The vehicle's nickname came from two sources: "Gama" from the name of the inventor of its powered articulated joint, Roger Gamaunt, and "Goat" for its mountain goat-like off-road ability.

Of 50 companies solicited for XM561 proposals, six entered the competition,[2] including Clark, General Motors and LeTourneau Technologies, but on 15 March 1963, the research & development contract was awarded to Chance Vought division of LTV Aerospace, Dallas, Texas,[3] best known for their combat aircraft (though, actually the company did have some experience in designing ground vehicles, particularly, a predecessor of Gama Goat, but they didn't have the truck assembly lines and production experience comparable to those of the mentioned car manufacturers).

[1] The principal competitor to the Goat was a tracked XM571 Articulated Utility Carrier developed by Canadair Ltd. of Montreal (yet another aerospace company,) which eventually lost the contest.

[4] Final construction of the vehicles was conducted by the Consolidated Diesel Electric Company (CONDEC) at their factory in Charlotte, North Carolina (on 11 June 1968, the Army awarded them a 3-year contract for 15,274 vehicles, 13,516 Army and 1,758 Marine Corps, at a total price of about $132.1 million, on the same day Detroit Diesel Division of General Motors received $30 million 3-year contract for the engines).

[citation needed] The double hull construction and complex articulated drivetrain made maintenance difficult (the lubrication order alone took around six hours).

[citation needed] While technically listed as amphibious, the Gama Goat's swimming capability was limited to smooth water crossings of ponds, canals and streams due to the very low freeboard and the lack of a propeller.