Affordability a priority for huge new Army combat vehicle project

The Army will select contractors for the new ground combat vehicle based on affordability, the use of already developed technology and the ability to deliver on an aggressive timetable, officials said.

Army officials met with about 300 industry representatives near Dearborn, Mich., on Friday to detail the new vision for the multibillion-dollar ground combat vehicle program, the service’s largest new contract for years to come.

The Army announced in August it was restarting the bidding process from scratch, although it had already begun the selection process.

A new request for proposals is still “generally on track” to be issued by the end of October, said Col. Andrew DiMarco, the project manager.

Some of the key changes from the recently canceled competition will be the focus on cost, the contractor’s use of technologies already in development and the ability to deliver the vehicles within seven years.

“Affordability is much more upfront now,” said DiMarco, reflecting a broader effort by the Pentagon to cut bloat from its budget. Army and Pentagon leaders want to see a vehicle they “can afford” both in production and over the life of the vehicles. The Army is planning to buy 1,450 of the combat vehicles, which will eventually replace the Bradley infantry-fighting vehicle made by BAE Systems.

The Army will provide the industry with a cost range in the request for proposals and then assess the industry’s ability to comply. The Army will balance the bidders’ proposed technology against a range of what it would expect, or like, to pay for the combat vehicle seven to 10 years from now, DiMarco explained.

The Army will provide industry with “affordability targets” for vehicle manufacturing costs and a range for the operations and support costs, he said.

However, DiMarco did not provide an actual price range and said that the service was still refining those as well as the proper contract types for each phase of the program.

The program has been estimated to cost about $40 billion. The new ground combat vehicle became a crucial project last year after Defense Secretary Robert Gates scrapped the Army’s plans for combat vehicles under the defunct $160 billion Future Combat Systems (FCS) program — previously the Army’s most sweeping modernization effort.

Gates scrapped the manned ground vehicle portion of FCS because the vehicles, as designed, would not have adequately protected soldiers from roadside bombs.

Gen. George Casey, the Army’s chief of staff, has pledged to make the new ground combat vehicle program a model of “acquisition reform.”

But the program is already attracting significant congressional scrutiny. Congressional sources and defense insiders predict the Army will have to make some sacrifices in order to pay for the hefty program and still have money left for upgrading and maintaining other combat vehicle fleets.

The Army is expected to award as many as three contracts for the technology demonstration phase of the program. Because the Army scrapped the initial competition, that decision won’t come until spring 2011. The Army said in August that the selection decision will slip by about six months.

The service plans to select two contracting teams for the engineering and development phase. A final winner will be selected to start producing the new model. The Army plans to equip the first battalion with the ground combat vehicle in 2018.

With the new request for proposal due out in a few weeks, Army officials indicated the service’s effort to meet recent markers unveiled by the Pentagon to cut the costs of contracts and boost productivity in the defense sector.

As part of the new guidelines, the Pentagon acquisition corps would have to determine from the very beginning whether a new weapon or service is affordable; set shorter timelines for buying new weapons; constrain technical designs to schedule and cost so that the price tag of new weapons system does not spiral out of control; and ensure that cost overruns are shared by defense contractors and the Defense Department.