WASHINGTON — The US Army surprised no one by awarding BAE Systems a contract on Dec. 23 potentially worth $1.2 billion to begin building the Armored Multi-Purpose Vehicle (AMPV).

BAE was the only contractor still in the running for the program after one-time competitor General Dynamics lLand Systems pulled out of the competition in May, complaining that the requirements the Army had drawn drew up unfairly favored the tracked Bradley Fighting Vehicle derivative that BAE Systems was submitting.

The initial $382 million award calls for BAE to deliver 29 vehicles in five variants in a 52-month engineering, manufacturing, and development phase that will lead to a contract to replace all of the obsolete 2,897 M113 vehicles in the Army's Armored Brigade Combat Teams (ABCT).

"Today's announcement sets in motion a long-awaited and important modernization effort for the Army" said Brig. Gen. David Bassett, the Army's program executive officer for Ground Combat Systems.

"The AMPV family of vehicles will fill critical force protection, survivability and mobility capability gaps inherent in today's Armored Brigade Combat Teams," Bassett said.

The award also provides an optional low-rate initial production phase. If awarded, the company would produce an additional 289 vehicles for a total contract value of $1.2 billion.

Eventually, the AMPV "will support the M1 Abrams and the M2/M3 Bradley to resupply the formation, conduct battle command functions, deliver organic indirect fires, provide logistics support and medical treatment, perform medical and casualty evacuation, and, most importantly, function as an integral part of the ABCT formation," said Col. Michael Milner, the Army's AMPV project manager.

A big issue with the aging M113 — which was terminated in 2007 — is that it was unable to fully keep pace with the service's armor formations. In a statement, the service contended that the new AMPV "will be able to move as rapidly as the supported primary combat vehicles during unified land operations over multiple terrain sets. The combined protection and automotive performance capabilities of the AMPV will enable units to operate more securely and efficiently in the same operational environment as the combat elements."

But the drama earlier this year between BAE, General Dynamics, the Army, and Capitol Hill is hardly over.

This contract only covers units at the brigade level and below level within the ABCT. There are still another 1,922 M113s in use supporting Echelons Above Brigade (EAB) that the service eventually wants to replace.

And that's where GD has been focusing its lobbying efforts on Capitol Hill, hoping to place a version of its eight-wheeled Stryker vehicle in the role.

"The EAB level replacements may have different requirements than the current procurement, and have not yet been developed. The Army is currently assessing how it will address these emerging requirements," said Milner.

But these plans can all change once the Army finally has to reckon with the fiscal year 2016 budget, in which the sequestration cuts are scheduled to come back in full force.

Email: pmcleary@defensenews.com