As GD and BAE square off for the AMPV, the US Army shouldn’t pick a winner before the envelopes are opened.

With the cancellation of the Ground Combat Vehicle, the Armored Multi-Purpose Vehicle (AMPV) program is now the US Army’s top platform modernization priority. But money is still tight. In 2012 and 2013, I endorsed the idea that the AMPV could be bought off the shelf, or literally out of inventory, and the Army does seem to be thinking that way. But one contractor’s recent lobbying reveals the difficult dynamics of this program, and a broader point about the challenge of maintaining competition in contracting.

The AMPV program aims to replace the US Army’s venerable, tracked M113s with a more survivable armored utility vehicle. As in the 1999 Interim Armored Vehicle (IAV) competition, bidding a tracked or wheeled vehicle is a choice left to the contractor, as long as he can meet the mobility requirements. And as in the IAV competition, the Army has strongly signaled a preference. Back in 1999, General Dynamics Land Systems (GDLS) and partner General Motors Defense Canada beat then-United Defense by offering the wheeled vehicle that the Army clearly wanted—the LAV-III, or what came to be called the Stryker. This time, the Army is nodding towards tracks: the RFP indicates that surplus M113 and Bradley fighting vehicles, of which the Army has thousands, will be available to the winner for remanufacturing. Frankly, the Army’s enthusiasm for a turret-less Bradley to supplant the M113 has been an open secret for years.

The Army owns the technical data package to the Bradley, and will make those blueprints available to any interested bidder. GDLS has since bought GM Defense, and United Defense is now part of BAE Systems Land & Armaments (L&A), but the factories involved are the same. Having owned the franchise on Bradley manufacturing and remanufacturing continuously since the early 1980s, BAE L&A has greater tacit knowledge about those processes than any other firm. 

Stranger things have happened. In August 2009, Oshkosh beat BAE Systems’ factory in Sealy, Texas in the re-competition of the Family of Medium Tactical Vehicles (FMTV) contract. (My October 2013 summary lists the several articles I have written about this program over the past few years.) BAE’s corporate predecessor at Sealy, Stewart & Stevenson, had owned that franchise since 1992. Oshkosh seriously underbid BAE for the build-to-print contract, as the Army owned the FMTV’s TDP.

GDLS is a smart group of engineers and assemblers, but the company may still be worried that the Bradley is not its vehicle. For the FMTV, Oshkosh brought a very competitive cost position vis-à-vis BAE; for the AMPV, GDLS may not be so advantaged. Without a markedly lower price offer, the Army might be unlikely to choose GD over BAE, if the issue is modifying Bradleys.

So, GDLS’s argument seems to hold this is effectively a sole-source process masquerading as a multi-source RFP. Inside Defense reported last week (28 February) that the company was lobbying US congressmen to shut down the Army’s Armored Multi-Purpose Vehicle (AMPV) Program, “asking that lawmakers refuse to fund the AMPV effort until the service puts forth an acquisition plan GDLS feels is more competitive”.

GDLS may just crave fairness in the awarding of contracts. That metric is hard to define, and in any case, it is properly subordinate to quality, cost, and time in procuring combat equipment. For these goals, competition is always preferred, at least in the abstract. But as I wrote last week, competition in military contracting is sometimes ineffective, and other times just impossible. In the case of the AMPV, some degree of competition would be helpful, but only if it were monopolistic competition—with contractors able to offer wholly dissimilar products of their own specialization, with considerably different total cost profiles.

If Bradleys replaced M113s in the Army’s heavy brigades, each formation would neck down from four complex armored vehicles (Abrams, Bradleys, Paladins, and M113s) to three. A case can be made that logistics would be simplified relative to replacing the M113s with another dissimilar platform. But the Bradley remains a heavy, tracked vehicle, so its operating costs are much higher than those of a truck or even wheeled fighting vehicle.

On the other hand, a wheeled alternative may make more sense, in at least some of the M113’s current roles, and GDLS has been expected to offer its Stryker. The Stryker’s operating costs are lower than the Bradley’s, and by picking the Stryker, the Army would still excise an entire vehicle fleet. The bigger problem is that new Strykers would cost a lot more than remanufactured Bradleys, but GDLS may have a better case than what I am presenting. Answering whether an old Bradley, a new Stryker, or something else is most cost-effective in some or all of the five roles is properly a job for the source selection authority.

In this specific situation, maintaining a degree of competitiveness in the process is not a matter of fairness to GDLS or any other contractor, but economy and performance for the Army. The Army is right in releasing an RFP, and the RFP has, at least formally, been engineered to bring in multiple competitors. But the Army must show GDLS how it has a real shot, and is not merely a stalking horse. If so, BAE will need to keep its pencil sharp, else lose the contest. The general point follows—competition can be hard to manage, but it mustn’t be forgotten. It is entirely reasonable for a military service to form in advance an idea of its preferred solution. But those grading the papers should also keep an open mind, so that the winner isn’t chosen before the envelopes are opened.

James Hasik is a senior fellow in the Brent Scowcroft Center on International Security.

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