At a projected cost of $15.7 billion, the FMTV program is one of the Army’s largest acquisition programs. From fiscal year 1991 through fiscal year 2022—a 32-year period—the Army plans to purchase 85,488 FMTV trucks to replace its aging medium truck fleet. Under the program, the Army will purchase a family of 2.5- and 5-ton trucks based on a common truck cab and chassis. The 2.5-ton trucks, called light medium tactical vehicles, consist of cargo and van variants and a 2.5-ton trailer. The 5-ton trucks, called medium tactical vehicles, consist of seven variants—cargo, long wheel base cargo, dump, fuel tanker, tractor, van, and wrecker—and a 5-ton trailer. The FMTV acquisition strategy has two phases—prototype and production. In the prototype phase, three companies were awarded contracts to develop and produce prototype trucks for evaluation and testing. The contracts were awarded on October 21, 1988, and the prototypes were tested from January to December 1990. On October 11, 1991, the Army awarded the winning contractor—Stewart & Stevenson Services, Inc., Houston, Texas—a $1.2 billion, 5-year fixed-price production contract for the first 10,843 FMTV trucks. The contract contained options for additional trucks. The fifth year of the contract was subsequently restructured and the contract was extended 2 years. Stewart & Stevenson completed production under the contract in November 1998. The initial production contract does not include the 5-ton fuel tanker, 5-ton van, and both trailers. These vehicles will be included in future production contracts. In our November 1998 report, we found that the Army had not (1) instituted safeguards to ensure that existing production problems did not occur in follow-on production contracts and (2) performed a cost and benefit analysis of its plan to develop a second source for the trucks or compared its plan with other alternatives. We recommended that the Army include safeguards in follow-on production contracts so that it does not repeat errors and does perform a cost and benefit analysis of its second source plans before continuing with them. The Army did not execute a low-risk acquisition strategy. To reduce the time to develop and field FMTV trucks, the Army streamlined its acquisition strategy. Rather than a lengthy development phase, the Army decided to conduct a prototype competition and use the results as part of the evaluation of proposals for a production contract. The Army believed this strategy would be low-risk partly because the contractors participating in the prototype competition were experienced in producing military trucks or affiliated with an experienced truck producer. However, the Army did not include experience or affiliation with an experienced truck producer as a requirement in the production contract solicitation and subsequently awarded the FMTV multiyear production contract to a contractor that was neither experienced in truck production nor affiliated with an experienced truck producer. The contractor had been affiliated with an experienced truck producer during the prototype phase but did not maintain its affiliation. Further, the contract contained an aggressive production schedule that did not take into account the contractor’s inexperience. The inexperienced contractor had problems establishing a production line and producing trucks that met testing requirements. These problems resulted in substantial delays in delivering the trucks. In response to the schedule delays, the Army and contractor agreed to accelerate truck production during testing even though the trucks were not meeting test requirements. The Army used a streamlined acquisition strategy to reduce the time required to develop and field FMTV trucks. The reduction in time was to be achieved by combining the demonstration and validation phase and the engineering and manufacturing development phase into a single prototype competition phase and by conducting concurrent tests. The Army believed its streamlined acquisition strategy was achievable and low risk because (1) FMTV trucks would be designed using state-of-the-art commercial components that did not push the manufacturing and production process beyond the current capability of truck manufacturers, (2) FMTV truck configurations would be established and subjected to prototype testing prior to the production contract award, and (3) contractors participating in the prototype competition either had produced military trucks in the past or were affiliated with an experienced military truck producer. The production contract solicitation did not require the contractor to be experienced in truck production or affiliated with an experienced truck producer. The Army awarded the production contract to Stewart & Stevenson, which was not experienced in manufacturing trucks. Stewart & Stevenson was a distribution and service company for various products and was experienced in producing gas turbine generators and aircraft ground support equipment. Nevertheless, the production contract called for the delivery of the first FMTV trucks for testing within 11 months of award and the Army planned to have enough trucks to fully equip its first unit with FMTV trucks by October 1993—about 24 months after contract award. During the prototype competition phase of the program, Stewart & Stevenson was affiliated with an experienced military truck producer (Steyr-Daimler-Puch, AG. of Austria). Stewart & Stevenson subcontracted with Steyr to design and develop FMTV prototypes based on the design of a truck Steyr produced for the Austrian army. Steyr designed and built the FMTV prototypes in Austria, supported the FMTV prototype testing, and delivered an FMTV technical data package. According to a Stewart & Stevenson official, Steyr completed its subcontract work before Stewart & Stevenson submitted its production proposal and was not included in the production phase of the program. When the Army issued the solicitation for the production contract, it established a source selection board, which evaluated the proposals of the three competing contractors. The Army gave highest consideration to the technical and cost factors of the proposals. Stewart & Stevenson was selected because its proposal offered the best value for meeting the Army’s overall requirements and receives the highest score for the technical factor and was the lowest cost. The board considered the government’s previous experience with the prototype contractors as part of the Army’s overall production readiness evaluation. This evaluation noted that Stewart & Stevenson (1) had no prior experience in high volume production of combat or tactical vehicles, (2) needed to convert European engineering drawings to U.S. specifications and standards, and (3) had unsatisfactory delivery performance on past low dollar purchase orders. The contractor, which was inexperienced in truck production, had difficulties in both establishing a production line and producing trucks that would pass test requirements. To acquire FMTV truck production capability, Stewart & Stevenson purchased a plant from an oil-drilling equipment manufacturer, configured the plant for truck production, and established a tactical truck division. According to Defense officials, Stewart & Stevenson immediately experienced problems in producing trucks that were capable of meeting FMTV requirements. For example, the FMTV data package provided by Steyr was in German and used metric measurements. Stewart & Stevenson did not accurately translate the instructions or convert the measurements. Production disruptions occurred when instructions did not work as intended and when subcontractor parts, produced using drawings furnished by the contractor, did not fit. As a result, the contractor was late in delivering trucks for testing. The contract required the contractor to deliver a minimum of 85 trucks by October 1992 for production qualification testing, initial operational testing, and technical manual verification. The contractor delivered its first truck in March 1993 and did not deliver 85 trucks until March 1994. As a result, the start of the production qualification and operational testing was delayed. The contractor took much longer than expected to deliver trucks capable of passing production qualification and operational tests. Production qualification testing was originally scheduled to be completed in August 1993; the test was not completed until December 1994. The test was designed to determine whether the FMTV truck variants fulfilled the Army’s technical performance and reliability, availability, and maintainability requirements. The trucks failed the test because they did not meet reliability and some performance requirements. The Army identified over 90 problems that the contractor was required to correct. Initial operational testing was originally scheduled to be completed in June 1993. However, because of production problems, the Army did not begin operational testing until October 1993. The test was designed to determine whether and to what degree the FMTV truck variants could accomplish missions when operated and maintained by soldiers in the expected operational environment. The test was suspended in December 1993 because the trucks did not meet operational reliability, availability, and maintainability requirements. In August 1994, the Army started a second operational test, but in September 1994, the test was suspended because test personnel were deployed on a peacekeeping mission in Haiti. However, according to Army test assessment officials, the test was about to be suspended because the trucks were not meeting reliability requirements. In February 1995, the Army started a second production qualification test of newly produced trucks that incorporated changes to address problems identified during earlier testing. Operational testing of the new trucks began in April 1995. The Army completed both tests in June 1995. The trucks were assessed as having met the FMTV requirements in both tests. However, because of difficulties in producing trucks that passed the tests, the contractor did not receive approval to begin full-rate production until August 1995, 23 months later than planned, and the first unit was not equipped with FMTV trucks until January 1996, 2 years and 3 months later than planned. According to a project official, the Army believed that increasing monthly delivery quantities during testing would allow the contractor to catch up on its scheduled deliveries. The production contract allowed the contractor to deliver up to 150 trucks a month until the testing phase was completed. The Army modified the contract to increase the monthly delivery limit to 200 trucks. Because the higher monthly delivery limit exceeded the contractor’s production capability, the contractor was able to produce as many trucks as it could. The trucks that were produced could not meet FMTV technical and operational requirements. By the time the production qualification and operational tests were successfully completed in June 1995, the contractor had produced about 3,000 trucks, all needing varying levels of work to conform to the specifications of those that had passed testing.