Amphibious Combat Vehicle Acquisition: Marine Corps Adopts an Incremental Approach
Released: 2015-04-15T00:00:00

Letter

Background

According to USMC officials, the AAV has become increasingly difficult to operate, maintain, and sustain. As weapons technology and threat capabilities have evolved over the past four decades, the AAV is viewed as having capability limitations in the areas of water speed and land mobility, lethality, protection, and network capability. The AAV is a self- deployed tracked (non-wheeled) vehicle with three variants, each describing its intended function—Personnel, Command, and Recovery. The AAV has a water speed of approximately six knots, and needs to be deployed from within 7.4 nautical miles of the shore. This factor may represent a significant survivability issue not only for the vehicle’s occupants, but also for naval amphibious forces that must move closer to potential threats on shore to support the vehicle. Over time, emerging threats—such as next generation improvised explosive devices—have changed the performance requirements for a vehicle that moves from ship to shore.

According to DOD, the need to modernize USMC’s capability of transitioning from ship to shore is essential. In response to the need for new and better capabilities, the USMC began development of the EFV in 2000. We reported on the EFV program in 2006 and 2010. The EFV was to travel at higher water speeds—around 20 knots—which would have allowed transporting ships to launch the EFV further from shore than the AAVs it was to replace. However, following the expenditure of $3.7 billion between fiscal years 1995 and 2011 and a 2007 breach of a statutory cost thresholdcanceled by DOD due to affordability concerns. DOD authorized the USMC to seek a new solution, emphasizing the need for cost- effectiveness and requiring the establishment of cost targets. The USMC was granted flexibility in tailoring its acquisition approach to achieve those goals. that program was restructured and subsequently, in 2011, In 2011, the USMC completed initial acquisition documentation providing the performance requirements of a new replacement amphibious vehicle called the ACV. The ACV would be self-deploying with a water speed of 8 to 12 knots—permitting deployment beyond visual range of the shore— and would provide for sustained operations on shore with improved troop protection. The ACV would not, however, be required to achieve high water speed. An analysis of alternatives was completed for the ACV in the summer of 2012. This analysis identified two potential solutions for the ACV performance requirements. However, USMC leadership then requested that an affordability analysis be completed to explore the technical feasibility of integrating high water speed into the development of the ACV. According to DOD officials, the analysis indicated that achieving high water speed was technically possible but required unacceptable tradeoffs as the program attempted to balance vehicle weight, capabilities, and cost. Meanwhile, the USMC retained a requirement to provide protected land mobility in response to the threat of improvised explosive devices—a requirement the AAV could not meet due to its underbody design. In 2014 we reported that, according to program officials, the program office was in the process of revising its ACV acquisition approach based on this affordability analysis. In addition, DOD officials reported that the 2012 ACV analysis of alternatives might need to be updated or replaced based on potential changes to required capabilities.

ACV Acquisition Approach Prioritizes Protected Land Mobility over Amphibious Capabilities

Since we reported on the ACV acquisition in 2014, the USMC has adopted a new ACV acquisition approach consisting of three concurrent efforts that emphasize the requirement for protected land mobility in the near term and seek improved amphibious capabilities over time. This approach is a significant change from the more advanced amphibious capabilities sought for the ACV in 2011. According to USMC officials, the first effort is the AAV Survivability Upgrade Program that plans to upgrade legacy AAV protection and mobility. The second effort subdivides into two increments, ACV 1.1 and 1.2. The third effort, referred to as ACV 2.0, focuses on technology exploration to attain high water speed capability. According to USMC officials, this acquisition approach was selected based on several factors, including (1) recognition that the ACV would spend much of its operating time on land, (2) shortfalls in the AAV’s ability to meet protected land mobility requirements once on shore, and (3) technical and affordability challenges that preclude the development of a high water speed vehicle in the near term. Figure 1 provides information on these three concurrent efforts.

AAV Survivability Upgrade Program Intends to Mitigate Current AAV Fleet Shortfalls in Force Protection

The AAV Survivability Upgrade Program expects to upgrade survivability and mobility capabilities for a portion of the existing AAV fleet, thereby providing increased protection against threats such as improvised explosive devices. The AAV is expected to remain in operation until 2035. According to DOD officials, planned upgrades include the addition of underbelly armor, blast resistant seats, external fuel tanks and other modifications, such as suspension upgrades, intended to maintain mobility given the weight of extra armor. The upgraded AAVs expect to retain the six knot water speed of the legacy AAV. The AAV Survivability Upgrade Program plans to upgrade 392 of the fleet’s 1058 AAVs. The upgrades will be made to the AAV Personnel variant—the version of the AAV used to transport infantry. The estimated average procurement unit cost for the upgrades—the total procurement cost divided by the number of units to be procured—is $1.7 million (fiscal year 2014 dollars). The program has passed Milestone B with anticipated initial operational capability—generally attained when some units in the force structure have received the upgraded vehicles and have the ability to employ and maintain it—in fiscal year 2019.

ACV Acquisition Emphasizes Protected Land Mobility in the Near Term and Improved Amphibious Capabilities in the Second Iteration

The first increment of ACV development—ACV 1.1—is a wheeled vehicle that is intended to provide enhanced protected land mobility and limited amphibious capability. ACV 1.1 is a continuation of the previously suspended Marine Personnel Carrier program.speed of five knots, ACV 1.1 intends to offer swim speeds comparable to the AAV and is expected to swim from shore to shore, crossing obstacles such as rivers, rather than from ship to shore. The ACV 1.1 is not planning to have a self-deployment capability and as a result, will rely on the assistance of connectors to move from ship to shore. The vehicle expects to feature a troop-carrying capacity of 10 infantry, with the objective of expanding this capacity to 13 infantry. According to program officials, the ACV acquisition will be informed by both a 2008 analysis of alternatives done for the Marine Personnel Carrier program as well as the 2012 ACV analysis of alternatives. USMC has recently completed an At an expected water update to these two analyses—the 2014 ACV analysis of alternatives— with a focus on cost and affordability that, according to DOD officials, needed to be updated to reflect the current approach. The ACV 1.1 will likely be used concurrently with upgraded AAVs that are expected to provide amphibious capabilities that complement the enhanced protected land mobility sought by ACV 1.1. Table 1 provides a summary of selected capabilities of the legacy AAV, upgraded AAV and ACV 1.1.

The 2012 analysis of alternatives done to support the ACV acquisition considered a vehicle based on the Marine Personnel Carrier, with capabilities similar to the ACV 1.1, and concluded that the vehicle was not an effective alternative to fill the identified ACV water mobility capability gaps. The analysis found that the vehicle performed well in land-based scenarios, but as a non-amphibious armored personnel carrier, did not perform as well in amphibious assault scenarios. In addition, the vehicle’s reliance on a connector craft to travel from ship to shore would extend the time necessary to complete force landings and achieve objectives in amphibious scenarios. Since a connector craft, such as the ship to shore connector currently being developed by the Navy (see figure 2), would have to transport these vehicles as well as personnel and other vehicles and equipment, it would also increase the number of connector loads and connector crew time. The analysis found that the increased use of connectors would result in a significant delay relative to self-deploying alternatives. Finally, the vehicle had less capacity than the other vehicles assessed in the analysis. The vehicle held nine infantry—similar to ACV 1.1’s threshold capacity of 10—while the other assessed vehicles held 17. According to the analysis, reduced capacity would require a higher number of vehicles to transport an infantry battalion. The larger number of vehicles would then require additional space on transportation vessels, potentially displacing other cargo and impacting logistical support and manning, as well as increasing the number of these vehicles required in the field. However, according to the analysis, the resulting vehicle dispersion would reduce infantry exposure to improvised explosive devices and increase the number of vehicles available to support a counterattack.

The USMC plans to acquire 204 ACV 1.1s and anticipates achieving initial operational capability in fiscal year 2020. According to program officials, the current estimated average procurement unit cost is between $3.8 million and $7.2 million (fiscal year 2014 dollars). The ACV 1.1 effort will enter the acquisition process at Milestone B, currently scheduled for the first quarter of fiscal year 2016. According to DOD officials, the planned use of existing, non-developmental technologies in ACV 1.1 reduces acquisition risk and facilitated the decision to enter the acquisition process at Milestone B with the goal of fielding a solution more quickly. The program office issued a Request for Proposal in the second quarter of fiscal year 2015 and plans to award contracts to two vendors at Milestone B and require each vendor to provide 16 prototype vehicles. DOD officials stated that the large number of prototypes will facilitate and expedite the testing process, allowing multiple tests to take place concurrently, and allowing testing to continue in the event of a prototype breakdown. They indicated that the USMC plans to begin testing the ACV 1.1’s swim capability and other factors in fiscal year 2017. The two contracts are to run through the engineering and manufacturing development phase of the acquisition process, at which point USMC anticipates potentially down selecting to a single contractor. Figure 3 provides a notional drawing of the ACV 1.1.

The second increment of ACV development—ACV 1.2—aims to improve amphibious capability. Program officials anticipate that ACV 1.2 will demonstrate amphibious capability that matches the legacy AAV, including the ability to self-deploy and swim to shore without the assistance of connector craft. According to DOD officials, ACV 1.2 will be based on ACV 1.1 testing and some 1.1s will be retrofitted with ACV 1.2 modifications. The USMC plans to acquire approximately 490 ACV 1.2s with initial operational capability scheduled for fiscal year 2023. In addition, the USMC plans to complete fielding of all ACV 1.1s and 1.2s, as well as the upgraded AAVs between the years 2026 and 2028.

According to DOD officials, the changes made for the ACV 1.2 increment may be done through improvements within the same program, or ACV 1.2 may be a separate program from ACV 1.1. This determination has not yet been made. In previous reports, we have found that managing weapon systems that are being developed in increments as separate acquisition programs with their own cost and schedule baselines facilitates management and testing and helps avoid unrealistic cost estimates. This practice can result in more realistic long-range investment funding and more effective resource allocation.

Technology Exploration Is Underway for High Water Speed Capability for Use in a Possible ACV 2.0

The third effort, referred to as ACV 2.0, focuses on technology exploration to attain high water speed capability. According to DOD, high water speed remains a critical capability. Technology exploration efforts are pursuing design options that may enable high water speed capability without accruing unacceptable trade-offs in other capabilities, cost or schedule. According to USMC officials, vehicle weight is the key barrier to achieving high water speed. Current technology exploration efforts include some technology from the canceled EFV program and focus primarily on various approaches addressing this weight challenge, including improving the technology that lifts the vehicle body onto plane and reducing the vehicle weight. According to DOD officials, the results of this high water speed research, knowledge gained from fielding the ACV 1.1 and 1.2, and information from the naval surface connector strategy are expected to inform the development of a replacement for the AAV fleet. According to officials, ACV 2.0 is a conceptual placeholder for that future replacement decision, which is expected to occur in the mid-2020s. High water speed capability may ultimately be achieved through an amphibious vehicle or a connector craft that will provide high water speed for vehicles without that capability.

Upcoming Activities Will Permit Further Analysis to Determine Use of Best Practices

Our prior work on best practices has found that successful programs take steps to gather knowledge that confirms that their technologies are mature, their designs stable, and their production processes are in control.the right knowledge at the right time, enabling leadership to make informed decisions about when and how best to move into various acquisition phases. Successful product developers ensure a high level of knowledge is achieved at key junctures in development, characterized as The knowledge-based acquisition framework involves achieving knowledge points. During the initial stages of an acquisition process, referred to as Knowledge Point 1, best practices recommend ensuring a match between resources and requirements. Achieving a high level of technology maturity and preliminary system design backed by robust systems engineering is an important indicator of whether this match has been made. This means that the technologies needed to meet essential product requirements have been demonstrated to work in their intended environment. In addition, the developer has completed a preliminary design of the product that shows the design is feasible. Figure 4 further describes the three knowledge points and identifies the ACV 1.1 acquisition’s status within the DOD acquisition process.

The ACV 1.1 acquisition has yet to reach the first knowledge point, limiting our ability to determine how fully the acquisition will adopt the best practices knowledge-based framework. However, our review of the planned acquisition approach for ACV 1.1 has identified both the use of— and a deviation from—best practices.

The ACV acquisition’s incremental approach to development is consistent with best practices. We have previously reported that adopting a more evolutionary, incremental strategy that delivers proven and operationally suitable capabilities when available—but acknowledges that more time is needed to deliver the full capabilities—can enable the capture of design and manufacturing knowledge as well as increase the likelihood of success in providing timely and affordable capability. The ACV acquisition demonstrates this evolutionary approach, seeking smaller increases in capability with improvements planned over time. In contrast, the canceled EFV program sought significant increases in capability in a single development process. The adoption of an incremental approach has helped the program progress towards striking the balance between customer needs and resources (e.g., technologies, cost and schedule) that is sought at Knowledge Point 1. The ACV program has demonstrated a willingness to trade customer needs—such as high water speed in the near term—and utilize mature technologies in order to identify an affordable solution that is available in the necessary time frames.

The ACV acquisition’s pursuit of high water speed capabilities via technology exploration is also aligned with best practices. In previous reports, we have found that DOD should separate technology development from product development, and fully develop technologies before introducing them into the design of a system. A science and technology environment is more conducive to the ups and downs normally associated with the discovery process. This affords the opportunity to gain significant knowledge before committing to product development and has helped companies reduce costs and time from product launch to fielding.

The ACV 1.1 acquisition is planning to hold its preliminary design review 90 days after the Milestone B decision. According to program officials, the program office is seeking a waiver to permit this approach. Best practices recommend that the preliminary design review is held prior to Milestone B to increase the knowledge available to the agency at development start. In 2012, we reported that beginning product development and setting the acquisition baseline before completing this review increases technical risks and the possibility of cost growth by committing to product development with less technical knowledge than recommended by acquisition best practices and without ensuring that requirements are defined, feasible, and achievable within cost and schedule constraints. According to DOD officials, the review will be held after Milestone B because no contracts will have been awarded prior to that time. In addition, they stated that the use of non-developmental technology will reduce acquisition risks and result in a high level of knowledge prior to the Milestone B decision. However, it is the program office’s intent that the engineering and manufacturing development phase be contracted under a hybrid contract that includes cost-plus-fixed-fee elements. Cost-plus-fixed-fee contracts are appropriate when uncertainties in requirements or contract performance do not permit the use of fixed-price contract types. These contracts are considered high risk for the government because of the potential for cost escalation. The selection of this contract type may denote some program risk; however, we will not be able to determine the extent of the risk and its potential impacts to the acquisition process until further information is available.

As the acquisition moves forward, we will continue to monitor the ACV effort by assessing its use of acquisition best practices.

According to program officials, a number of program documents, including a final report on the recent ACV 2014 analysis of alternatives update, were finalized to support a key program meeting that took place in March 2015. We have identified a number of best practices for the development of analyses of alternatives. These analyses can vary in quality, which can affect how they help position a program for success. In September 2009, we concluded that many analyses of alternatives do not effectively consider a broad range of alternatives for addressing a need or assess technical and other risks associated with each alternative. We have begun preliminary analysis on the existing 2008 Marine Personnel Carrier and 2012 ACV analyses of alternatives, including assessment of the analyses against our previously identified best practices and cost We have recently received the final report, the 2014 estimation criteria.ACV analysis of alternatives, reflecting how the prior analyses have been updated. Other documents completed recently include an acquisition strategy, results of a system requirements review, and the finalized document providing key acquisition requirements. These documents will permit us to conduct a more robust analysis and assessment of the ACV acquisition’s use of best practices.

Agency Comments and Our Evaluation

DOD provided written comments on a draft of this report. The comments are reprinted in appendix I.

In commenting on a draft of this report, DOD stated that it believes its efforts on this program are aligned with our best practices and it will continue to monitor the program and ensure that mitigations are in place to address potential risk areas. Given that we have not been able to conduct a robust analysis of key documents, including the analysis of alternatives, we cannot yet assess how well the program is aligned with best practices. DOD also provided technical comments that were incorporated, where appropriate.

We are sending copies of this report to interested congressional committees; the Secretary of Defense; the Under Secretary of Defense for Acquisition, Technology, and Logistics; the Secretary of the Navy; and the Commandant of the Marine Corps. This report also is available at no charge on GAO’s website at http://www.gao.gov.

Should you or your staff have any questions on the matters covered in this report, please contact me at (202) 512-4841 or makm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix II.

Appendix I: Comments from the Department of Defense

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgements

Key contributors to this report were Bruce H. Thomas, Assistant Director; Betsy Gregory-Hosler, analyst-in-charge; David Richards; Marie Ahearn; Brian Bothwell; Susan Ditto; Jennifer Echard; Dani Greene; Jennifer Leotta; Kenneth Patton; Karen Richey; and Ozzy Trevino.