The truck replacement effort is known as the Family of Medium Tactical Vehicles (FMTV) program. While the current contractor is producing under the follow-on contracts, the Army plans to develop a second source to produce FMTV trucks. Recent government inspection data indicates that the contractor is still not consistently producing trucks within the quality standards set for FMTV trucks. The Army does not know whether fielded FMTV trucks are performing adequately. Also, the Army plans to continue to accept new models under the relaxed final acceptance inspection method. Conclusions

Because the FMTV program experienced significant problems under the current production contract, the Army needs to implement safeguards to ensure that the government receives trucks that meet FMTV program quality standards under the follow-on production contracts. The current contract allowed the contractor to continue producing trucks during testing even though the trucks were unable to pass the tests and demonstrate that they met FMTV performance and reliability, availability, and maintainability requirements. These trucks required modifications to achieve satisfactory performance, and the modification effort caused program delays. To provide a safeguard on the follow-on contracts that could preclude the type of problems that occurred under the current contract, we recommend that the Secretary of Defense direct the Secretary of the Army to include a clause in the follow-on production contracts that would delay the start of production until the new FMTV model trucks demonstrate that they meet FMTV performance and reliability, availability, and maintainability requirements. Army Has Not Determined Whether Its Second-Source Plan Will Reduce Program Costs

The Army plans to compete future procurement of the FMTV trucks with the expectation that program costs can be reduced. However, it has not performed an analysis to determine the costs and benefits of its plan or compared its plan with other alternatives, including (1) dividing the program into 5-year production increments and competing each increment among all qualified contractors, (2) delaying the development of the second source until funds are available to support both the current contractor and the second source without a fielding break, or (3) continuing with the current contractor for the remainder of the program. Our preliminary analysis of the production quantities that the contractors could expect to share from the competition indicates that the Army’s plan will not result in program cost savings. The current contractor and second source will share the annual production.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Army's Family of Medium Tactical Vehicles (FMTV) program.

What GAO Found

GAO noted that: (1) the Army's plan for implementing its follow-on production contracts needs to ensure that the government receives trucks that meet FMTV program quality standards; (2) the current contract allowed the contractor to produce trucks during testing even though the trucks were unable to pass testing and demonstrate that they met FMTV performance and reliability, availability, and maintainability requirements; (3) these trucks required modifications to achieve satisfactory performance that caused program delays; (4) recent government inspection data and quality deficiency reports on trucks in the field show that the contractor is not consistently producing trucks within the quality standards set for FMTV trucks; (5) however, because of incomplete data, the Army does not know overall whether FMTV trucks are performing adequately in the field; (6) under the follow-on contracts, full-rate production of new model trucks will be allowed to start before the trucks pass testing; (7) also, the Army plans to continue to accept the new models under its sampling inspection method; (8) this approach, which was followed under the current contract, caused program delays and uncertainty about the quality of the fielded trucks; (9) the Army has not instituted safeguards to ensure that the follow-on contracts do not result in problems similar to those experienced under the current contract; (10) the Army plans to compete future procurement of the FMTV trucks with the expectation that program costs can be reduced; (11) therefore, it has decided to develop a second source to produce FMTV trucks; (12) the current contractor and second source will share the annual production; (13) the Army has not performed an analysis to determine the costs and benefits of this plan or compared it to other alternatives, including: (a) dividing the program into 5-year production increments and competing each increment among all qualified contractors; (b) delaying the development of the second source until funds are available to support both the current contractor and the second source without a fielding break; or (c) continuing with the current contractor for the rest of the program; and (14) GAO's preliminary analysis of the production quantities that the two contractors could expect to share from the competition indicates that the Army's plan may not result in program cost savings.