacturers can 

generally produce TWVs to meet their governments’ requirements, but 

the vehicles U.S. TWV manufacturers are producing for DOD do not 

necessarily align with these requirements. Foreign government officials 

identified the following areas where their governments’ requirements 

differ from those of DOD:

• DOD’s TWVs are generally larger than what their government can 

support. For example, officials from one foreign government reported 

that its military considered purchasing U.S. manufactured MRAP

vehicles but did not have the cargo planes required to transport a 

vehicle the size and weight of DOD’s MRAP vehicles. Instead, 

according to the official, this country purchased a mine and ambush 

protected vehicle developed by one of its domestic manufacturers that 

is smaller and lighter than the DOD’s MRAP vehicles and better 

aligned with its transportation capabilities.

• Their governments do not always require the same level of 

capabilities afforded by DOD’s TWVs and, in some cases, 

requirements may be met by commercially available vehicles. For 

example, foreign government officials identified a number of vehicles 

in their governments’ tactical fleets that are based on commercial 

products from automobile companies such as Jeep and Land Rover.

• Their governments have different automotive or design standards for 

military vehicles that do not always align with those produced for DOD 

by U.S. manufacturers. For example, officials from one country said 

that their military is required to purchase right-side drive vehicles, 

which are not always supported by U.S. manufacturers. While their 

military can obtain a waiver to purchase a left-side drive vehicle, this 
 

Page 23 GAO-12-859 Industrial Base 

presents training challenges as the majority of the vehicles in its fleet 

are right-side drive vehicles. Foreign officials said that while U.S. 

manufacturers are capable of meeting these requirements, foreign 

competitors may be more familiar with these requirements. 

Manufacturers that we interviewed said they produce or are 

developing TWVs to better meet foreign customers’ requirements. For 

example, one U.S. manufacturer said it was developing a right-side 

drive variant of one of its vehicles and another manufacturer said that 

it has a line of TWVs for its international customers that better meets 

those requirements.

U.S. manufacturers and foreign officials expressed mixed views on the 

effect the U.S. arms transfer control regimes may have on the sale of 

U.S.-manufactured TWVs to foreign customers. Officials we met with 

reported that, generally, the U.S. arms transfer control regimes do not 

inhibit foreign governments from purchasing U.S. manufactured TWVs. 

Accordingly, we found that once the FMS and DCS process was initiated, 

no eligible foreign sales or licenses for U.S. TWVs were denied. For 

example, State officials reported that no countries eligible to participate in 

the FMS program were denied requests to purchase TWVs in fiscal years 

2007 and 2011. Similarly, State DCS license data indicated that no 

licenses for vehicle purchases were denied from fiscal years 2008 

through 2011.

While sales of TWVs to foreign governments are generally approved by 

the U.S. government once initiated, U.S. manufacturers and foreign 

officials said that foreign governments may prefer to purchase vehicle 

manufactured outside the United States, in part, due to the amount of 

time to process sales and licenses requests and end-use restrictions 

associated with the U.S. arms transfer control regimes. Specifically, 

manufacturers said the congressional notification process can result in 

lengthy delays during the FMS and DCS approval process. The AECA 

requires notification to Congress between 15 and 45 days in advance of 

its intent to approve certain DCS licenses or FMS agreements.19

 

1922 U.S.C. § 2776.

Preceding the submission of this required statutory notification to the U.S. 

Congress, State provides Congress with an informal review period that 

does not have a fixed time period for action. One manufacturer stated that 

this informal review period, in one case, lasted over a year and, after 
 

Page 24 GAO-12-859 Industrial Base 

which, the prospective customer decided to not continue with the 

purchase. Another manufacturer said that the informal congressional 

notification process is unpredictable because there is no set time limit for 

review, making it difficult for the manufacturer to meet delivery 

commitments to foreign customers. State officials acknowledged that the 

informal congressional notification period can delay the DCS and FMS 

process because there is no designated time limit for review. According to 

State officials, the department established a new tiered review process in 

early 2012 to address this issue by establishing a time bounded informal 

review period that is based on the recipient country’s relationship with the 

U.S. government. The formal notification period remains unchanged.

Foreign officials said when TWVs that meet their governments’ 

requirements are available from manufacturers outside the United States, 

AECA restrictions on third party transfers and end-use administrative 

requirements associated with U.S. manufactured vehicles could affect 

their governments purchasing decisions. Foreign officials explained that 

there are a number of TWV manufacturers outside the United States that 

can meet their requirements and vehicles sold by those manufacturers do 

not necessarily come with the same end-use restrictions as U.S. vehicles. 

For example, the AECA restricts the transfer of arms, including U.S. 

manufactured, TWVs to a third party without consent of the U.S. 

government.20

 

20As required by the ACEA, foreign governments may not transfer title to or possession of 

any defense articles or services to anyone not an officer, employee, or agent of that 

country unless the country receives prior consent from the U.S. government. 22 U.S.C. 

§ 2753.

Some foreign officials said their governments prefer to use 

private companies, when possible, to make repairs and maintain its TWV 

fleet because it can reduce costs compared to government repair work. 

These foreign officials said that U.S. third party transfer restrictions 

require that their governments obtain permission from the U.S. 

government before transferring a U.S. TWV to a private company for 

repairs, which creates an administrative burden. Additionally, foreign 

governments are required to maintain information on U.S. TWVs’ end-use 

and possession that must be available to U.S. officials when requested to 

ensure compliance with U.S. end-use regulations. Foreign officials from 

one country said the maintenance of this information is an administrative 

burden and will be more difficult to manage as their government tries to 

reduce its workforce in a limited budget environment. Foreign officials 

said that TWVs purchased from manufacturers outside of the Untied 
 

Page 25 GAO-12-859 Industrial Base 

States are not generally encumbered with these same restrictions and 

administrative burdens, making maintenance of these vehicles easier and 

cheaper, in some cases. State officials acknowledged these concerns 

from foreign governments but said these restrictions play an important 

role in protecting U.S. national security interests.

Foreign officials reported, however, that the U.S. arms transfer control 

regimes would not adversely affect their decision to purchase a U.S. 

vehicle that best meets their governments’ requirements in terms of 

capabilities and cost. Foreign officials said that U.S. manufacturers make 

vehicles that are reliable and highly capable. When their governments 

have requirements that align with those associated with U.S. 

manufactured vehicles, foreign officials said that the U.S. arms transfer 

control regimes would not be a factor in their governments’ decisions to 

purchase the vehicles. Foreign officials that we interviewed also said their 

governments are experienced buyers of U.S. arms and are able to 

successfully navigate the FMS and DCS processes and U.S. end-use 

restrictions to obtain the military equipment they require.

The volume of TWVs DOD purchased to meet operational requirements 

in Iraq and Afghanistan was unique due to specific threats. Many of these 

vehicles are no longer needed and DOD’s need for new TWVs is 

expected to decline in coming years. Further, given the current budgetary 

environment, DOD cannot afford to support the size of its current fleet or 

buy as many vehicles as it once did. Though U.S. manufacturers 

increased their production to meet those past needs, they will be 

challenged in responding to the sharp decline in DOD’s TWV 

requirements in future years. As DOD continues its studies of the U.S. 

TWV industrial base, it may be better positioned to address these 

challenges and how DOD can mitigate any risks to sustaining its TWV 

fleet. It is unlikely that sales to foreign governments will ever offset 

declines in sales to DOD, but foreign sales may be more important to the 

industrial base now more than ever. U.S. manufacturers, however, are 

presented with a number of factors that affect their ability to sell TWVs to 

foreign governments. While no foreign officials indicated that their 

governments would not buy U.S. TWVs, there has been relatively limited 

demand for the vehicles U.S. manufacturers have produced for DOD. 

Further, there are many foreign manufacturers that can supply vehicles 

that meet foreign governments’ requirements. Each of the U.S. 

manufacturers we met with was either selling or developing alternative 

vehicles that better meet foreign governments’ requirements, but the 

extent to which those efforts will stimulate additional sales has yet to be 

seen. Further, U.S. manufacturers raised concerns that their competitors 

Concluding 

Observations
 

Page 26 GAO-12-859 Industrial Base 

could eventually include the U.S. military as it makes plans to divest itself 

of used TWVs that it could make available to foreign governments at 

reduced costs or for free. Additionally, while U.S. manufacturers 

perceived the U.S. arms transfer control regimes to be more burdensome 

than those of other countries, the regimes are not a determining factor 

when foreign governments seek to purchase TWVs.

We provided a draft of this report to DOD, State, and Commerce, as well 

as the four manufacturers and five foreign governments with whom we 

met, for their review and comment. DOD and State provide technical 

comments and two of the manufacturers provided clarifications, which we 

incorporated into the report as appropriate. Commerce, two 

manufacturers, and the five foreign governments informed us that they 

had no comments.

We are sending copies of this report to the Secretary of Defense; the 

Secretaries of the Army and the Navy; the Secretary of State; Secretary 

of Commerce; and the four manufacturers and five foreign governments 

with whom we met. In addition, the report also is available at no charge 

on the GAO website at http://www.gao.gov.

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-4841 or martinb@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff members who made key 

contributions to this report are listed in appendix I.

Belva M. Martin

Director

Acquisition and Sourcing Management

Agency Comments

and Third-Party Views 
 

Page 27 GAO-12-859 Industrial Base 

List of Committees

The Honorable Carl Levin

Chairman

The Honorable John McCain

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Daniel Inouye

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable C.W. Bill Young

Chairman

The Honorable Norman Dicks

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: GAO Contact and Staff 

Acknowledgments

Page 28 GAO-12-859 Industrial Base 

Belva M. Martin (202) 512-4841 or martinb@gao.gov

In addition to the contact name above, the following staff members made 

key contributions to this report: Johana R. Ayers, Assistant Director; 

Patrick Dudley; Dayna Foster; Beth Reed Fritts; Justin Jaynes; Julia 

Kennon; Roxanna Sun; Robert Swierczek; Bradley Terry; Brian Tittle; and 

Alyssa Weir.

Appendix I: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Acknowledgments

(121026)
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