Army Combat Vehicles May Weather Sequestration Better Than Most

By Stew Magnuson
The Army's combat vehicle programs are in a better position to endure large cuts that may come as a result of sequestration because most of them are in the early stages of their development, a senior official said Oct. 23 at the Association of the United States Army annual meeting in Washington, D.C.
Scott Davis, program executive officer for ground combat systems, said the Abrams tank is the only acquisition program currently under a multi-year contract.
"We are sort of in a transitional phase right now. We don't have a large production stream" like the Air Force's KC-X tanker program, he said.
"Given the speculation that there might be some reduction, I think it is manageable from the perspective that we are in developmental efforts and we may be able to accommodate the adjustments," he said, stressing that he was not speculating on whether the across-the-board cuts could occur at the end of the year if Congress doesn't come up with a budget plan.
The office is currently carrying out upgrades, also known as engineering change proposals, to its Abrams and Bradley Fighting Vehicles. It is in the beginning stages of developing the Armored Multi-Purpose Vehicle and the Ground Combat Vehicle. The Army is several years away from awarding production contracts for these programs.  
Of more immediate concern to the office is the health of the industrial base, Davis said. The good news is that large amount of contingency funding for the wars over the past decade has left its current fleets with low average ages, and a good supply of spare parts. The bad news is that this does not augur well for businesses expecting big purchases in the future.
The office is not worried about the large prime contractors, the concern is for the second and third lower tier suppliers, which are at risk of going out of business, or quitting the military market, and leaving the Army with obsolete parts, he said.
The goal is to identify the "fragile" suppliers, the ones that are on the edge of going out of business because they are dependent on one program, and the "critical" companies that produce a particular part, he said.
"We are paying particular attention to those in order to those elements of the supply base to make sure that we protect the ability to deploy and support our forces," he said.
That is not an easy task.There are thousands of lower tier suppliers, and some are reluctant to admit that they might be in trouble. The stakes could be high if one of these critical suppliers goes belly up. It takes several years for the Army to certify that a part is safe to go on a military vehicle, he said.
The office has hired an outside firm to visit prime contractors in order to get a better handle on the supply chain, he said. The ultimate goal is to create an industrial base analysis tool that can help program managers see how their decisions impact suppliers, and to give them a heads up if a critical supplier is in trouble.
A remedy might be helping that supplier change its practices so it can make a profit on lower quantities of purchases, Davis said.
A supplier of a critical component hasn't gone out of business yet, but it is a possibility in the next couple years, he added.
Photo Credit: Army

Topics: Combat Vehicles, Defense Department, DOD Budget

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