UPDATE — This story has been corrected to reflect that Congress is funding the program at $205.6 million, a reduction of $172.8 million from the Army’s budget request.
WASHINGTON — Congress has cut the Army’s ability to pay for two sets of competitive prototypes for its Optionally Manned Fighting Vehicle program intended to replace the Bradley Infantry Fighting Vehicle, according to the fiscal 2020 spending bill’s conference report released Dec. 16.
Congress will only fund the OMFV program at $205.6 million in FY20, which is a reduction of $172.8 million from the Army’s budget request, rendering it more difficult, if not impossible, to afford a competitive prototyping effort.
Congressional appropriators also essentially halted the OMFV program until the service shows its work in terms of how it developed requirements and executed its bidding process for the competition, according to the report.
Funds will be withheld until the Army produces its report that includes “the results of the source selection process; an explanation of how program requirements were built, their traceability to the national defense strategy and multidomain operations, and the capability gaps they address,” as well as, “an updated acquisition strategy and program schedule,” an explanation of the cut in the report states.
The back story
The Army ended up with only one bidder in the OMFV competition — General Dynamics Land Systems — in October.
Defense News broke the news that another expected competitor — a Raytheon and Rheinmetall team — had been disqualified from the competition because it had failed to deliver a bid sample to Aberdeen Proving Ground, Maryland, by the deadline.
BAE Systems, which manufactures the Bradley, decided earlier this year not compete, Defense News first reported. And, according to several sources, Hanwha also considered competing but decided against the opportunity as well.
“You always want more competition, but this is entirely about how we can meet these requirements so we can have capability that has much greater lethality than we have today and capability than we have today,” Army Secretary Ryan McCarthy told reporters at the Reagan Defense Forum in California earlier this month.
“So requirements are incredibly important. We’ve made dramatic steps as an organization to put the strong leadership in the requirements community and to partner with our acquisition leadership and getting requirements right on the front end prevents you from the catastrophic failures we’ve endured for the last twenty years,” McCarthy added.
With Raytheon and Rheinmetall out because they couldn’t deliver a bid sample on time and the Army’s refusal to grant a 90-day extension, the service has found itself in a tough spot as its competition is essentially no longer a competition.
The inflexibility to accommodate Raytheon and Rheinmetall’s request for an extension to bring its bid sample to the United States from a facility in Germany, according to industry sources, highlights the flaws in the relationship between the Army acquisition community and the new Army Futures Command.
According to several sources, the acquisition side of the house wanted to grant an extension just to keep the program competitive, but the command was dead set on keeping to its schedule.
Because the Army said it was is in a sensitive source-selection evaluation process, it would not legally discuss the details of the competition or its plans going forward in the early days following the bid deadline.
“Over the coming months the source selection evaluation board will conduct its review in accordance with the evaluation criteria stated in the RFP,” an Army statement issued to Defense News on Oct. 7 stated. “The Army intends to award up to two contracts for the [optionally manned fighting vehicle] OMFV [middle-tier acquisition (rapid prototyping)] effort phase in the spring of 2020.”
It’s possible the Army could reverse course before reaching the point where it would award a contract to build prototypes. Alternatively, it might proceed as planned and award GDLS a contract to proceed with building 14 prototypes.
But there could still be an opportunity for companies to join the competition, albeit without the major advantage of funding from the Army to build a series of prototypes. According to the Army statement, after the rapid prototyping phase is completed, the Army plans to release a second “full and open competitive solicitation for Low-Rate Initial Production.”
The Army plans to transition OMFV to a major program of record when it awards a production contract in FY23, which sticks to the schedule on which the service has been unbending.
Essentially, Congress wants a way to get to the bottom of what happened with the Army’s OMFV competition effort and find out what the service is planning to do going forward.
Congressional authorizers are requesting in the recently released FY20 defense policy bill that the Army’s acquisition chief and the Army Futures Command commander in charge of modernization produce quarterly reports — beginning now until Oct. 1, 2022 — that provide an overview of funding for the program including what has been spent and will be spent, a program schedule, the status of technical requirements’ development and approval, technological maturity, testing and delivery, as well as any other matters relevant to the program.
Industry waiting in the wings
According to BAE Systems US-based CEO Jerry DeMuro, industry is watching the future of the program closely as well.
DeMuro told Defense News in an interview at the Reagan forum that the company doesn’t regret its decision not to pursue OMFV as the requirements and schedule were previously laid out, but said it continues to talk to the Army about future opportunities.
“It was a very challenging program,” DeMuro said. “It always comes down to three things: requirements, schedule and funding. The schedule was very, very aggressive especially early on and, at the same time, trying to get leap-ahead technologies. There’s a little bit of dichotomy there.”
Additionally, he said, “the requirements that were being asked for was going to require, in our estimation, significantly more development that could not be done in that time frame and significantly more capital than the Army was willing to apply.”
BAE will continue to watch the program closely, he said.
“We are still in dialogue with the Army and [the Defense Department] and we will see what they decide to do, whether they come back out and try to maybe relax the schedule so that they can get maybe a little bit more technology that they are looking for for next gen.”
DeMuro added that the Army wanted to look at alternatives and what is out there when it comes to a future fighting vehicle, not just have a competition and it wasn’t getting that “just based on the way the acquisition is structured today, so I think when we talk to DoD and, to the Army, all options are on the table and they are trying to sort through that, what can they open to perhaps get more opportunity for industry to participate.”