The FCS concept is designed to be part of the Army’s Future Force, which is intended to transform the Army into a more rapidly deployable and responsive force that differs substantially from the large division-centric structure of the past. The FCS family of weapons is now expected to include 14 manned and unmanned ground vehicles, air vehicles, sensors, and munitions that will be linked by an advanced information network. Fundamentally, the FCS concept is to replace mass with superior information—allowing soldiers to see and hit the enemy first rather than to rely on heavy armor to withstand a hit. The Army envisions a new way of fighting that depends on networking the force, which involves linking people, platforms, weapons, and sensors seamlessly together in a system of systems. Within the FCS program, eight types of manned ground vehicles are being developed, each having a common engine, chassis, and other components. One of the other common components is a hit avoidance system that features a set of capabilities to detect, avoid, and/or defeat threats against the manned ground vehicles. One of its subsystems is the APS, which is intended to protect a vehicle from attack by detecting a threat in the form of an incoming round or rocket propelled grenade (threat) and launching an interceptor round from the vehicle to destroy the incoming weapon. An APS system consists of a radar to detect the incoming weapon, a launcher, an interceptor or missile, and a computing system. The Army has employed a management approach for FCS that centers on a lead systems integrator to provide significant management services to help the Army define and develop FCS and reach across traditional Army mission areas. Boeing, along with its subcontractor, the Science Applications International Corporation (SAIC), serves as the lead systems integrator for the FCS system development and demonstration phase of acquisition, which is expected to extend until 2014. The lead systems integrator has a close partner-like relationship with the Army and its responsibilities include requirements development, design, and source selection of major system and subsystem subcontractors. In the case of APS, the first-tier subcontractors are the manned ground vehicle integrators, BAE and General Dynamics Land Systems, who are responsible for developing individual systems. BAE was designated the hit avoidance integrator, a role that covers more than active protection, and was responsible for awarding the subcontract to the APS developer. This subcontract has three elements: a base contract, option A to support the current force (the short-range solution) and option B to support the FCS manned ground vehicles (short- and long-range solution). Figure 1illustrates these relationships. A separate initiative involving active protection resulted from a Joint Urgent Operational Needs Statement, issued by Central Command and the Multi-National Corps in Iraq in April of 2005, which requested 14 special- equipped vehicles with a host of distinctive capabilities, one of which was an APS. The need statement called for a capability to field a combination of near-term technologies that would be useful in conducting force protection missions, reconnaissance and crowd control in Iraq and an evaluation of an active protection capability against rocket-propelled grenades as part of this suite of capabilities. To respond to this need statement, the Joint Rapid Acquisition Cell, a group within the Office of the Secretary of Defense (OSD) that seeks solutions to urgent needs and focuses on near-term or off-the-shelf equipment to meet these needs, provided funding to the Army, which worked with the OFT to evaluate various technologies, including an APS, for inclusion on the vehicles. The OFT was also an office within the OSD, and its role was to examine unanticipated needs and experiment with innovative technologies that could be used to meet warfighter needs. Both the process for evaluating APS sources and concepts to meet FCS needs and the urgent needs of the Central Command occurred nearly simultaneously, as shown in figure 3. As can be seen in figure 3, many events took place at the same time. The lead systems integrator for FCS completed its subcontractor selection for APS shortly before decisions were made on the near term system being considered to meet the Central Command need. The Trophy system was evaluated as a candidate system in both processes. In choosing the developer for the APS system, the FCS lead systems integrator, with Army support and concurrence, conducted a source selection and followed the FCS lead systems integrator subcontract provisions for avoiding organizational conflicts of interest. The purpose was to select the subcontractor for the APS that would be best able to develop the overall APS architecture to address the FCS requirements to defeat the short- and long-range antiarmor threats as well as meet the current force needs for defeating short-range rocket-propelled grenade attacks. The subcontractor selected would support the hit avoidance integrator in integrating APS technology into the FCS manned ground vehicles and also apply this architecture to the Army’s current force. The contract included two options that were to supply the specific design for the APS system: Option A for the short-range APS for the current force; and Option B for the short- and long-range solution for the FCS. These options would be awarded later, based on the results of trade studies subsequently performed. To protect against organizational conflicts of interest, contracts between the FCS lead systems integrator and its subcontractors preclude a subcontractor from conducting or participating in a source selection for other FCS subcontracts if any part of its organization submits a proposal. Under normal circumstances, since the APS would be part of the hit avoidance system of the FCS manned ground vehicles, the hit avoidance integrator, BAE, would have had the primary responsibility to issue the requests for proposals, conduct the source selection evaluation, and award the contract. In this capacity, BAE issued a draft request for proposals for the APS in April 2005. When the firm subsequently decided to submit a proposal on the APS subcontract, it was required, under the FCS lead systems integrator subcontract organizational conflict of interest provisions, to notify the lead systems integrator, Boeing, of its intention. BAE did so and the lead systems integrator reissued the request for proposals for APS in September 2005 and assumed the source selection responsibilities. BAE submitted its proposal but then had no further role in the evaluation of proposals or the actual source selection. After the source selection was complete, the lead systems integrator transferred contract responsibility to BAE, and BAE assumed the responsibility for awarding and administering the APS contract. 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. Three proposals were considered competitive, while the fourth was eliminated from consideration as it was considered “unsatisfactory” in technical merit and its architectural approach did not meet the requirements. Proposals from the remaining three companies—BAE, Raytheon, and General Dynamics Land Systems—were evaluated in the source selection process and no officials from these companies were on the evaluating or selecting teams. The source selection evaluation team consisted of 53 members, with 27 lead systems integrator representatives and 26 government representatives, including personnel from the FCS program manager’s office, Army research centers, and the Defense Contract Management Agency. After evaluating each of the proposals against the criteria spelled out in the request for proposals, the source selection evaluation team made its recommendation to the lead systems integrator source selection executive, who accepted itsrecommendation. Our review of the documentation shows that the criteria were ranked in order of importance, with technical merit considered most important, then cost, management/schedule and finally past performance. The technical merit criteria were divided into six sub-factors: systems engineering and architecture; expertise in APS technologies; simulation, modeling and test; fratricide and collateral damage; specialty engineering; and integration capability. Cost criteria were based on the realism, reasonableness, completeness, and affordability of the proposal. Management/ schedule criteria included such areas as expertise and experience in key positions. The past performance risk rating category was based on whether the respondents’ past performance raised doubts about their being able to perform the contract. Since all three proposals were deemed comparable in the areas of cost, management/schedule, and past performance, the primary discriminating factor became technical merit. According to the evaluation documentation, the technical merit scores were assessed based on whether the proposal demonstrated that the contractor understood the requirements and on its approach to meeting these requirements in each of the six technical merit sub-factors. Also, part of the technical score was a proposal risk evaluation, defined as the degree any proposal weaknesses could cause disruption of schedule, increase in cost, or degradation in performance. While the source selection’s stated purpose was to choose the company best able to develop the APS and not a specific design, each proposal used a specific APS system as an “artifact” to illustrate how they intended to meet the requirements. Even though, in theory, one company could have been chosen as the APS developer while another company’s preferred design could have been selected for development, much of the source selection assessment of technical merit was based on the “artifact” used for illustration. For example, in the technical merit category of APS expertise, the source selection evaluation of Raytheon states that “the vertical launch concept solves several design and integration problems.” Similarly, the BAE evaluation in the criteria of APS expertise states that “the proposed long-range countermeasure…design has effectiveness against the full spectrum of threats.” The General Dynamics Land System’s evaluation discusses the relatively high technology readiness level (TRL) of the “proposed Trophy system.” Therefore, while each company’s proposed solution was not the only aspect of the proposals to be evaluated, the evaluation documentation shows that the technical merit category was a key factor in the evaluation. The source selection evaluation team decided that the BAE and Raytheon proposals had the highest technical merit. BAE had a lower-risk approach and its solution had been tested in a relevant environment: however, the source selection evaluation team stated that this low-risk approach could prevent BAE from considering higher-risk options that would enable them to meet the full range of the performance requirements, such as protection from top-attack weapons. In addition, the source selection evaluation team determined that, while both Raytheon and BAE could develop the design presented in the BAE proposal, Raytheon would have the advantage if the vertical launch design was chosen. The evaluation team concluded that the Raytheon approach would have the best chance of meeting all the requirements. Based on the team’s recommendation, the lead systems integrator selected Raytheon. The integrator accepted the higher risk because it concluded that the Raytheon proposal had excellent technical merit and the firm would be better able to develop the vertical launch technology, if that were the design decided upon in the trade study. 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. According to the Army and the lead systems integrator, conducting the trade study after choosing the APS subcontractor could have resulted in selecting a different concept than Raytheon’s vertical launch design. However, in our view, this possibility appears remote given the selection of Raytheon as APS developer was based largely on the technical merits of its vertical launch design and the fact that it would be best able to develop that design. The development contract’s terms required the source selection winner to perform a trade study that would identify and assess APS alternatives and select an APS design from among competing alternatives. Therefore, once Raytheon won the development contract in March 2006, it was required to conduct the trade study rather than simply develop its own 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 trade study’s specific objective was to choose a single short-range APS architecture (launcher and interceptor) that best met active protection requirements for FCS manned ground vehicles, with consideration for application to the current force. The study was conducted in May 2006 and Raytheon’s vertical launch concept was selected as the design. Based on the trade study documentation, the study was conducted using a methodology prescribed by Army guidance and this methodology was applied consistently to all APS alternatives. Seven alternatives survived a screening process and were then evaluated against a set of weighted criteria. The study concluded that Raytheon’s vertical launch was the best design approach. According to general Army guidance for trade studies, steps in the trade study process should include such elements as incorporating stakeholders, identifying assumptions, determining criteria, identifying alternatives, and conducting comparative analyses. The APS trade study process consistently applied such methodology to all APS alternatives by using separate, independent roles for a technical team and stakeholders; operating under a set of assumptions; using validated, protected technical data on each alternative; having a screening process to filter out non- viable alternatives; and using a set of weighted criteria to assess alternatives that survived the screening process. The trade study was performed by a technical team and stakeholders— each having separate roles and operating independently from one another. The technical team provided technical input and expertise to the stakeholders, who were the voting members of the study and made the final selection. The technical team, 21 members from industry and government as shown in table 1, included individuals who were subject matter experts as well as those from organizations participating in development of the short-range APS. Raytheon had 11 members on the technical team—the most from any single organization. The Army stated that this representation included administrators and observers and occurred because Raytheon had been designated APS developer, was thus required to conduct the trade study, and could gain knowledge from attending subject matter experts. The stakeholders made the final selection. The composition and number of stakeholders are shown in table 2. The stakeholders were program leads from the Army, lead systems integrator, and subcontractors responsible for integrating the FCS manned ground vehicles. According to the Army, Raytheon’s APS program manager was included as a stakeholder because Raytheon as developer had responsibility for developing the design chosen by the trade study process. The technical team and stakeholders operated the trade study under assumptions that set parameters for screening and evaluating each alternative. These assumptions were tied to such areas as performance and threat. Additionally, they conducted the study using data that was previously validated and remained protected throughout the study’s course. The primary source of the data was the Army Research, Development, and Engineering Command’s APS database, which contained data gathered and validated by the Command’s subordinate labs. This data was protected by third parties, including the Department of Energy’s Idaho National Lab, to ensure it was not changed during the study. The technical team used initial screening processes to eliminate four alternatives and identify seven viable alternatives for further assessment. The screening process filtered out the four alternatives that could not meet one or both of two criteria: (1) ability to grow to meet 360-degree hemispherical requirements, and (2) ability to be procured within a program schedule that would meet the need for prototype delivery of a short-range solution to the current force in fiscal year 2009. The seven alternatives that survived the screening process are shown in table 3, along with the respective government organizations and industry associated with each. The technical team assessed the seven alternatives against a set of five weighted criteria. According to the Army, these were the same top-level criteria mandated in all FCS trade studies, and their weights were assigned by FCS chief engineers. Table 4 defines each of the criteria and provides information on respective weights. The vertical launch concept scored highest in every category of criteria except risk. The Army indicated that the concept had about one-third better overall weighted performance than the other alternatives. Army officials described the vertical launch design as having technical advantages over the other alternatives—including the need for less space, weight, and power—as well as cost benefits. The Army and lead systems integrator officials told us that the trade study could have resulted in the selection of a design other than Raytheon’s. They also stated that, had this occurred, Raytheon as APS developer would have been required to develop this design rather than the vertical launch. While in theory the APS source selection chose a developer and the trade study chose the design to develop, in reality it is difficult to separate the trade study results and the source selection decision. In our view, in both the source selection and trade study, criteria related to technical aspects of the designs were deciding factors. Considering that the source selection evaluation relied on artifacts representing specific systems—and Raytheon won the source selection based in large part on the technical merit of its artifact—it seems unlikely that the APS trade study would have resulted in the selection of any system other than Raytheon’s vertical launch. Although the trade study concluded that vertical launch was a high-payoff approach, it also noted that it was a high risk due to its low technology maturity. At the time of the trade study, as shown in table 5, the vertical launch was less technologically mature than the other alternatives except for one. The Army expects the design to reach TRL 6 (system model or prototype demonstration in a relevant environment) by August or September 2007. 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. These estimates appear optimistic. At a TRL 5, the vertical launch will require additional technology development and demonstration before it is ready for either application. Also, the FCS vehicles have not been fully developed yet. Assuming all goes as planned, most FCS vehicle prototypes are expected to be available in 2011 for developmental testing. As we noted in our March 2007 report, the Army has in general been accepting significant risks with immature technologies for the FCS program, coupled with compressed schedules for testing and evaluating prototypes. The Army and the lead systems integrator were both extensively involved in preparing for and conducting the APS subcontractor selection and the trade study. Prior to the selection, FCS program officials assisted in APS requirements development and reviewed and approved the scope of work, schedule, and evaluation criteria for the request for proposals. After the proposals were received, FCS program officials, technical experts from various Army research centers, representatives of the Tank-Automotive and Armaments Command and the Training and Doctrine Command were active participants in the selection evaluation team and reviewed the proposals along with the lead systems integrator members. The Source Selection Advisory Council, who advise the Source Selection Executive, provided oversight to the evaluation team and also had representatives from the FCS program manager’s office and the Army research community. 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. The co-lead of the trade study was an FCS official. The lead systems integrator’s office assumed responsibility for the selection process, was the selection executive, and made the final choice of an APS developer. In addition to its lead role in the APS subcontractor selection, the lead systems integrator was represented on the trade study technical team and was one of the stakeholders. As our previous body of work on the FCS program has shown, the Army’s participation in the APS subcontractor selection and trade study is consistent with the Army’s general approach to FCS. Army leadership set up the FCS program in such a way that it would create more competition and have more influence over the selection of suppliers below the lead systems integrator. In setting up FCS, Army leadership noted that traditionally, once the Army hired a prime contractor, that contractor would bring its own supplier chains. The Army was not very involved in the choice of the suppliers. In FCS, the Army called for the lead systems integrator to hold a competition for the next tier of contractors. The Army had veto power over these selections. In addition, the Army directed that the lead systems integrator employ integrators at lower levels in the program, for high-cost items such as sensors and active protection systems and the Army has been involved with these selections. These integrators were also to hold competitions to select suppliers for those systems. This strategy was designed to keep the first tier of contractors from bringing their own supplier chains and pushed competition and Army visibility down lower in the supplier chain. The fact that the decisions on the APS subcontractor selection and trade study lend themselves to after- the-fact examination is due in part to the Army’s focus on competition at lower supplier levels on FCS. 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. OFT officials did not agree with the Army’s position and thought the system’s success in testing indicated it should be further evaluated. To meet the Central Command’s need, OFT began an effort, the Full- Spectrum Effects Platform, to incorporate and test various improvements for potential application to existing military vehicles such as the Stryker. The platform itself is a modified Stryker vehicle. The program was divided into spirals: spiral 0 was to evaluate the synergy of the different systems, including the APS, on the vehicle and to compile lessons learned to aid in future concepts of operations, development and integration. Spiral 1 was intended to field a limited number of such systems to current forces in- theater in 2007, for purposes of an operational assessment of the various capabilities. The Full Spectrum Effects Platform is not part of or associated with FCS. OFT, in association with the Naval Surface Warfare Center, evaluated six candidate APS systems. Army representatives from the Program Manager, Close Combat Systems were also involved in this evaluation. The six candidate systems evaluated are shown in table 6. 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. They evaluated each system based on such criteria as the feasibility of the operational concept, its cost and schedule factors, as well as its weight, size, and power requirements. Trophy was selected as the most promising system because it was the most technically mature system and was being developed by Israeli defense forces that had done initial work to integrate it on a light armored vehicle. OFT subsequently sponsored tests of the Trophy APS as part of the Full- Spectrum Effects Platform at Naval Surface Warfare Center in Dahlgren, Virginia. A representative from the Army’s Program Manager, Close Combat Systems, was part of the oversight team for these tests. In these test firings, the Trophy APS did well, destroying 35 of 38 incoming rocket- propelled grenades. However, the process for deciding how to proceed based on the test results was not agreed to in advance. A disagreement subsequently arose between OFT and the Army Close Combat System officials on how best to proceed from the testing. Although the tests were not designed to represent the Trophy’s capabilities in a realistic operational environment, OFT officials concluded that Trophy showed enough promise that they recommended continued testing to demonstrate its capabilities under various conditions. These officials estimated that an additional $13 million would cover the cost for this testing. They believed that Trophy could be integrated in the near term on existing light-armored vehicles and meet the urgent need for an immediate APS capability. The Army officials disagreed with OFT’s assessment that further testing of Trophy for inclusion on the Full Spectrum Effects Platform was justified. According to the Army officials, Trophy was not tested in a realistic environment for collateral damage or effectiveness. They believed that it would not be sufficiently tested for operational and safety issues within the time period required for the first spiral of the Full Spectrum Effects Platform. A delay in its integration on the Platform would delay, by at least 6 to 14 months, demonstration of other potentially useful capabilities,that could be immediately incorporated. Further, the Army estimated that it would take 5 years to integrate and field Trophy on other current force manned ground vehicles. The Army recommended to the Joint Rapid Acquisition Cell that the Trophy APS be excluded from Spiral 1 of the Full- Spectrum Effects Platform. In lieu of putting this technology in the field, the Army recommended that slat armor be incorporated on Spiral 1, since it has been effective in defeating the current rocket-propelled grenade threat. OFT officials disagreed, reasoning that although the use of slat armor on the current force has seemed to mitigate the effects of the rocket-propelled grenades currently in use, improved munitions will soon be available, and the slat armor will no longer be effective against these threats. They believed that the Trophy should be tested further in order to answer the questions raised by the Army and to provide insight into its capabilities. OFT officials based their position on the Trophy’s success in these tests, its high level of technical maturity when compared to other active protection systems, and the criticality of the need. The Joint Rapid Acquisition Cell presented this information to Central Command and recommended slipping the active protection capability to a later platform spiral, once it was more mature. Currently, there are no plans for further evaluation of active protection for future platform spirals. Upon the removal of the Trophy APS system from the Full-Spectrum Effects Platform vehicle, the Joint Rapid Acquisition Cell discontinued funding for further testing and evaluation of the Trophy. The disagreement between Army and OFT officials notwithstanding, we did not find information that would challenge the decision to defer the introduction of the Trophy on light-armored vehicles. On the other hand, the 5 years the Army estimated would be needed to integrate the comparatively mature Trophy system on the existing Stryker vehicle does not appear consistent with its estimates that the less mature vertical launch system could be ready for prototype delivery on Strykers in 2 years and on the yet-to-be developed FCS prototypes in 3 years. 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. It was thus improbable that the trade study would reach a different conclusion. Both the Army and the lead systems integrator were closely involved throughout the source selection and trade study processes and concurred in the selection of Raytheon’s APS concept. The process for evaluating the Trophy system to meet the urgent needs of the Central Command was different. It centered more directly on the results of physical testing, followed a less-disciplined decision-making process, and was characterized by considerable disagreement between OFT and the Army. While the decision to defer the use of the Trophy on fielded vehicles appears prudent in light of the limited realism of the testing, the promising results of the testing likewise appeared to warrant additional testing of the Trophy system to either confirm or dispel potential risks in the use of APS capabilities. Discontinuing all testing of the Trophy systems may thus have been premature, particularly in light of the need to better understand tactics, techniques and procedures and concepts of operations for both near-term and long-term applications. Because of the likelihood that the Army will introduce APS into its forces, we recommend that the Secretary of Defense support additional testing and demonstration of near-term APS systems on the Full Spectrum Effects Platform or similar vehicles to, at a minimum, help develop tactics, techniques, procedures, and concepts of operations for both near-term and long-term active protection systems. DOD provided us with written comments on a draft of this report. The comments are reprinted in appendix II. DOD did not concur with our recommendation. DOD also provided technical comments, which we incorporated where appropriate. DOD did not concur with our recommendation that the Secretary of Defense support additional testing and demonstration of near-term active protection systems on the Full Spectrum Effects Platform that could respond to the Central Command’s need. It stated that the original decision in May 2006 that delayed delivering Full Spectrum Effects Platform capabilities due to technical development and performance risks remains true today. DOD added that there are no active protection systems mature enough at this time to integrate on a Full Spectrum Effects Platform regardless of any additional testing and demonstration efforts. This represents a much more decided opinion than was rendered at the time of the OFT tests. At that time, Army officials believed that the Trophy would not be sufficiently tested for operational and safety issues in time for the first spiral of the Full Spectrum Effects Platform. 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. Ultimately, the Joint Rapid Acquisition Cell recommended slipping the active protection capability to a later spiral of the Full Spectrum Effects Platform. This was the basis for our recommendation for additional testing of near-term active protection systems on the Full Spectrum Effects Platform. DOD stated that it continues to pursue active protection, citing the Army’s vertical launch system for FCS. As stated in our report, this system is technically immature and the Army’s estimates for testing it appear optimistic. According to the Institute of Defense Analysis, the vertical launch system is ambitious, with much enabling technology not yet demonstrated. Given the criticality of active protection for the FCS manned ground vehicles, additional testing of near-term active protection systems could provide valuable insights into operations and tactics that would benefit future applications, such as FCS. DOD noted that the Trophy system is being tested on the Wolf Pack Platoon Project, an OSD Rapid Reaction Technology Office (formerly OFT) effort. However, this project is not directed toward development of APS tactics, techniques, procedures, or concepts of operations. In addition, it will not include testing against live targets. Testing near-term active protection systems on the Full Spectrum Effects Platform or similar vehicles is valuable for answering remaining questions about such systems and to provide insights for the employment of future systems. This is particularly important given the likelihood that the Army will field some form of APS to its forces. We have broadened our recommendation to capture the value of continued testing of near-term APS for tactics, techniques and procedures and concepts of operations. Please contact me on (202) 512-4841 if you or your staff has any questions concerning this report. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. 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. We reviewed the APS subcontractor selection documentation, including the APS request for proposal, current force and FCS operational requirements documents, subcontract proposals, criteria used to rate those proposals, and the APS development contract to determine if procedures for avoiding organizational conflicts of interest were followed and how the APS subcontractor was selected. In addition, we held discussions with key Army officials and lead systems integrator representatives regarding this process and their roles in it. To determine why the trade study was conducted after source selection, we reviewed the trade study process and results and Army guidelines for conducting trade studies. To identify the roles played by both the Army and lead systems integrator in the selection of an APS, we reviewed documentation concerning their roles in these processes. We also reviewed these materials to determine whether consideration was given to a separate APS solution for current forces and, in conjunction with this issue, we reviewed test reports and other documentation and discussed the testing of an alternative APS system, the Trophy, with the parties involved. In evaluating the APS subcontractor selection and trade study processes, we did not attempt to determine if the best technical solution was chosen, but only if these processes followed lead systems integrator provisions for organizational conflicts of interest and used a consistent methodology for the trade study. We conducted our work between October 2006 and June 2007 in accordance with generally accepted government auditing standards. Other contributors to this report were Assistant Director William R. Graveline, Marie P. Ahearn, Beverly Breen, Tana Davis, Letisha Jenkins, Kenneth E. Patton, and Robert Swierczek.

Summary: 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. 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.