Future Combat Systems contract overhauled

For the second time in less than a year, the Army is restructuring its Future Combat Systems program, this time on the heels of sharp criticism from legislators and an unflattering report by the Government Accountability Office.

After two months of review, Army Secretary Francis J. Harvey announced this week that the service would restructure the contractual and managerial aspects of the program designed to link 18 manned and unmanned weapons systems via a common network.

Harvey also directed that an Army Modular Force Integration Office be established to ensure technologies are spiraled into troop systems as soon as they are available. Raymond Dubois, the Army's acting undersecretary, and Gen. Richard Cody, the Army's vice chief of staff, will oversee the office.

The $107.9 billion program faces network, developmental and financial challenges that have slowed progress, according to Paul L. Francis, director of acquisition and sourcing management at GAO.

"Nearly two years after program launch and about $4.6 billion invested to date, requirements are not firm and only 1 of over 50 technologies are mature?activities that should have been done before the start of system development and demonstration," Francis told a Senate subcommittee last month.

Francis said FCS' information network is dependent on the success of the Joint Tactical Radio System and the Warfighter Information Network-Tactical, both facing significant technical challenges and aggressive schedules that threaten the fielding of future force capabilities. JTRS and WIN-T are separate programs and not included in FCS costs.

One of the main bones of contention was with Sen. John McCain (R-Ariz.) over FCS's choice of contract vehicle. The Army chose a so-called "other transaction agreement" contract instrument rather than a normal procurement structure with Boeing Co.

The OTA structure allowed the Army and Boeing to negotiate contract terms based on the program requirements and their needs, Francis said. A traditional procurement vehicle has clauses that place limits on contract negotiations and allows the government to perform audits.

Under the restructuring, Harvey changed the contract vehicle from OTA to a federal acquisition regulation-based contract, which falls under the Truth in Negotiations Act, the Procurement Integrity Act, Cost Accountability Standards and an Organizational Conflicts of Interest clause.

"The OTA was appropriate for the earlier phases of FCS, but with the implementation of the Army Modular Force Initiative and last summer's programmatic restructuring of the FCS program, we need a contractual arrangement that best ensures FCS is properly positioned in the modular force and that its technologies are spiraled in as soon as possible," Harvey said.

Harvey and Army chief of staff Peter J. Schoomaker will perform at least three reviews of FCS each year. Additionally, the Army Audit Agency, the Army Science Board and an outside panel of advisors will conduct periodic independent cost, schedule and technical viability assessments, according to Harvey's memo.

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