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American taxpayers could save nearly $173 million on the purchase of military aviation and land-based vehicle tires over the next 10 years from a subsidiary of Michelin North America, according to the Defense Supply Center in Columbus, Ohio.

The contract with Michelin Aircraft Tire Co. LLC was signed recently. Also, another contract -- this for land vehicle tires -- will be announced later this month. The aviation tires, to be produced primarily at Michelin's Norwood, N.C., plant, will be used by aircraft such as the C-130 Hercules and the C-5 Galaxy, fighters such as F-16 Falcons and bombers such as the B-52 Stratofortress.

Savings generated by the contract are the result of the consolidated purchase from one manufacturer for Army and Air Force vehicles rather than separate purchases through the various military services, said Matt Geary, project manager for DSCC.

The initial five-year contract is for $368 million for aviation tires. It has an additional five-year option period worth more than $300 million.

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This is the first ever Commodity Management Privatization contract, required by the 2005 Base Realignment and Closure Act. It also is the largest contract in monetary value ever signed by the Defense Supply Center.

"Michelin will now be accomplishing all the tasks related to supply, storage and distribution of aviation tires," Geary said. The supply center "will have oversight of the contract, but Michelin will be doing everything else."

"It's fairly unusual," Lynn Mann, a Michelin North America spokeswoman, said of the contract that calls for logistics as well as manufacturing. "We're actually the logistics provider. We even manage competitive brands. We're kind of the brains behind it."

Michelin has the expertise to handle the logistics portion of the contract, she said, and it also has partners working with it.

The Navy has a similar contract with Michelin, Geary said, which the Defense Logistics Agency will take over in fiscal 2009. Savings from the Navy program generated interest in the new contract.

"This was a monumental effort," he said, and could not have happened without information from the U.S. Navy and its Michelin contract. "We went from having no knowledge about the service-managed programs and the tire industry in January 2006 to getting this contract signed in less than a year. We had to learn everything."

"We felt our expertise from the Navy contract gave us a leg up," Mann said.

A tire industry day was held in March, with 38 companies attending, Geary said. DSCC performed market research, met with tire companies and manufacturers and received input from as many sources as possible. The solicitation for the contract was issued July 10.

DSCC 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. The agency buys materiel, monitors inventory levels, maintains technical data and assures quality conformance of spare parts.

DLA provides supply support and technical and logistics services to the U.S. military services and some federal civilian agencies.