General Dynamics to Lose $15.5 Billion Marine Truck Program in Gates Cuts

Defense Secretary Robert Gates has canceled General Dynamics Corp.’s $15.5 billion Expeditionary Fighting Vehicle program as part of his drive to shift as much as $100 billion through 2016 to more urgent needs, according to officials.

“We think that Gates tomorrow is going to announce that this will not be in his budget request, that it’s canceled,” Rep. Duncan Hunter, a California Republican and former Marine on the House Armed Services Committee, said in a telephone interview.

He predicted the House committee will reject Gates’ decision because it appears to be a repudiation of the Marine Corps’ central mission. The EFV is designed for amphibious landings on hostile shores.

The termination decision was confirmed by administration and Congressional officials, who asked not to be identified since the action has not been formally announced.

Gates is expected to make the announcement to lawmakers tomorrow as one part of the $100 billion in efficiency savings and weapons program cuts that he plans in order to shift resources to other priorities.

The EFV project is at least five years behind schedule and, at $24 million apiece, 176 percent over its original per-vehicle price tag, the U.S. Government Accountability Office reported in July 2010. It faces additional “cost, schedule and performance risks,” said the report.

Failed Earlier Tests

The transport program has been in development since 1996 and was reorganized in 2007, cutting the number to be purchased and extending the development period, after the vehicle failed earlier reliability tests.

Congress, through this fiscal year, has approved $3 billion of the program’s $15.5 billion cost. Even with fewer transports to be purchased, the overall price tag has grown more than 70 percent over an original $9 billion estimate, according to GAO and Pentagon figures.

The transports are designed to deploy from ships up to almost 30 miles (46 kilometers) out and carry 17 Marines, moving them to shore three times faster than the Corps’ current, 35- year-old transports.

Editors: Steven Komarow, Terry Atlas

To contact the reporter on this story: Tony Capaccio at at acapaccio@bloomnberg.net.

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

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