The Pentagon on Thursday restructured the U.S. Army's Ground Combat
Vehicle program, saying budget pressures and technical issues had
prompted it to delay the multibillion-dollar program by six months and
scrap plans to develop prototype vehicles. The new approach requires the Army to pick just one winning bidder to
develop and build the new infantry fighting vehicle after a full and
open competition, according to a memo signed by the Pentagon's chief
weapons buyer, Frank Kendall. A copy of the memo was obtained by
Reuters.
Teams led by BAE Systems Plc and General Dynamics Corp each won
contracts in 2011 to develop ground combat vehicles designed from
scratch for battlefields characterized by roadside bombs. Those
contracts will now be extended by six months, under the memo dated
Thursday.
Kendall told the Army to submit an updated acquisition strategy and
revised cost estimates for his approval before it can launch the
competition with a request for proposals in the first quarter of fiscal
year 2014, which begins October 1. A contract award would come in late
fiscal 2014, the memo said.
Industry executives said the Pentagon's new approach would save money by
eliminating the expected work on prototypes by two or more companies
and moving directly into a more traditional engineering and design phase
by one contractor.
The delay in the program means the Army would move into full production
of the new vehicles in fiscal 2019, instead of early fiscal 2018 as
expected.
The long-term fate of the program remains in question given uncertainty
about future Pentagon budget levels and whether Congress will avert $500
billion in military spending reductions that are due to kick in on
March 1 and be phased in over a decade. Those cuts would come on top of
$487 billion in cuts already slated to take effect over the next decade.
It also remains unclear if the Army will be allowed to buy all 1,894
vehicles currently planned for the program, especially given changes in
the military's overall strategy and plans to reduce the size of the
Army.
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