The U.S. Marine Corps has decided to shelve a planned upgrade of its Humvee fleet due to budget cuts, an official said.

The service had planned to modernize several thousand of the iconic military vehicles as part of an acquisition effort called the sustainment modification initiative (SMI). The effort was put on hold because of automatic, across-the-board spending reductions known as sequestration.

"The program was, in fact, terminated," Bill Taylor, who oversees land systems for the service, told lawmakers Thursday during a hearing of the House Armed Services Committee on the Pentagon's fiscal 2016 budget for ground force and helicopter modernization programs.

Both the Army and the Marine Corps are developing a Humvee replacement called the Joint Light Tactical Vehicle. But the new light-duty utility vehicle will only replace about a third of the Humvee fleet, meaning the Cold War-era design will remain in the inventory for decades to come.

The Corps' modification initiative was aimed at upgrading some 6,700 Humvees known as the expanded capacity variant. The fourth-generation vehicles were modified to carry thousands of pounds of armor to protect troops in Iraq and Afghanistan, though they're no longer driven outside the wire. The extra weight strained the suspension, engine and transmission systems.

Taylor said that while service leaders made a decision to sustain rather than upgrade the existing Humvee fleet, they may opt to pursue the enhancements if funding becomes available in the future. He was responding to a question from Rep. Tammy Duckworth, a Democrat from Illinois and a former Army helicopter pilot who lost both her legs while serving in Iraq.

"We were allowed to continue the nonrecurring effort associated with that program such that we have actually completed the development work and put three capability packages on the shelf," he told lawmakers. "So, if in times of prosperity, the Marine Corps can return to those engineering proposals and reconsider instituting them in terms of procurement."

The Marine Corps is shrinking its Humvee fleet from 24,000 to 18,500, some 5,500 of which will eventually be replaced by JLTVs. The Army, meanwhile, is curtailing its light-duty vehicle inventory from about 120,000 to less than 110,000.

The services now plan to buy a total of 54,720 Joint Light Tactical Vehicles at an estimated cost of more than $30 billion, or about $559,000 per vehicle, according to Pentagon budget documents released on Thursday. That figure includes expenses for research and development, overhead and add-on equipment such as radios, weapons and armor.

Officials have said the cost of manufacturing the vehicle alone will be about $250,000.

Companies hoping the build the first 17,000 production models of the Joint Light Tactical Vehicle submitted their final bids to the Army last month.  Humvee-maker AM General, truck-maker Oshkosh Corp. and defense contracting giant Lockheed Martin Corp. are vying for the work.

Each of the firms has already delivered 22 prototypes to the Army for testing conducted last year at Fort Stewart, Georgia.

-- Brendan McGarry can be reached at brendan.mcgarry@military.com