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Michelin Wins Military Ground Vehicle Tire Contract Worth $1.7 Billion

From theautochannel| January 29,2007

Defense Logistics Agency through its designated supply chain manager, Defense Supply Center Columbus, signed a contract Jan. 25, 2007 worth more than $852 million for land vehicle tires with Michelin North America Tire Company in Columbus. The contract is for a base period of five years with an option period for five additional years with a value of more than $850 million.

This contract, with a contract for aviation tires announced in late December, is the result of the Base Realignment and Closure Act 2005 that mandated commodity management privatization of tires. Previously managed by each of the armed services, tires purchased under these two contracts using the CMP mandate and managed by DLA, will save taxpayers a BRAC-estimated net savings of $172.8 million.

With the signing of these first-ever commodity management privatization contracts, Michelin will supply aviation and land vehicle tires to all the military services with oversight by DLA. The contract is the largest in monetary value ever signed by DSCC.

"Michelin will now be accomplishing all the tasks related to supply, storage and distribution of tires," said Matt Geary, DSCC project manager for DSCC's CMP contracting efforts. "DSCC will have oversight of the contracts, but Michelin will be doing everything else," he added.

Geary pointed out that the Navy has a similar contract with Michelin, which DLA will take over in fiscal 2009. Savings experienced by the Navy set the stage for the BRAC-mandated CMP effort.

"We are proud of the team for doing such a great job putting the contracts together and look forward to working with the services to ensure success," said DSCC Commander Navy Rear Adm. Charlie Lilli of the effort.

The contracts will be managed in the land supply chain at DSCC by an integrated support.

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