National Defense:

Department of Defense's Waiver of Competitive Prototyping Requirement for the Army's Armored Multi-Purpose Vehicle Program

GAO-14-521R: Published: Apr 25, 2014. Publicly Released: Apr 25, 2014.

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Michael J. Sullivan
202-512-4841
sullivanm@gao.gov

 

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What GAO Found

The Department of Defense's (DOD) rationale for waiving the competitive prototyping requirement in the Weapon Systems Acquisition Reform Act of 2009, as amended (WSARA), for the Army's Armored Multi-Purpose Vehicle (AMPV) program addresses one of the two bases provided in the statute; namely that the cost of producing competitive prototypes exceeds the expected life-cycle benefits (in constant dollars) of producing the prototypes. The AMPV is a family of vehicles and will consist of five variants to replace the M113 armored personnel carrier in the following mission roles: general purpose, medical evacuation, medical treatment, mortar carrier, and mission command. According to the waiver, AMPV requirements can be met by modifying an existing military vehicle with mature government-defined mission systems, which obviates the need for prototyping the vehicle. In addition, the program plans to use mission equipment packages for each variant that are already fielded and will not change during system development. The Army expects the risks of integrating the mission equipment and vehicle to be low to moderate.

In the waiver, DOD also 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.

Why GAO Did This Study

WSARA required the Secretary of Defense to modify guidance to ensure that the acquisition strategy for each major defense acquisition program provides for competitive prototypes before Milestone B approval--which authorizes entry into system development--unless the Milestone Decision Authority waives the requirement. Competitive prototyping, which involves commercial, government, or academic sources producing early prototypes of weapon systems or critical subsystems, can help DOD programs reduce technical risk, refine requirements, validate designs and cost estimates, and evaluate manufacturing processes prior to making major commitments of resources. It can also help reduce the time it takes to field a system, and as a result, reduce its acquisition cost. WSARA also provides that whenever a Milestone Decision Authority authorizes a waiver of the competitive prototyping requirement on the basis of what WSARA describes as "excessive cost," the Milestone Decision Authority is required to submit notification of the waiver, together with the rationale, to the Comptroller General of the United States. WSARA further provides that no later than 60 days after receipt of a notification of a waiver, GAO is to review the rationale for the waiver and submit a written assessment of that rationale to the congressional defense committees.

On November 12, 2013, GAO received notice from DOD that it had waived the competitive prototyping requirement for the AMPV program. In this report, GAO assesses DOD's rationale for waiving the competitive prototyping requirement for the AMPV program and the analysis used to support it.

For more information, contact Michael J. Sullivan at 202-512-4841 or sullivanm@gao.gov.

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