As can be seen in figure 3, many events took place at the same time. From our review, the documentation from the APS source selection  process shows that (1) no officials from the offering companies  participated in the source selection process, and (2) all offerors were  evaluated based on the same criteria contained in the request for  proposals. In response to this request for proposals, four proposals were  received. Trade Study Used Consistent Method in Reaffirming Vertical Launch Concept

The APS development contract required the winner of the source selection  to perform a trade study identifying and assessing competing APS  alternatives. The trade study used a methodology consistent with Army  guidance to evaluate all alternatives, ultimately selecting Raytheon’s  vertical launch as the best design. Since  the trade study was not a source selection, FAR contract provisions  regarding organizational conflicts of interest did not apply and Raytheon  was free to participate in the study as the responsible contractor. The stakeholders made the final selection. The Army expects the vertical launch concept to be available for prototype  delivery to current force combat vehicles in fiscal year 2009 and for testing  on a FCS vehicle in 2011. Also, the FCS  vehicles have not been fully developed yet. Army and Lead Systems Integrator Had Extensive Roles in APS Subcontractor Selection and Trade Study

The Army and the lead systems integrator were both extensively involved  in preparing for and conducting the APS subcontractor selection and the  trade study. Similarly, Army FCS officials, as well as technical experts  from Army research centers, were members of the trade study technical  team and also concurred in the choice of the vertical launch concept. OFT Process for Evaluating APS Was More Test-Based and Near-Term Oriented

The process followed by OFT to meet the urgent needs of the Central  Command was characterized by a simpler evaluation of active protection  systems with potential for near term fielding, followed by actual physical  testing of the  APS candidate system that the OFT considered most  technically mature, the Trophy. The Army’s Program Manager’s Office for  Close Combat Systems was also involved in this evaluation. While the  testing of Trophy had a high success rate, the Joint Rapid Acquisition Cell  decided to defer fielding the Trophy based, at least in part, on the  recommendations of the Army that the testing was not realistic and the  Trophy’s integration on the platform would delay fielding of other useful  capabilities. These systems were evaluated because the OFT and Navy and Army  officials considered them to be the most promising APS solutions available  within the required schedule. Conclusions

The FCS lead systems integrator, with support from the Army, followed a  consistent and disciplined process in both selecting Raytheon to develop  the APS for FCS and in conducting the trade study and followed the lead  systems integrator subcontract and FAR provisions for avoiding  organizational conflicts of interest. While the role played by Raytheon in  the trade study was in accordance with its contract and thus not improper,  the rationale for having the trade study follow the source selection is not  entirely clear. The purpose of the trade study was to select the best  concept; yet, the source selection process that preceded it had, in fact,  chosen Raytheon primarily on the technical merits of its vertical launch  design concept. OFT officials  believed that the Trophy should be tested further to answer the questions  raised by the Army and to provide insight into its capabilities. Appendix I: Scope and Methodology

To develop the information on the U.S. Army’s decision to pursue a new  APS system under the FCS program, we interviewed officials of the Office  of the Assistant Secretary of the Army (Acquisition, Logistics and  Technology); the Tank-Automotive and Armaments Command; the Joint  Rapid Acquisition Cell; the Office of Force Transformation; the Naval  Surface Warfare Center (Dahlgren Division); the Program Manager for the  Future Combat System (Brigade Combat Team); and the Future Combat  System Lead Systems Integrator.
Why GAO Did This Study

Active Protection Systems (APS) protect vehicles from attack by detecting and intercepting missiles or munitions. In 2005, the lead systems integrator for the Army's Future Combat Systems (FCS) program sought proposals for an APS developer and design and to deliver APS prototypes on vehicles by fiscal year 2009. Raytheon was chosen the APS developer. At the same time, the Department of Defense's Office of Force Transformation (OFT) evaluated near-term APS for potential use in Iraq. GAO was asked to review the Army's actions on APS/FCS: (1) the process for selecting the subcontractor to develop an APS for FCS and if potential conflicts of interest were avoided; (2) the timing of the trade study and if it followed a consistent methodology to evaluate alternatives, and the results; (3) the role the Army and Boeing played in selecting the developer; and (4) the process followed to provide a near-term APS solution for current forces.

What GAO Found

In selecting the APS developer, the Army and Boeing--the FCS lead systems integrator--followed the provisions of the FCS lead systems integrator contract, as well as the Federal Acquisition Regulation, in addressing organizational conflicts of interest. No officials from the offering companies participated in the evaluation and all offerors were evaluated based on the same criteria. Four proposals were evaluated and three were determined to be comparable in terms of cost and schedule. The winner--Raytheon--was chosen on technical merit, as being more likely to meet APS requirements although its design had less mature technology. The APS development contract required the source selection winner to perform a trade study to assess alternatives and select the best design for development, and the Raytheon design was chosen. The trade study applied a consistent methodology to all alternatives before selecting Raytheon's vertical launch design. While the role played by Raytheon in the trade study was in accordance with its contract, the rationale for having the trade study follow the source selection is not entirely clear. The purpose of the trade study was to select the best concept; yet the source selection process that preceded it had, in fact, chosen Raytheon primarily on the technical merits of its vertical launch design concept. Although the vertical launch technology is not mature, the Army estimated that it could be available for prototype delivery to current force vehicles in fiscal year 2009 and tested on a FCS vehicle in 2011. This may be an optimistic estimate, as the FCS vehicle is yet to be fully developed. The Army and Boeing were extensively involved in APS source selection and the trade study. FCS officials actively participated and concurred in the final selection of the APS developer. FCS officials and technical experts from Army research centers took part in the trade study and helped choose the vertical launch design. Boeing officials took part in various ways and, with the Army's concurrence, selected Raytheon as the APS developer, participated in the trade study, and recommended the vertical launch approach. In its pursuit of a different APS concept, OFT was responding to an urgent need statement issued by the Central Command with potential for near-term fielding. This evaluation centered on the results of physical testing of the most technically mature candidate system, the Trophy. Decisions on how to proceed with Trophy involved disagreement between OFT and the Army. While the Trophy tests were successful, the Joint Rapid Acquisition Cell decided to defer fielding the APS system, based in part on the recommendation of Army officials, who believed that testing had not been realistic and integrating it on the platform would delay fielding other useful capabilities. OFT officials proposed additional testing of Trophy to answer these questions, but funding for further OFT testing of this system was discontinued after the Joint Rapid Acquisition Cell's decision.