Michelin Wins Military Ground Vehicle Tire Contract Worth $1.7 Billion

COLUMBUS, Ohio, Jan. 26 -- 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.

DSCC, a field activity of the Defense Logistics Agency, serves more than 24,000 military and civilian customers and 10,000 contractors as one of the largest suppliers of weapon systems parts in the world. DSCC's workforce of about 2,400 purchases materiel, monitors inventory levels, maintains technical data, and assures quality conformance of spare parts. These spare parts vary from common items such as vehicle parts and accessories, to complex mechanical and electronic repair parts for weapon systems.

DLA provides supply support, and technical and logistics services to the U.S. military services and several federal civilian agencies. Headquartered at Fort Belvoir, Va., the agency is the one source for nearly every consumable item, whether for combat readiness, emergency preparedness or day-to-day operations inside the Department of Defense. More information about DLA is available at http://www.dla.mil/.