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Army Told to Pick Combat-Vehicle Contractor Next Year

Jan. 17 (Bloomberg) -- The Army must choose a single contractor next year to complete development and build the service’s Ground Combat Vehicle, a potential $32 billion program, according to the Pentagon’s top weapons buyer.

BAE Systems Plc and General Dynamics Corp. have been competing to produce the tank-like replacement for the Bradley Fighting Vehicle. Previous plans called for both companies to continue development work beyond 2014, after which one would probably have been selected for the production phase.

“The combination of fiscal pressures and the need for additional development time led” to the change of plans, Defense Undersecretary for Acquisition Frank Kendall wrote in a directive issued today. The revision will save as much as $4 billion through 2018, according to a Jan. 9 memo Kendall sent to Deputy Defense Secretary Ashton Carter.

The Army plans to buy 1,904 of the combat vehicles, according to a Government Accountability Office report. The Pentagon estimates they will cost as much as $17 million apiece, according to the Congressional Research Service.

In his “acquisition decision memo” today, Kendall also directed a six-month extension to the current 24-month “technology demonstration” phase that began in late 2011.

The extension provides for testing of competing technologies through the use of prototypes. That’s a tenet of Kendall’s new “Better Buying Power 2.0” initiative.

‘Fiscal Pressures’

After that, Kendall said, the Army will select a contractor to conduct the next phase, called “engineering and manufacturing” development, and then produce the vehicle.

The Army had planned to keep both London-based BAE and Falls Church, Virginia-based General Dynamics through the engineering and manufacturing phase and select a contractor later for production.

Army spokesman Matthew Bourke said in an e-mail that the next phase “was built so that any industry team,” not only BAE and General Dynamics, “can submit a proposal, and we encourage them to so.”

Kendall directed that the process to choose among the competitors begin with release of a request for proposals between Oct. 1 and Dec. 31.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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