The Army also plans to award an engineering and manufacturing development (EMD) contract to a single vendor — as opposed to the previously planned two vendors — in late fiscal 2014, the letter said.
A Jan. 17 memo (PDF) from the Pentagon’s head of acquisition, logistics and technology to the Army secretary states that the changes are being made “in anticipation of the fiscal pressures over the FY14-18 timeframe,” and “the need for additional development time led to this restructured program.”
By moving the program’s schedule back by six months, a final production decision is now expected some time in fiscal 2019 as opposed to the expected first quarter of fiscal 2018.
The TD phase of the program kicked off in August 2011 with the awarding of contracts to BAE Systems for $449 million and General Dynamics Land Systems for $439 million for continued work on the program.
The official start date for the planned 24-month phase actually was pushed back until December 2011 thanks to a protest filed by a Boeing-SAIC team, which was shut out of the competition. The Ground Combat Vehicle program received the full $639 million the Army requested in the 2013 defense budget.
While no numbers are yet available, the changes in the schedule and make-up of the program will most certainly affect its overall price tag.
The memo notes that the Army will be expected to provide an “updated acquisition strategy, acquisition program baseline, and revised cost estimate” to support the planned EMD decision. The Army will also be required to obtain Defense Acquisition Board approval before releasing the EMD request for proposal, which is slated to hit the street during the first quarter of fiscal 2014.
BAE Systems did not respond to requests for comment. An Army spokesman said that the service would issue a press release later Jan. 17.
Peter Keating, spokesman for General Dynamics Land Systems, said the company has long expected some structural changes in the program, and that the six-month extension of the TD phase “is good news, because it allows General Dynamics to align our design to the new requirements that the Army is giving us.” Any new requirements or changes to the program have not yet been specified by the Army.
In an emailed statement, BAE’s Stephanie Bissell Serkhoshian said that “we believe that the lowest risk option is a down-select decision based on delivery and evaluation of hardware,” and that “we look forward to better understanding the changed acquisition strategy and the path forward to providing our soldiers with the best GCV solution possible.”
Plans for the GCV call for 1,894 vehicles, but budget issues and the Army’s shift from large-scale combat operations have called that requirement into question.
The overall cost per vehicle has also been a matter of debate, with the service claiming that the average unit production cost for the GCV will fall in the $9 million to $10.5 million range. The Pentagon’s Office of Cost Assessment and Program Evaluation disputes those figures, estimating that the average production cost will instead likely be $16 million to $17 million range.
Army spokesperson Ashley Givens emailed that since the program was last restructured in 2010, the service “has undertaken diligent efforts to examine vehicle requirements, technical capabilities and existing technologies” in order to remain on budget and on schedule. She stressed that the Army remains committed to the program, and that the new direction “allows the Army to take positive steps to ensure we affordably deliver this needed capability.”