February 17, 2010 / 11:02 PM / 10 years ago

US Army, Pentagon at odds over new vehicle program

* Weight of vehicles three times greater than planned

* Pentagon officials insist on need for competition

By Andrea Shalal-Esa

WASHINGTON, Feb 17 (Reuters) - Pentagon officials have raised questions about the U.S. Army’s plan for a new ground combat vehicle, delaying release of final terms for a competition that could be worth tens of billions of dollars, several sources briefed on the issue said on Wednesday.

During a high-level meeting last Friday, officials expressed concern about the weight of the proposed vehicle, which had grown to around 70 tons, more than three times the level initially planned.

Officials also underscored the Pentagon’s desire to ensure a real competition for the new vehicle, which analysts said was likely to be dominated by General Dynamics Corp (GD.N) and BAE Systems (BAES.L).

One source, who was not authorized to speak publicly, said the Pentagon’s chief weapons buyer declined to sign a decision approving the Army’s development plan at the meeting, due to a “little disagreement” over the Army’s contracting strategy.

A second source said the impasse could spell a serious setback for the program, which is to replace the ground vehicle part of the Army’s Future Combat Systems modernization program, which Defense Secretary Robert Gates canceled last year.

Boeing Co (BA.N) and Science Applications International Corp SAI.N were the prime contractors for the overall FCS program, while General Dynamics and BAE were teamed to develop the program’s ground vehicles.

“It’s serious. They have to decide what they want the vehicle to do,” said the second source, who was also unable to speak on the record.

The U.S. Army’s proposed budget for fiscal 2011 includes $934 million in research funding for development of the new Ground Combat Vehicle (GCV).

The Army had intended to release a final request for proposals for the program in late February, with an eye to awarding up to three contracts in the fourth quarter of fiscal 2010, and a possible winner-take-all decision in fiscal 2013.

Army spokesman Paul Mehney confirmed Friday’s meeting with senior defense officials, but referred all questions about its outcome to the Pentagon.

No comment was immediately available from a Pentagon representative about the meeting or the Army program.

Defense consultant Jim McAleese said the program had run into several problems, including rising costs triggered by the extra weight of armor added to better protect troops against roadside bombs.

At the same time, the Pentagon was trying to tamp down the program’s cost, given the assumption that heavy combat brigades would play a less important role in future conflicts, he said.

Pentagon officials were also adamant about the need for a competition between General Dynamics, BAE and possibly other companies, but that could delay the possible fielding of a new vehicles by two to three years, McAleese said.

Other companies were unlikely to enter the fray, given the head start the General Dynamics and BAE already had through their work on the FCS ground vehicles, unless the government decided to fund development of prototype vehicles, he added.

The FCS program foresaw $6 billion of funding to begin procurement of 300 vehicles in 2013. The Army’s most recent plan eyed the start of low-rate production in fiscal 2016.

Defense analyst Loren Thompson said it was clear that the program was facing “considerable delays,” and said it could run into further problems if Gates, who had promised to safeguard funding for the program, left his job before the FCS replacement program was put in place. (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)

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