November 30, 2010 / 6:37 PM / 9 years ago

Army revamps rules for vehicle competition

WASHINGTON (Reuters) - The U.S. Army on Tuesday released new rules for companies competing to build a next-generation ground combat vehicle and said it hoped to award up to three contracts valued at up to $450 million next April.

Army officials said they had substantially revamped the requirements for the new vehicle to increase the focus on affordability and flexibility, after abruptly canceling the previous competition in late August.

Colonel Anthony DiMarco, the Army’s program manager for the vehicle, said he could not guarantee there would be no further changes to the rules, but said he was confident the plan had the approval of top Army and Pentagon acquisition officials.

Companies bidding for the work must submit proposals by January 21.

The prime contractors expected to bid are Science Applications International Corp SAICI.UL, Britain’s BAE Systems Plc (BAES.L) and General Dynamics Corp (GD.N). Subcontractors of those companies include many of the largest U.S. defense contractors, such as Lockheed Martin Corp (LMT.N), Boeing Co (BA.N) and Raytheon Co (RTN.N).

DiMarco said the Army expects to award up to three technology-development contracts, under a fixed-price model with incentives, in April. Companies would get 20 percent of any money saved if they beat their budget.

Current plans call for eventual construction of 1,874 of the new vehicles, beginning in seven years, with the Army planning to whittle the field down to one winning design in about six years, DiMarco told reporters on a teleconference.

The new vehicle will be the centerpiece of the Army’s combat vehicle modernization strategy. The revised request for proposals sets a clear affordability cost target of $9 million to $10.5 million to produce each vehicle.

The Army also set a goal for the life-cycle cost of the vehicle of $200 per operating hour, which compares to more than $100 per hour for each Bradley fighting vehicle now used, and about $300 per hour for each Abrams tank.

The revamped rules lay out the Army’s top priorities in terms of capabilities, including the ability to carry nine soldiers safely to the battlefield and the ability to defend against threats from the top, side and bottom.

But they also give contractors more leeway to make tradeoffs among other capabilities as they design an affordable new weapon, DiMarco said.

The idea is to use as much mature technology as possible, and to ensure competition and construction of full vehicle prototypes all the way through the engineering and design phase, he said.

Reporting by Andrea Shalal-Esa; editing by John Wallace

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