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In February 2005, less than two years after the United States overthrew Saddam Hussein’s regime in Iraq, the Marine Corps identified an urgent operational need (UON) for 1,169 armored tactical vehicles to protect troops against Improvised Explosive Devices (IEDs), rocket-propelled grenades, and small arms fire.109 _Given

the threat at the time, the initial response to this need could be satisfied with an up-armored M1114 high-mobility multi-purpose wheeled vehicle (HMMWV). However, as the threat evolved over the next eighteen months, it became clear that a more robust solution than an up-armored HMMWV was needed: by 2008, 75 percent of all casualties in Iraq and Afghanistan were due to IEDs and the quan- tity envisioned had expanded to 15,838 vehicles for the military Services.110 _{In the}

meantime, in February 2007, the Assistant Secretary of the Navy for research, de- velopment and acquisition approved MRAP as a rapid acquisition program and, in September 2007, the Under Secretary of Defense for acquisition, technology and logistics designated it a major defense acquisition program.111

While it took two years for a program to be initiated after the UON was writ- ten, once MRAP was underway it took less than nine months to produce the 1,169 vehicles initially requested. By March 2008, thirteen months after the program was initiated, nearly 7,000 vehicles had been produced, and by July 2009 the number had climbed to over 16,000.112 _{But the success of the MRAP program}

in achieving its main goal—rapid fielding to reduce IED casualties—was in large part because it was not a typical DoD acquisition program. MRAP was desig- nated a rapid acquisition program from the start; the program office was allowed to contract for multiple variants from multiple vendors in order to get vehicles to the field in quantity as quickly as possible, and the program enjoyed high-level attention and support from the outset.

MRAP’s early designation as a rapid acquisition enabled the program office to waive the normal acquisition and contracting rules and regulations.113 _This

meant that the program could proceed without the normal series of reviews and milestone approvals that are part of the DoD acquisition process (Figure 4) and could begin procuring vehicles in production quantities concurrent with testing. While this saved time, it also created a great deal of risk because it was possible

109 _{GAO, “Rapid Acquisition of Mine Resistant Ambush Protected Vehicles,” GAO-08-884R, July 15,}

2008, pp. 2, 3, at http://www.gao.gov/new.items/d08884r.pdf, accessed March 5, 2011.

110 _{GAO, “Rapid Acquisition of Mine Resistant Ambush Protected Vehicles,” pp. 1, 3.} 111 _{GAO, “Rapid Acquisition of Mine Resistant Ambush Protected Vehicles,” p. 3.}

112 _{Michael J. Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” GAO-10-155T,}

October 8, 2009, p. 1, at http://www.gao.gov/new.items/d10155t.pdf, accessed December 31, 2010.

113 _{Public Law 108-375, “The Ronald Reagan National Defense Authorization Act for Fiscal Year}

Sustaining Critical Sectors of the U.S. Defense Industrial Base 49

that testing would uncover a substantial design flaw that would render the initial vehicles produced unusable. The program office attempted to mitigate this risk by minimizing government-unique requirements and relying heavily on commercial- off-the-shelf components. In the end, some design issues were discovered during testing that necessitated design changes and post-production fixes, but none of them substantially slowed production.114

In addition to being a rapid acquisition, the MRAP program differed from tra- ditional acquisitions in that it contracted with multiple vendors to build differ- ent designs of several variants of the vehicle simultaneously. Nine vendors were initially awarded indefinite delivery, indefinite quantity contracts to produce ve- hicles. Ultimately, five vendors received the bulk of the orders, including one com- pany that was new to mass vehicle production for the military. The program office ordered three different variants of the MRAP, known as Category I, II and III vehicles, from each of the vendors. Mission-essential equipment for the vehicles, such as radios and sensors, were provided separately as government-furnished equipment. Together, these factors led to a high degree of complexity in vehicle integration: the designs of each variant produced by each vendor differed, and the mission equipment installed on them differed by the Service or command re- ceiving the vehicle. Ultimately, this meant that twenty-seven different major con- figurations of MRAPs were being fielded simultaneously.115 _{Nevertheless, MRAP}

did not pose technological or engineering challenges comparable to those of the JSF or other advanced technology MDAPs.

The MRAP program also differed from traditional acquisitions in that it gar- nered a significant degree of high-level attention and oversight. In May 2007, Secretary Gates named the MRAP as DoD’s “single most important acquisition program.”116 _{He also used the powers of the Defense Production Act to give the}

MRAP program a DX rating, which meant that contracts had to be “accepted and performed on a priority basis over other contracts without this rating.”117

The Secretary of the Army also waived restrictions to expand the countries from which armor plate steel could be sourced.118 _{Lastly, the program received a high}

level of attention in Congress, which held numerous hearings and gave the pro- gram quick funding through the supplemental appropriations process.

The MRAP case study provides several valuable lessons in managing the industrial base. First, DoD was able to rapidly ramp up production of a new vehicle and expand its industrial capacity within months because it was will- ing to relax military-unique requirements and allow companies to use more

114 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” pp. 10–11.} 115 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” pp. 5–8.} 116 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” p. 1.} 117 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” p. 4.} 118 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” p. 4.}

50 center for strategic and Budgetary Assessments

commercial-off-the-shelf components. DoD was also willing to make direct in- vestments in key areas of industry, such as steel and tire production, to prevent bottlenecks from occurring. As a result, the total cost of the program is now over $36 billion for nearly 22,882 vehicles, or an average cost of $1.59 million per vehicle (in FY 2011 dollars).119 _{The MRAP example shows that acquisitions can}

be quick if requirements are relaxed and significant funding is available. But it should also be noted that MRAP vehicles have considerable commonality with the commercial trucks and construction equipment. Hence the industrial capac- ity that would normally have been used for commercial products could be quickly redirected to military production. This ability to rapidly ramp up production is not found in many other areas of the defense industrial base such as nuclear submarines or fifth-generation fighters.

The other instructive lesson from the MRAP case study is DoD’s role as sys- tems integrator. Because each vendor was allowed to use their own designs and their own off-the-shelf components, more companies were able to enter the com- petition. It also sped up deliveries to the fielded forces because companies did not have to retool or redesign as much as they would have if DoD had selected a single design for all vendors to build. The decision to use multiple designs from multiple vendors greatly increased integration complexity and risk, but in the end this added complexity did not prove insurmountable. Perhaps the most impressive success of the MRAP story is that DoD managed this integration challenge on its own using government personnel and facilities at the Space and Naval Warfare Center (SPAWAR) in Charleston, South Carolina. Twenty-five integration lines were established with a projected capability of integrating one thousand vehicles per month—a figure that was exceeded in April 2008 when 1,157 vehicles were successfully integrated.120

119 _{DoD, “Selected Acquisition Report (SAR) Summary Tables, As of Date: June 30, 2010,” August}

12, 2010, p. 4. In the case of MRAP, SAR data do not provide the desired resolution on unit costs. Because there are three classes of MRAP vehicles, and because each one is significantly different, one would prefer to see the average unit price for each of the classes. Available SAR data do not provide this level of detail.

120 _{Sullivan, “Defense Acquisitions: Rapid Acquisition of MRAP Vehicles,” p. 8.}

Perhaps the most