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U.S. Army AMPV Price Targets Are ‘Understood’

Part 2 of 2

Another interesting aspect of the recently-released final Request for Proposals (RFP) for the U.S. Army’s Armored Multi-Purpose Vehicle (AMPV) can be found in comparisons between the final RFP and earlier drafts that were released for industry comment.

Although the final RFP clearly specifies that “All previous versions of solicitation…and its associated attachments were released for industry planning purposes only and should not be referenced or used for proposal submission,” it often makes an interesting exercise to note significant changes that have occurred in the documentation between draft and final versions.

In the case of AMPV, one RFP area that has changed over the past year involves specifications on affordability. While the final RFP for the EMD phase notes that “proposals specifying funding in excess of [identified available funding levels] will be considered unaffordable and ineligible for award,” it does not include earlier draft guidance on Average Unit Manufacturing Cost (AUMC).

AMPV “is one that has a ‘price target,’ which we think is understood. Even though that target came out of the most recent [draft] RFP, the affordability is one of those key capabilities on the AMPV which is critically important. In this budget environment, the more expensive a platform is, the harder it is to squeeze it into the budget alongside all of the other priorities that I just described.”

The draft RFP of February 2013 had defined AUMC as the “average cost to the United States government to buy AMPV base vehicles (averaged across all variants). This is the price of the vehicle as delivered for government acceptance. The unit manufacturing cost should reflect a projected vehicle contract price for each AMPV variant to include all direct and indirect costs. The unit manufacturing costs should include all overhead applicable to vehicle contract prices, including general and administrative (G&A), cost of money, and profit. Non-recurring costs must be accounted for and may be amortized over the vehicle quantity buy. The recurring costs include the costs of material, labor, and other expenses incurred in the fabrication, checkout, and processing of parts, subassemblies, and major assemblies/subsystems needed for the final system. The manufacturing costs also include recurring costs of subcontractors and purchased parts/equipment. The manufacturing costs further include recurring costs of the efforts to integrate and assemble the various subassemblies into a working system, recurring costs to install special and general equipment, and recurring costs to paint and package the system for shipment to its acceptance destination. It also includes moves in order to assemble into a final system.”

Against that definition, the earlier draft had specified, “The contractor shall consider affordability within the AMPV FoVs and achieve an Average Unit Manufacturing Cost (AUMC) no greater than $1.8M (Base Year 12 dollars), while maximizing performance defined in the AMPV Performance Specification…The contractor shall track and control costs and shall perform cost-performance analyses…”

That draft had included an attachment with “ground rules and assumptions for vehicle production, schedules, and quantities.”

Turretless Bradley

An interior view of a turretless Bradley. BAE Systems has introduced a turretless Bradley as a competitor for the U.S. Army’s Armored Multi-Purpose Vehicle (AMPV) program. U.S. Army photo

However, the subsequent draft AMPV RFP, released in October 2013, did not include that AUMC element.

“In this budget environment, the more expensive a platform is, the harder it is to squeeze it into the budget alongside all of the other priorities that I just described.”

Asked about the draft change during the October 2013 Association of the U.S. Army Annual Meeting, U.S. Army Program Executive Officer for Ground Combat Systems Brig. Gen. David Bassett stated that AMPV “is one that has a ‘price target,’ which we think is understood. Even though that target came out of the most recent [draft] RFP, the affordability is one of those key capabilities on the AMPV which is critically important. In this budget environment, the more expensive a platform is, the harder it is to squeeze it into the budget alongside all of the other priorities that I just described.”

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Scott Gourley is a former U.S. Army officer and the author of more than 1,500...