Army Medium Trucks:

Information on Delivery Delays and Corrosion Problems

NSIAD-99-26: Published: Jan 13, 1999. Publicly Released: Feb 16, 1999.

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Louis J. Rodrigues
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Pursuant to a congressional request, GAO reviewed the Army's Family of Medium Tactical Vehicles (FMTV) program, focusing on: (1) the causes and effects of the contractor's delays in delivering acceptable trucks; and (2) the Army's actions to mitigate corrosion problems on FMTV trucks.

GAO noted that: (1) a combination of factors caused lengthy delays in delivering FMTV trucks; (2) the Army did not execute a low-risk acquisition strategy; (3) the contract contained an aggressive schedule for truck production considering the contractor's inexperience; (4) the inexperienced contractor had difficulty in both establishing a production line and producing trucks that could meet qualification and operational testing requirements; (5) despite the difficulties, the Army allowed production to continue and increase during testing; (6) as a result, many trucks were produced that required modification or repair; (7) because of production problems and competing funding requirements, the Army decided in 1994 to terminate the final year of the original 5-year FMTV production contract; (8) the Army requested only enough funding for fiscal year 1996 to terminate the program; (9) Congress, not wanting a break in the program, provided additional funding for that year, but not enough to fully fund the production quantities called for in the contract; (10) the Army and the contractor agreed to extend the contract and spread the final year's quantities over 3 years; (11) the Army determined that the first 4,955 trucks produced did not meet the FMTV's corrosion protection requirements; (12) corrosion was found on the cabs of trucks less than 3 years old that were still awaiting modification at the contractor's plant; (13) rather than making the contractor replace all the 4,955 truck cabs at a cost of $31 million, the Army accepted the contractor's proposal to repair the corrosion damage and to provide a 10-year warranty, not to exceed $10 million, against any future corrosion; (14) the Army also subjected one of the 4,955 trucks to a contract-specified corrosion test; (15) it failed with corrosion being detected in 60 areas; (16) following these events, the Army and the contractor agreed on modified production procedures to address the corrosion problem on subsequently produced trucks; (17) however, the Army and the contractor ultimately concluded that galvanized steel cabs may be required to meet the 10-year corrosion prevention requirement and the contract was modified to require galvanized steel cabs; (18) the contract's final 3,751 trucks were produced with galvanized steel cabs; (19) the Army agreed to pay up to $7 million for the galvanized steel cabs and other corrosion improvements; and (20) the Army did not test or require the contractor to provide a corrosion warranty on the 2,491 trucks produced prior to the switch to galvanized steel cabs.

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