"Thales Australia, Force Protection Europe and General Dynamics Land Systems Australia are the three companies that will be given a shot at this important contract," said Greg Combet, minister for defense materiel and science.

The contract is worth up to $827 million and the three Australian-made prototypes will compete against prototypes being developed in the United States.

Combet said that the Australian companies have around six months to produce two test-drive-ready prototype vehicles each for the Land 121 Phase 4 Project for the Protected Mobility Vehicle -- Light prototype.

Under Land 121 around 1,300 PMV-L vehicles and trailers will replace the army's aging fleet of Land Rovers. Four variants will to be procured are for command, liaison, reconnaissance and utility. All must offer very high levels of protection from small arms fire, mines and improvised explosive devices.

"The Rudd government believes that Australia has some of the best defense equipment manufacturers in the world," Combet said. This decision will mean that they will have a fair chance to compete with other international competitors."

"The protected mobility vehicles will play an important role in keeping Australian troops safe in combat roles, including command, liaison and light battlefield resupply. They will be provided to the army's combat units and the air force's Air Field Defense Guards."

The announcement follows a decision in 2008 by the Australian government to participate in the U.S. Joint Light Tactical Vehicle program, which is also working on the development of protected mobility vehicle prototypes.

Thales Australia has facilities in Bendigo, Victoria state. General Dynamics Land Systems Australia has a site in the suburbs of Adelaide in South Australia state.

A statement from Force Protection Inc. in Ladson, S.C., said its Ocelot light protected vehicle is being put forward through its subsidiary Force Protection Europe. Executives from Force Protection met last year with several Australian state governments about the site of a manufacturing base, an important aspect of federal defense procurement policy.

Force Protection also said the U.K. Ministry of Defense invited Force Protection Europe to tender for a similar contract. The invitation came as a result of the British ministry of defense recently analyzing two Ocelot vehicles.

Thales Australia was initially left out of the running but has come into play with its Hawkei protected vehicle, which has been tested for more than 6,000 miles on-road and off-road.

The Hawkei is produced in partnership with Boeing Defense Australia and PAC Group, as well as Plasan, Thales's exclusive Australian partner for Land 121 and a major provider of combat armor solutions.

"Thales and our partners are already fully mobilized and well-advanced with the vehicle proving program," Chris Jenkins, Thales Australia's chief executive officer, said in a company statement. "Our next series of vehicles are already under construction and we are on track to meet the ambitious timetable to deliver prototypes for army testing by the end of the year."

Earlier this month General Dynamics Land Systems Australia was made preferred tenderer for a 5-year contract worth around $83 million in total to maintain the army's armored fighting vehicles.

Combet said that the performance-based deal from GDLS has incentives for improved efficiencies and performance.

The Australian army has more than 300 Abrams Tanks, M88A2 Hercules heavy equipment recovery vehicles and Australian Light Armored Vehicles, a version of the LAV-25 designed and manufactured by General Dynamics Land Systems Canada for the U.S. Marines.

The maintenance contract is expected to be signed by October.

A decision by the Australian government on a next-generation protected mobility vehicle is expected in late 2011.

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