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Home›Debt›Army restarts $ 45 billion combat vehicle competition

Army restarts $ 45 billion combat vehicle competition

By Joe Clayton
March 11, 2021
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The US military officially restarted efforts to replace its Bradley infantry fighting vehicle, six months after pulling the plug on a previous $ 45 billion attempt that produced only one competitor.

Late last week, Army officials released a draft RFP for a preliminary design of its Optionally Manned Combat Vehicle (OMFV), the service’s fourth attempt to replace the Bradley since 2009. L The previous effort, abandoned in January, failed after the field was reduced. to one General dynamics (NYSE: GD) Entrance.

Expect General Dynamics to be back this time around, along with potential offers from the British defense giant. BAE systems (OTC: BAES.Y) and Germany Rheinmetall (OTC: RNMBY). Last time around, Rheinmetall teamed up with Raytheon, which has since merged to be part of Raytheon Technologies (NYSE: RTX), and the Germans will likely either have to find another partner or work with Raytheon again.

The application is preliminary by design, outlining the military’s vision for the vehicle and general specifications and performance characteristics, but it leaves a lot of room to the imagination of businesses. This is a change from last time and could impact future development efforts.

Image source: General Dynamics.

It’s bigger than a single vehicle

The competition was relaunched in large part because the military couldn’t get enough participants last time around. The Battle of OMFV is one of the first major programs executed by Army Futures Command, an effort launched in 2018 to modernize the service.

The Pentagon is committed to Futures Command, but it’s fair to say that its initial efforts were disappointing. A number of potential OMFV bidders dropped out the first time around because either the requirements were too strict or the schedule was too tight.

For example, the Rheinmetall / Raytheon team has been disqualified last year, just days after the deadline, at least in part because they couldn’t get their prototype from Germany to the Army’s Aberdeen Proving Ground in Maryland on time.

The military is trying to avoid a similar fate this time around, noting in the RFP that it has “avoided quantifying or prescribing critical performance levels wherever possible.”

Rheinmetall Lynx FK41

Image source: Rheinmetall.

Major General Brian Cummings, the Army’s program manager for ground combat systems, made the point in a statement announcing the new competition.

“We don’t want to lock the industry into a solution,” Cummings said. “We want to inspire the industry as it leans forward and thinks creatively to bring to the Army the technologies and innovative solutions needed to achieve our vision – both in terms of the ability to integrating the new technologies we see today and leaving room for future growth on the OMFV Platform. “

Supply is evolving and OMFV to this day reminds that change can be turbulent. But with the military’s commitment to revitalize itself through Futures Command in the years to come, all defense contractors will be watching closely to see how this effort unfolds.

A long fight ahead

The military’s plan from here is to keep the request open for 40 days to gather industry feedback, with the goal of awarding up to five design contracts next June before a possible firing. This means that the military is still a long way from replacing the Bradley.

It’s hard to cripple the competition without knowing who will be in it. General Dynamics is supposed to compete, but their previous experience is unlikely to be a significant advantage: If the military were happy with what the company offered the last time around, there’s a good chance we won’t have a reboot. .

I would expect BAE to step into the fray, or at least be heavily involved in the planning process before making a final decision. Rheinmetall will also likely want to try again to win a key US contract, although now that Raytheon is part of a larger and more diverse aerospace conglomerate, the company may decide to put its resources elsewhere.

A number of mid-sized companies, including L3 Harris (NYSE: LHX), International scientific applications (NYSE: SAIC) or even Leidos Holdings (NYSE: LDOS), might be interested in teaming up with Rheinmetall if the German company needs a partner.

General Dynamics and BAE also fight in the separate Mobile Protected Firepower (MPF) light tank competition, but the army’s large ground vehicle rewards don’t come often. There will likely be plenty of companies that will at least consider throwing their hats in the ring for OMFV.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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