A senior civilian in the Army’s acquisition organization says that the high cost of new tactical vehicles has less to do with inefficiency than with how long it has been since the service developed truly new systems. For instance, although the Abrams tank has been continuously upgraded and improved since the Cold War ended, the Army hasn’t actually produced new tanks at its plant in Lima, Ohio in 20 years. Instead, it strips the hulls of old tanks and then installs new features. Thus, it has had little experience over the past two decades in developing an all-new tank, and expectations about what the cost of a new system should be are not realistic.
Cost estimates have become a problem for the Ground Combat Vehicle (GCV), the next-generation troop carrier the Army hopes to purchase as a successor to the Bradley infantry fighting vehicle. The Army’s internal estimate is that if the GCV is produced in economical quantities, unit costs will average $10-12 million each. Program evaluators in the Office of the Secretary of Defense say the unit cost will be more like $17 million, based on past experience with similar programs. Either way, the price-tag sounds astronomical compared with that of legacy armored vehicles, especially given the fact that design features for the new system are driven by the need to counter improvised explosive devices that may only cost enemies a few hundred dollars to build and detonate.
However, the Army official says the high cost of the GCV reflects changes in the price of production inputs and operational features that have occurred in the two decades since all-new Bradleys were last in serial production. As with the Abrams tanks, recent work on the Bradley has consisted mainly of upgrades and modifications. Thus, some Army leaders harbor unrealistic expectations about how much a new front-line infantry vehicle should cost. One senior officer seriously proposed that a replacement for the venerable M113 troop carrier should cost about $1 million each, which is simply not achievable in today’s cost environment if the system is to be more than a glorified truck. Manufacturing costs alone — not counting training devices and other necessary items — will probably drive the unit cost of the M113 replacement above $2 million.
Fortunately, the M113 successor, officially designated the Armored Multi-Purpose Vehicle (AMPV), does not need the same kind of protection that a Ground Combat Vehicle will require, given the role it is expected to play in future conflicts. But like other combat systems the service must replace in coming years, the biggest hurdle it may have to overcome is naive ideas about what armored vehicles should cost in today’s world. Members of Congress may not understand all the intricacies of modern military technology and acquisition practices, but they all think they understand price-tags. Unfortunately, cost structures may have changed as much as technology over the last 20 years.
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