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Army Secretary Defends GCV, Helo Plans


The U.S. Army's top civilian pushed back against critics who say the service's next-generation combat vehicle is the wrong choice to replace the Bradley Fighting Vehicle.

The so-called Ground Combat Vehicle "is a highly viable program," Army Secretary John McHugh said during an April 30 breakfast with reporters. It's "one of our critical modernization efforts going forward," he said.

The Army plans to spend $38 billion to develop and build 1,904 of the tank-like tracked vehicles to replace a portion of its fleet of Cold War-era Bradleys, according to a Government Accountability Office report from March. They're designed to carry more armor, firepower and troops -- as many as a dozen soldiers, including a nine-man infantry squad and three crew members.

Whether the vehicle will survive the downturn in defense spending is uncertain. The Defense Department's budget request for fiscal 2014, which begins Oct. 1, recommended delaying the program by a year partly in response to automatic budget cuts and a strategic shift to the Asia-Pacific region.

The White House's Congressional Budget Office in an April report concluded it would cost $29 billion to buy 1,748 of the vehicles through 2030 -- almost twice as much as potential alternatives already on the market. For example, purchasing a similar number of German Puma or Israeli Namer infantry fighting vehicles would cost $14.5 billion and $19.5 billion, respectively, according to the report.

McHugh seemed to downplay the assessment, saying its assumptions were out of date.

"Most of the analysis that I've seen and the criticisms of it were based on data that was available a year and a half to two years ago," he said. "We've made very substantial changes in the program."

To reduce the vehicle's cost, the Army has decreased the number of technical requirements to between 200 and 300, down from more than 900, McHugh said. The service also decided to fund only one rather than two contractors through the next phase of development -- a move expected to save $2.5 billion, he said.

"It does add risk, we understand that," McHugh said. "But we think it's manageable risk."

The Army in 2011 awarded two contracts to begin developing the technology for the vehicle: $450 million to the U.S. subsidiary of BAE Systems Plc, based in London; and $440 million to General Dynamics Corp., based in Falls Church, Va.

McHugh also defended the Army's agreement with Chicago-based Boeing Co. to reuse transmissions to test new AH-64E Apache helicopters for service in Afghanistan.

The transmission manufacturer, Northstar Aerospace Inc., based in Bedford Park, Illinois, last year filed for bankruptcy, disrupting its ability to deliver the products on time, McHugh said. The Army worked with Boeing to revise the manufacturing process so that after the helicopters pass flight-qualification training, the choppers grounded and their transmissions are removed to test other aircraft, he said.

The arrangement has attracted the attention of Congress.

Rep. Loretta Sanchez, D-Calif., the ranking member of the House Armed Services Tactical Air and Land Forces Subcommittee, during a hearing last week asked Army officials, "Could you explain why the Army could take delivery of a helicopter that can’t fly?"

The Army isn't paying any additional cost, McHugh said. The service withholds $900,000 from each frame that isn't fully outfitted and delivered, he said. "We don't close out payment until we actually have the transmission reinserted and it is delivered appropriately to theater," he said.

The service didn't have any other practical alternatives, McHugh said.

"The one option other than the path we're on would have been pretty much shut the line down. That would have killed the delivery of the systems to the Army," he said. "It was an unconventional approach, but it was an unconventional situation."

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