BAE Systems wins $1.

2 billion contract to build new carriers

for U.S. Army

A contentious battle over a $1.2 billion federal contract between two premier defense contractors
with locations just two miles apart in Sterling Heights produced a victory contractor london for BAE
Systems.
BAE bested General Dynamics Land Systems in a bidding competition to build a new generation of
small, armored personnel carriers for the U.S. Army. Most of the work will be split between BAE
sites in Sterling Heights and York, Penn.
The Pentagon announced last week that the 52-month term of the contract, worth about $383
million, will call on BAE to produce an initial batch of 29 vehicles with five variations that reflect
various combat roles -- a troop transport, two types of armored ambulance, a mobile command post
and a mortar carrier.
Advertisement
An option in the contract to follow with 289 more vehicles, for a total contract value of $1.2 billion,
marks the second phase.
According to BAE officials, it's unclear how many jobs might be created locally, other than 15 to 20
contractor jobs. The Macomb County operations for GD and BAE -- two of the largest defense
contractors in the world -- consist mostly of research and development programs - engineers and
designers who create prototypes of vehicles.
Elizabeth Lupfer, a spokesman for BAE, a wide-ranging corporation based in London, said the AMPV
work will be divided among three locations. In the first phase, the engineering work will be based in
Sterling Heights, with some assistance from the company's Santa Clara, Calif. facility. The second
phase will see vehicle production and subcontracting run out of BAE's York, Penn. manufacturing
site.
The highly regarded BAE-built Bradley Fighting Vehicle seems to have emerged as a trump card in
this standoff between two defense industry giants which reside within close proximity of each other
in Macomb County's defense corridor.
What's more, the experts at the Army Tank-Automotive Command, or TACOM, located in Warren less
than six miles from these feuding defense contractors, is home to the Army Materiel Command that
largely decided which company presented a more worthy candidate to replace a fleet of 3,000
armored vehicles that date back to the Vietnam war.
General Dynamics Land Systems headquarters is located near 17 Mile Road and Mound; BAE's new
facility was built on Van Dyke just south of 15 Mile; and the TACOM complex, also known as the
Detroit Arsenal, is on Van Dyke just south of 12 Mile.
After years of planning, the Army seeks to replace aging, lightly armored M113 vehicles with a new
high-tech, heavily armored battlefield rover known as the Armored Multi-Purpose Vehicle, or AMPV.

"The AMPV will provide a substantial upgrade over the Army's current personnel carrier fleet,
increasing the service's survivability, force protection, and mobility while providing for future
growth potential. It also confirms BAE Systems' role as a leading provider of combat vehicles," said
Mark Signorelli, BAE vice president of combat vehicles.
The key question for TACOM was this: Are heavily fortified vehicles powered by tracks, like a tank,
or those that feature multiple wheels, like General Dynamic's Stryker, better able to assist armored
divisions in combat that are led by M1A2 tanks?
Those Abrams tanks have been produced and upgraded by GD for decades. But the combat teams
that accompany those tanks on the battlefield are led by Bradleys designed and manufactured by
BAE.
The Pentagon apparently chose tracks over tires but BAE's capture of these first two rounds of work
on a new generation of tank-like vehicles does not guarantee that the company will oversee the
entire 13-year project, with an estimated overall price tag of more than $6 billion, including
programming costs.
Critics said the wheeled Stryker cannot keep up with Army tanks and Bradleys in rough, off-road
terrain. They argued the AMPV, which represents a long-term investment in a new tactical vehicle,
should be ready for anything in battle.
The 2-year fight between BAE and GD to win the contract included an appeal of a key Army decision
during the bidding process, the threat of a lawsuit, and claims of undue political gamesmanship on
Capitol Hill to steer the bidding process.
Last spring, 10 members of Congress, including Rep. Candice Miller, a Harrison Township
Republican, proposed an unconventional solution when they urged the Pentagon to create "mixed
fleet" and split the contract award between GD and BAE.
When BAE was declared the victor, Miller, whose congressional district includes both defense
contractors, applauded BAE's good fortune.
"I congratulate BAE Systems. This is a major and well-deserved win for them, as well as the U.S.
Army, that will undoubtedly improve the mobility and safety of our service men and women in
combat," Miller said. "This contract also underscores BAE's proven track record and capability in
defense manufacturing, which helps make southeast Michigan the heartland of American
innovation."