AMPV Program - EMD / SD
AMPV's acquisition strategy called for selection of a single contractor for system development, and provided for three low-rate initial production options within the system development contract. The program awarded a cost-plus-incentive-fee contract for system development with a fixed-price incentive option for low-rate initial production to BAE Systems in December 2014. The AMPV contract will include engineering and manufacturing development and low-rate initial production incentives for cost and reliability.
During the EMD phase, each of the 5 AMPV vehicle variants were to be configured with existing Mandatory Integration Items (MII) and the vehicles would be developed, designed, modeled, simulated, fabricated, tested, and delivered to maximize performance, within the stated affordability constraints. The purpose of the AMPV EMD Phase was to: complete full system integration, develop an affordable and executable manufacturing process, ensure operational supportability with particular attention to minimizing the logistics footprint, implement human systems integration (HSI), ensure vehicles were designed for producibility, ensure affordability, protect critical program information, and demonstrate system integration, interoperability, safety, and utility.
The EMD contract would provide for fabrication, assembly, integration, testing and test support, and related requirements. The selected contractor would deliver 29 prototype vehicles, including all non-vehicle hardware, such as Basic Issue Items (BII), a System Support Package (SSP), Special Tools and Test Equipment, Cold Start Kits, Armor Coupon Sets, Ballistic Hull Structures, and data deliverables.
DOD concluded that the Army's cost-benefit analysis, which examined acquisition strategies with system level prototypes of all five AMPV variants from one or two contractors, was reasonable. The Army's analysis stated that these strategies would increase program costs by $198 million and $341 million (in base year 2013 dollars) and add 19 months and 31 months to the program's schedule, respectively. These costs include not only the cost of developing and producing prototypes, but also government program management and testing costs. The AMPV program office also estimated $0 in life cycle benefits from both prototyping strategies. Unlike the Air Force's Combat Rescue Helicopter prototyping waiver, the Army did not include any potential benefits associated with reducing development risks. While the Army could have more fully evaluated these potential benefits, its decision not to pursue prototyping for the AMPV program appears sound. Recognizing that the intent of competitive prototyping is to reduce cost and risk, the Army has taken other actions that could achieve these goals, including reducing requirements to ensure no technology development was needed and basing its acquisition strategy on modifying an existing combat vehicle and using existing mission equipment. The AMPV program entered System Development in December 2014 with its critical technologies fully mature based on the results of a technology readiness assessment conducted in October 2014. The program received a waiver for conducting competitive prototyping, and obtained a waiver to hold a preliminary design review after the start of system development. While the AMPV program did not intend to develop new technologies and planned to use readily available components from legacy systems, choosing to forego prototyping and deferring systems engineering reviews could limit the knowledge gained prior to development start.
The draft RFP indicated that a contract award for the EMD phase was anticipated for third quarter of 2014. Included in the award of the EMD contract would also be a 3 option years of LRIP. These options would be separated into 15 different Contractor Line Item Numbers, broken out by variant, for each option year, and placed on contract with not-to-exceed ceiling pricing. In addition, the Government may offer to enter into an exchange agreement with the contractor, to exchange Bradley, M113, M1068, M1064, and M577 vehicles for AMPVs, with these vehicles being referred to as Optional Exchange Vehicles (OEVs).
The maximum number of vehicles available for exchange for the EMD portion of the contract was 62. The maximum number of vehicles available for exchange for the first option year of LRIP performance was 114, for the second option year was 214, and for the third option year was 260. The vehicles available would be identified by serial number, and the contractor would have the opportunity to survey the vehicles offered for exchange prior to submitting a proposal. All vehicles were to be offered in as is condition. In exchange for vehicles, offerors would propose an exchange credit, which will be applied to the contract.
The production phase strategy was to be a sole source award to the winner of the EMD competition. A sole source award would be pursued through a sole source justification under Federal Acquisition Regulations 6.302-1, presuming the Government can determine, through Market Research and other analyses, that additional sources could not meet the Governments needs. At the time of the issue of the draft RPF, the Army expected to procure a total of 2,907 AMPVs in the 5 required variants: 993 Mission Command Vehicles, 217 Medical Treatment Vehicles, 790 Medical Evacuation Vehicles, 522 General Purpose Vehicles, and 386 Mortar Carrier Vehicles.
The AMPV program had a successful MS B DAB on December 9, 2014. The DAE signed the MS B Acquisition Decision Memorandum permitting the program to enter the EMD phase on December 23, 2014. On 23 December 2014 BAE Systems was awarded a contract worth up to $1.2 billion from the U.S. Army for the Engineering, Manufacturing, and Development (EMD) and Low-Rate Initial Production (LRIP) of the Armored Multi-Purpose Vehicle (AMPV). The initial award is for a 52-month base term, valued at approximately $383 million, during which BAE Systems will produce 29 vehicles across each of the variants. The award also provides an option to begin the LRIP phase immediately following the current EMD phase, at which time the company would produce an additional 289 vehicles for a total contract value of $1.2 billion.
The AMPV program entered system development in December 2014 with its critical technologies fully mature. An independent review team conducted an assessment of the program's ten critical technology areas — including automotive systems, power train cooling, troop protection, and others — and determined that candidate technologies for these areas exist and are fully mature. According to program officials, based on industry responses to requests for information and proposal data reviewed by an independent team, no further technology development or design innovations are needed to meet AMPV requirements, and integration risks are low to moderate.
The AMPV program was granted waivers from the requirements to conduct competitive prototyping and a preliminary design review prior to system development. The AMPV acquisition strategy calls for derivatives of existing military vehicles that leverage existing mission equipment packages or non-developmental items for each of the mission roles. The Army has taken other actions to reduce risk as well, including reducing requirements to ensure no technology development is needed.
According to program officials, market research identified examples of mature vehicles and subsystems and the program received multiple offers with demonstrated technology and engineering solutions. Therefore, the program believed there were negligible benefits to be achieved by conducting competitive prototyping and a preliminary design review before entering system development.
While this acquisition strategy will reduce development risk, choosing to forego prototyping and defer systems engineering reviews could limit the amount of knowledge gained on the program and leaves it vulnerable to cost and schedule increases if issues are identified after the start of system development.
The AMPV program's preliminary design review was planned to occur by June 2015 and the critical design review was expected to occur by June 2016.
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