DoD Awards BAE Systems $2.07 Billion for Armored Multi-Purpose Vehicles (AMPV) Engineering and Production

Contract Overview

Contract Amount: $2,006,654,646 ($2.0B)

Contractor: BAE Systems Land and Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2014-12-23

End Date: 2026-05-30

Contract Duration: 4,176 days

Daily Burn Rate: $480.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: THIS ACTION IS COST PLUS INCENTIVE-FEE (CPIF) 52 MONTH ENGINEERING AND MANUFACTURING DEVELOPMENT CONTRACT, WITH THREE FIXED PRICE INCENTIVE (SUCCESSIVE TARGETS) (FPI(S)) OPTION YEARS OF LOW RATE INITIAL PRODUCTION (LRIP) FOR THE ARMORED MULTI-PURPOSE VEHICLE (AMPV) REQUIREMENT. THE AMPV FAMILY OF VEHICLES (FOV) IS A MATERIEL SOLUTION REPLACEMENT FOR THE M113 FOV TO MITIGATE CURRENT AND FUTURE CAPABILITY GAPS IN FORCE PROTECTION, MOBILITY, RELIABILITY, AND INTEROPERABILITY BY MISSION ROLE VARIANT TO SUPPORT THE ARMORED BRIGADE COMBAT TEAM (ABCT) ACROSS THE SPECTRUM OF CONFLICT. THE AMPV FOV WILL REPLACE THE FIVE MISSION ROLES CURRENTLY PERFORMED BY THE M113 FOV BY TRANSFERRING THE CURRENT M113 MISSION EQUIPMENT PACKAGES (MEP) TO A NEW VEHICLE PLATFORM. THE AMPV VEHICLE FLEET WILL CONSIST OF THE FOLLOWING FIVE VARIANTS TAILORED TO SPECIFIC MISSION ROLES WITHIN ABCT: GENERAL PURPOSE (GP) VEHICLE; MISSION COMMAND (MCMD) VEHICLE; MORTAR CARRIER (MC) VEHICLE; MEDICAL EVACUATION (ME) VEHICLE; AND MEDICAL TREATMENT (MT) VEHICLE. A TOTAL QUANTITY OF 29 VEHICLES WILL BE DELIVERED DURING EMD (INCLUDING SYSTEM SUPPORT PACKAGES, SPECIAL TOOLS AND TEST EQUIPMENT, AND BALLISTIC HULLS), WITH 52 (LRIP OPTION YEAR 1), 105 (LRIP OPTION YEAR 2), AND 130 (LRIP OPTION YEAR 3) VEHICLES ANTICIPATED DURING THE LRIP OPTION YEARS. RANGE PRICING IS INCLUDED IN THE CONTRACT FOR OPTION PERIODS 2 AND 3.

Place of Performance

Location: YORK, YORK County, PENNSYLVANIA, 17408

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $2.01 billion to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: THIS ACTION IS COST PLUS INCENTIVE-FEE (CPIF) 52 MONTH ENGINEERING AND MANUFACTURING DEVELOPMENT CONTRACT, WITH THREE FIXED PRICE INCENTIVE (SUCCESSIVE TARGETS) (FPI(S)) OPTION YEARS OF LOW RATE INITIAL PRODUCTION (LRIP) FOR THE ARMORED MULTI-PURPOSE VEHICLE (AMPV) REQUIREMENT. T… Key points: 1. Contract type is Cost Plus Incentive Fee (CPIF) with Fixed Price Incentive (FPI) options, indicating shared risk and reward. 2. Competition was full and open, suggesting a competitive bidding process for this significant defense contract. 3. The AMPV program aims to replace the aging M113 fleet, addressing critical capability gaps in protection, mobility, and interoperability. 4. This contract falls under the Military Armored Vehicle manufacturing sector, a key area for defense modernization.

Value Assessment

Rating: questionable

The contract is CPIF with FPI options, making definitive value assessment difficult at this stage. The total award amount is substantial, but the final cost will depend on performance and achieved targets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically drives better pricing discovery. However, the CPIF structure means the final price is not fixed and can fluctuate based on cost performance.

Taxpayer Impact: The AMPV program represents a significant investment in modernizing the Army's armored fleet, aiming to enhance soldier protection and battlefield effectiveness, thus a necessary expenditure for national security.

Public Impact

Modernization of the U.S. Army's armored vehicle fleet, replacing outdated M113 vehicles. Enhancement of soldier survivability and operational capabilities in armored brigades. Potential for technological advancements in armored vehicle design and manufacturing. Impact on the defense industrial base, particularly in armored vehicle production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPIF contracts can lead to cost overruns if not managed tightly.
Long contract duration (4176 days) increases risk of scope creep and evolving requirements.
Reliance on specific manufacturing capabilities for advanced armored vehicles.

Positive Signals

Full and open competition should drive cost efficiencies.
Addresses critical capability gaps for the Armored Brigade Combat Team.
Clear objective to replace aging and vulnerable M113 fleet.

Sector Analysis

This contract is within the defense manufacturing sector, specifically focusing on armored vehicles. Spending benchmarks for similar large-scale vehicle development and production contracts can vary widely based on complexity and quantity, but $2.07 billion for engineering and initial production is significant.

Small Business Impact

The provided data does not indicate specific subcontracting plans for small businesses. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

The contract's CPIF structure necessitates robust oversight to monitor costs and contractor performance. The long duration and phased approach (EMD and LRIP) require continuous government oversight to ensure objectives are met within acceptable cost parameters.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost Overrun Risk (CPIF structure)
Schedule Slippage Risk (long duration)
Requirement Volatility Risk (evolving military needs)
Technical Performance Risk (complex system integration)
Supply Chain Disruptions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.01 billion to BAE SYSTEMS LAND AND ARMAMENTS L.P.. THIS ACTION IS COST PLUS INCENTIVE-FEE (CPIF) 52 MONTH ENGINEERING AND MANUFACTURING DEVELOPMENT CONTRACT, WITH THREE FIXED PRICE INCENTIVE (SUCCESSIVE TARGETS) (FPI(S)) OPTION YEARS OF LOW RATE INITIAL PRODUCTION (LRIP) FOR THE ARMORED MULTI-PURPOSE VEHICLE (AMPV) REQUIREMENT. THE AMPV FAMILY OF VEHICLES (FOV) IS A MATERIEL SOLUTION REPLACEMENT FOR THE M113 FOV TO MITIGATE CURRENT AND FUTURE CAPABILITY GAPS IN FORCE PROTECTION, MOBILITY, RELIABILITY, AND INTEROPERABILITY BY MISSION ROLE VARIANT

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND AND ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $2.01 billion.

What is the period of performance?

Start: 2014-12-23. End: 2026-05-30.

What are the specific performance metrics tied to the incentive fees in this CPIF contract, and how will they be measured to ensure optimal value for the taxpayer?

The contract details do not specify the exact performance metrics for the incentive fees. Typically, these relate to cost targets, schedule adherence, and technical performance milestones. The Department of the Army's contracting officers and program managers will be responsible for monitoring these metrics against pre-defined criteria. Robust reporting and verification processes are crucial to ensure that incentive fees are earned appropriately and that the final cost reflects achieved performance, thereby maximizing taxpayer value.

Given the long contract duration and the nature of evolving military requirements, what mechanisms are in place to mitigate the risk of obsolescence or scope creep for the AMPV program?

The contract includes multiple option years and a phased approach (EMD and LRIP), which allows for adjustments based on evolving requirements and technological advancements. The government's program management team will likely employ iterative development and regular reviews to incorporate necessary changes while controlling scope. Furthermore, the FPI(S) options suggest a structured approach to managing cost and scope over time, with defined targets that can be renegotiated if significant changes occur.

How does the AMPV program's projected operational effectiveness and cost compare to alternative solutions or upgrades for the M113 fleet, and what is the long-term cost-benefit analysis?

The AMPV is designed to provide a significant leap in capability over the M113, addressing critical gaps in protection, mobility, and interoperability that upgrades alone cannot fully resolve. While the initial investment is substantial, the long-term cost-benefit analysis likely favors replacement due to enhanced soldier survivability, reduced maintenance burden compared to heavily modified M113s, and improved mission effectiveness across various conflict scenarios. Detailed cost-benefit studies would typically inform such acquisition decisions.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56HZV13R0022

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 34201 VAN DYKE AVE, STERLING HEIGHTS, MI, 48312

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $2,848,167,951

Exercised Options: $2,006,654,646

Current Obligation: $2,006,654,646

Actual Outlays: $8,848,494

Subaward Activity

Number of Subawards: 2180

Total Subaward Amount: $1,237,103,261

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline