General Dynamics says price for Marine vehicle could dip under $10 million

General Dynamics on Tuesday proposed Expeditionary Fighting Vehicle (EFV) design changes and other price-slashing moves, just hours before Pentagon officials testify on plans to terminate the program.

Seeking to salvage a portion of the program — which the Pentagon says is too pricey — General Dynamics said it could reduce the per-vehicle price to under $10 million. Current projections, with a suite of subsystems the Defense Department has dubbed too “exquisite” and too expensive, approach $18 million per vehicle.

Michael Bolon, the company’s senior vice president for Navy and Marine Corps programs, told reporters the company could reconfigure the expeditionary vehicle for “a lower water speed, lesser weapons … and a simplified hydraulic system.” He also suggested General Dynamics could alter the armor on the vehicle to pare costs. 

Additionally, the company has found “business efficiencies” within its management of the program — things like altering how it buys parts and managing overhead —that Bolon said would “save millions of dollars.”

The General Dynamics executive said the company submitted that list of business savings to Marine Corps officials this summer, but received only “a wave of the hand.”

Bolon acknowledged that altering the vehicle’s design with different, even if less-capable, subsystems would require additional testing not in current plans or budgets.

The weapons manufacturer is proposing the military buy about 200 EFVs, down from more than 500 in original plans. Under that scenario, General Dynamics says the Marines could upgrade over 300 existing amphibious crafts.

Per-platform costs for major defense projects typically grow when the military buys fewer models, bringing into question whether the company really could shrink the per-vehicle cost by $8 million while producing 300 fewer models. 

When Pentagon officials on Jan. 6 first proposed ending the expeditionary vehicle program, they said it was mostly because of the program’s ever-growing price tag. Marine Corps allies on the Hill, led by House Armed Services Committee Republicans, are vowing to block the plan.

Armed Services Committee member Rep. Duncan Hunter (R-Calif.), for instance, announced Tuesday he is preparing an alternative list of ways the Pentagon could trim its budget and keep the EFV program.

“These alternative efficiencies will not only highlight examples of waste and unnecessary spending in the annual defense budget, but also deliver substantial cost-savings to prevent any further decline in modernization and production,” Hunter said in a statement  “Terminating the EFV, for instance, would do far more harm than good. ... It’s important that alternatives are on the table.”

Joe Kasper, a Hunter spokesman, said it is unclear how his boss will use that list once it is completed.

"The first thing is to finalize the list," Kasper said. "There will definitely be an opportunity to work alternatives into the defense bill, but exactly how is something the congressman is still considering." 

General Dynamics’ new cost-reduction proposals likely will come up when Deputy Defense Secretary William Lynn, Assistant Marine Corps Commandant Gen. Joseph Dunford, and other senior military leaders appear before that panel Wednesday. The DoD officials will testify about a list of Pentagon cost-cutting plans, including the proposed expeditionary craft termination.

The most recent internal DoD cost projections envisioned a $14 billion EFV fleet. The Marines are working on a replacement program, with a cheaper amphibious vehicle that likely will be launched from closer to the shore than the 25 miles envisioned for the expeditionary craft.