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U.S. Army Begins a $1.35 Billion Contest for Vehicles

Nov. 30 (Bloomberg) -- The U.S. Army issued a revised request for proposals for a new class of ground-combat vehicles valued as much as $1.35 billion for the prototype phase.

Three winners will be picked for the development phase in the third quarter of 2011, and one will then be selected for a production contract seven years later, Army Colonel Anthony DiMarco said on a conference call today. Each contract will be worth as much as $450 million over 24 months, DiMarco said.

The Army plans to buy as many as 1,874 of the vehicles to replace the fleet of Bradley infantry fighting vehicles, DiMarco said. The ground-combat vehicle is a successor to the manned-vehicle portion of the $159 billion Future Combat Systems program canceled last year by Defense Secretary Robert Gates.

The new vehicles must be capable of carrying nine soldiers and their equipment to battlefields, DiMarco said. He declined to specify a production value for the winner manufacturing the vehicles.

Today’s bid request revises a previous one that was withdrawn in August because the Army wanted bidders to scale down risks involved in untested technologies.

That request drew interest from Chicago-based Boeing Co. and its partners Science Applications International Corp., and Germany’s Krauss-Maffei Wegmann Gmbh & Co. and Rheinmetall AG; BAE Systems Plc, London, and its partner Northrop Grumman Corp.; and a team including General Dynamics Corp., of Falls Church, Virginia; Bethesda, Maryland-based Lockheed Martin Corp.; Waltham, Massachusetts-based Raytheon Co. and MTU Detroit Diesel.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editors responsible for this story: Mark Silva at msilva34@bloomberg.net Ed Dufner at edufner@bloomberg.net

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