NEWTOWN, Conn. - Although U.S. Army and U.S. Marine Corps procurement of the M777-series Joint Lightweight Howitzer was completed in 2011, export sales will continue to support the program through the mid-term of the forecast period.
While the British Army has never made a firm commitment to procure the M777, BAE Systems reportedly anticipated British Army procurement by producing the ordnance on its own. The United Kingdom still intends to procure at least 71 howitzers through 2019.
In May 2012, the Indian government finally approved the $647 million procurement contract for 145 M777A2 howitzers. In November 2012, the Indian Ministry of Defence issued the formal letter of request for the howitzers via U.S. Foreign Military Sales funding. Deliveries are to be completed by 2018.
However, on February 24, 2014, India's Defense Acquisition Council chose to defer the purchase, citing disagreements with BAE Systems regarding the offset obligation timeline. BAE wants six years with which to fulfill their offsets rather than four as per India's request. Indian law requires foreign vendors to provide for direct offsets up to 30 percent of the contract value.
Worse for India's purchasing power in the deal, BAE Systems - tired of waiting on an Indian order that never arrived - opted to shut down its M777 facility in northern England as a cost-savings measure. Thus the cost for reopening the M777 line will ultimately spike in the future, increasing India's final price tag if they ever decide to get serious and move forward with the M777A2 procurement.
You have 0 item(s) in your cart