Truckmakers put off by Army red tape contract rules GAO says

America’s leading truck manufacturers are passing on lucrative contracts with the U.S. Army because of burdensome regulations, the slow pace of the process and being stuck with the bill for a prototype if the contract is canceled at the last minute.

The Army is studying ways to modernize its fleet of tactical wheeled vehicles, which range from Humvees to heavy equipment transporters to haul soldiers and critical supplies, such as munitions and fuel, to the battlefield.

“This modernization relies, in part, on a viable industrial base with multiple companies that can compete to deliver the capabilities needed by the warfighter at an affordable price,” according to a just-issued report from the Government Accountability Office, the congressional watchdog agency. 

Frustrated executives from truck manufacturing companies and trade associations told GAO auditors of multiple “challenges” in dealing with the Army, including inconsistent communications about the capabilities and requirements needed for their tactical wheel vehicle (TWV) fleet. Some company officials referred to the communication as the “demand signal” and say the Army has been inconsistent about it in the past. Heavy upfront costs also were a deterrent to bidding.

“In the past, the Army has periodically communicated the need for capabilities for the TWV fleet. In response, the companies then expend their own funds to develop capabilities and prepare for submitting an offer,” the GAO investigators wrote. “When the Army later chose not to pursue new capabilities, the companies may lose their investment and thus were less likely to be involved in future efforts.”

The Army’s acquisition process is overly complex, requiring manufacturing companies to put specialists on their payrolls just to help them navigate a bewildering accumulation of regulations, contract terms and military standards. According to the GAO report, the complex process can drag on for a year or more, leading to financial difficulties for smaller companies.

“This process can add unnecessary costs and burdens when their business success can be sustained by commercial market demands with less complex processes,” the investigators wrote.

The Army has also missed opportunities to incorporate emerging technologies into its truck fleets, innovations that weren’t considered when the manufacturing specifications were revealed. Technology development is simply occurring at a faster pace in the commercial market.

“Many of the companies we spoke to prefer to not be locked into a design for a long time â€" as the Army prefers â€" as their design becomes antiquated over time,” the investigators wrote. 

Also, the Army generally tells manufacturers that it wants its tactical wheeled vehicles to be custom-built, which can drive up cost and development time. According to the GAO report, it’s a challenge because the Army’s specifications are inflexible and have elements not found in commercial applications.

“Industry’s commercial products are highly customizable,” the GAO report stated. “Their customers can specify commercially available engines, transmissions and suspensions, tires or other components within an existing truck design.”

The Army expects to issue a new strategy for purchasing its fleet of tactical wheeled vehicles next year.

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