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Army’s Desire to Control Costs Reduces Competition with GCV

The U.S. Army‘s attempt to start the program to replace the M2 Bradley Infantry Fighting Vehicle (IFV) suffered a blow today when one of the four bidders on the original development effort withdrew from the new contest. The Army had canceled the original RFP and substituted a new one when the bids submitted exceeded cost and schedule goals. The Army also decided to re-think some of the requirements due to the large size and weight of the proposed solutions driven by the armored protection goals.

Advanced Defense Vehicle Systems (ADVS) announced yesterday that they would not participate in this latest attempt as the company expressed concerns with the lengthy development process. ADVS believes it is better suited for a more rapid development and production contract.

The Army released their new RFP in early December. In a bid to minimize cost and schedule growth the new plan is to use Firm Fixed Price (FFP) contracts for all parts of the program including the development of the new vehicle. In the past the use of FFP for development of new systems has proven difficult as the contractor must assume a great deal of risk especially if their are changes to requirements that might drive up development and test costs.

The decision to focus on containment of potential cost and schedule issues has reduced competition for this program. There are still three bidders left from the first round who so far seem willing to participate. While the Pentagon has focused on restructuring acquisition rules to try to minimize problems they also still want to maximize competition. The idea being that multiple companies participating would put downward price pressure on the other contractors. With all things related to defense acquisition there is no easy solution or way to reach a balance.

The plan for the new GCV is similar to what the Defense Department used for the Mine Resistant Ambush Protected – All Terrain Vehicle (MRAP-ATV) program two years ago. The MRAP-ATV was designed to be a lighter, more mobile MRAP for use in Afghanistan which has poorer terrain and roads then Iraq. Multiple teams submitted prototypes which were then down selected through testing and ultimately Oshkosh’s (OSK) design was chosen. Oshkosh so far has built several hundred of the vehicles and received billions in contracts from the Pentagon for the system.

The GCV is a more complicated system then the MRAP-ATV and while there are potential existing solutions to the requirements there would be significant development to meet the Army’s needs. ADVS felt that they were better suited to rapidly develop and procure a solution based on currently available vehicles rather then the Government’s desire for iterations of development and test.

The GCV itself arose out of the end of the Future Combat Systems (FCS) canceling by Secretary of Defense Robert Gates. The FCS would be a new family of wheeled vehicles to replace the heavy M1 Abrams tank and M2 force from the Eighties. It had suffered cost and schedule problems while not being optimized for the combat situation in Iraq and Afghanistan. Because there was still a need for a new vehicle the GCV was started.

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