DoD News Briefing

DoD News Briefing
Lt. Gen. Paul J. Kern, USA
Friday, November 17, 2000

(Special briefing on the Army interim armored vehicle program by Army Lt. Gen. Paul J. Kern, military deputy assistant secretary of the Army for Acquisition, Logistics, and Technology. Also participating were Army Maj. Gen. Larry D. Gottardi, chief of Army Public Affairs, and Paul Hoeper, Army acquisition executive and the assistant secretary of the Army for Acquisition, Logistics and Technology.)

Gottardi: Ladies and gentlemen, good morning. I am Major General Larry Gottardi, the chief of Army Public Affairs - the new chief of Army Public Affairs. Some of you I know and some of you I don't know. Those of you who I don't know, I will stick around after this is over to get a chance to introduce myself to you. We've been somewhat remiss in having the, sort of, the reception; we should have done that.

I'd like to introduce Mr. Paul Hoeper who is the Army acquisition executive and the assistant secretary of the Army for Acquisition, Logistics and Technology. Sir?

Hoeper: My loyal staff back there is applauding, and they don't understand that we don't necessarily applaud at press conferences.

This is a terrifically exciting day, and a day that really starts the material part of the Army's transformation off on a wonderful note. Two and a half years ago I took up my duties and I said then that my job would be to make sure that soldiers at all times would have the equipment and supplies they need to get to the fight quickly, win decisively, and come back alive. And we are today announcing the award of the Interim Armored Vehicle, a vehicle that will give our soldiers just the capabilities I talked about.

In an award like this, where there's been a very good competition, there is often a lot of talk about winners and losers. The winner I want you to pay attention to is the American soldier, who is a tremendous winner by being given the best off-the-shelf equipment available in the world in this class.
I'd like now to introduce my deputy, Paul Kern, who will give you a detailed breakdown of this.

Kern: In 1979 I was assigned to Detroit, Michigan, for my first job in acquisition. That was to the Bradley program office. My job was to prepare, in my view, the bureaucracy for the acquisition of the Bradleys in 1980, and by then we had a law that said, "Do that by 1980." To my knowledge, that is the last time that the United States Army bought a new ground combat vehicle. And so today, as Page (sic) Hoeper suggested, it's an exciting day for the Army that we have the opportunity to announce a contract award for the 21st century for the Army's transformation to a new capability for our forces, and that award was to the GM/GDLS [General Motors/General Dynamics Land Systems] Limited Liability Corporation and the LAV-3 [Light Armored Vehicle].

I want to talk to you this morning about this vehicle and its capabilities and why, as our assistant secretary pointed out to you, this is such a great win for the American soldier.

I will not discuss source selection. You probably would all like to go into that part of the process, but that is protected by the federal acquisition regulations, so we will not go into that part of it, other than to tell you that this has been a very exciting time for the United States Army, from a concept which emerged last fall at the AUSA [Association of the United States Army] meeting, when the Army leadership announced that we would be moving to a new 21st century Army and set the transformation process under way.

That led to a platform performance demonstration shortly thereafter at Fort Knox and, from that platform performance demonstration, to the release of a request for a proposal, the receipt of those proposals last spring, and a very, very thorough review of all of those proposals by a source selection evaluation board, as the Army prepares itself to make that acquisition.

And that process ended a little while ago, and then we completed that process by having the review at the Defense acquisition executive, Dr. Gansler, since this is an OSD program - in our vernacular that's an acquisition category 1-Delta, 1-D - and so he has the final authority, which - yesterday he gave us the permission to go ahead with our selection. And so that contract was awarded last evening, and we are now under way to transform the Army for the 21st century.

That is, as I said, and to the best of my knowledge, the first new vehicle that the United States Army has acquired for our ground combat systems since the Bradley.

If you look around the Army today, the Abrams tanks are the world's greatest armor, but they are rebuilt of tanks which were previously acquired by the Army.

The same is true of the Bradley, the Paladin, the Apache helicopters. This is a brand-new acquisition for the United States Army, and it sets us on a path to change the organization and the culture of the Army for the 21st century as well as providing us with new equipment.

[Slides used during this briefing are available on line at http://www.defenselink.mil/news/Nov2000/g001117-D-0000C.html ]

I'd like to hit a couple of the high points about this vehicle. And I'd start with the bottom left: 14.5 millimeter armor-piercing all-around protection; and that's as this vehicle rolls of the ramp of a C-130. One of the criteria is that it's C-130 transportable, so these vehicles are all capable of being transported on a C-130. And I said vehicles because I will describe to you shortly that we were acquiring not a single system, but a capability for a brigade combat team; a family of vehicles that were designed to fight together. And that was one of the characteristics which we are looking for in this acquisition was the commonality across all of those platforms to achieve that fighting capability. But that 14.5 protection coming off the ramp far exceeded what we had requested and gives our soldiers a survivability edge as they roll off a C-130. That's all-around protection as well, so that's overhead, not just the sides and front glacis.

Secondly: 60 miles-an-hour sustained speeds. If you go back and review what the Army has been studying for the past 10 years or so which were often captured under the Army After Next studies that were done previously, you may remember that the publication was titled, "Speed and Power." And so there are aspects of speed which we believe will be critical to the future battlefield. And that speed is in two senses. One, it's the strategic deployability - getting to the battlefield, and hence the C-130 deployability - and secondly, it's the tactical mobility on the battlefield, and that is the 60 mile-per- hour speed which this family of vehicles provides to us.

When you look at that top speed in terms of what it means in tactical operations where you're moving by tactical convoys and in formations, that allows you to move at much higher speeds than we are currently. An example would be, most military operations today that convoy from point A to point B have limitations of about 25 miles per hour with then a catch-up speed of five miles an hour faster than that.

This vehicle will allow us to move at convoy speeds very safely at 40 miles an hour with higher catch-up speeds. And since all the vehicles possess the same characteristics, whether it's cross-country or on highway, they move as a fighting unit, a brigade combat team, and are able to fight and arrive at whatever mission that they are assigned together and retain that cohesiveness.

A third critical aspect that's contained in this is the low sustainment cost, the self-recovery, parts commonality. It's a desire that we have had to achieve a reduced logistics footprint. And that footprint is not just the size of the vehicle that you take into the battlefield, but it includes the fuel, the ammunition, the parts, the people, the recovery systems that are required to maintain that. This vehicle is self-recoverable. It has a very high inherent reliability. And it gives us the capability to significantly reduce our footprint as we see it today. And that's a big step forward to giving ourselves that ability to have sustainment.

There is a requirement for this vehicle to come off the ramps of those C-130s or out of a port on a ship or however they arrive in the operation to go 72 hours without external support, and these systems should be able to do that.

So this is taking us on the road to what you've seen as the objective force requirements of getting a brigade there in 96 hours, reduced logistics footprints, the agility, the survivability that we're seeking. It is not the final answer, by a long shot.

You will often hear the debate of track versus wheels. I would suggest to you that debate is still open. This is an off-the-shelf procurement today of what we see as the best capability for mobility with wheel vehicle. I mentioned to you its highway speeds. It also has a central tire inflation system, which from inside the vehicle allows us to change the tire pressure to allow for different flotation of those tires against different cross-country mobility. So that capability then allows us to adjust, whether you're running on a hard- surfaced road or a soft sand and mud.

And so, from a wheel vehicle perception - perspective, that is a significant new capability for us.

The capability also to operate remotely our weapons station is a capability which increases the survivability of our soldiers. And while you don't see a turret on that vehicle, what you see is our ability to mount a 50-caliber machine gun or a M-19 grenade launcher, but operate it from inside the vehicle, remotely, and so the soldiers do not have to expose themselves to fire.

The command and control communications provides us the joint interoperability, and it will be performed through the system which we call today FBCB-2, the Force 21 Battle Command Brigade and below system, which has been undergoing testing at Fort Hood for the past few years. And if you've been following it, we just completed a test with the Bradley and Abrams, with that latest of that equipment, which was very successful. So we are achieving the interoperability both internally, within our own systems providing that situation awareness, and externally, through the global command and control system, to the joint world.

Fuel economy. We all have noticed that fuel prices have gone up, becomes a scarcity, and that becomes a driver into our operational support cost. This vehicle has very superior fuel economy to anything that we have today. So the operating and support costs are going to be driven lower and gives us an edge, then, in our ability to continue training, as well as operating at reduced costs.

Maintainability. As I mentioned, I think it has a very high inherent reliability. It's in the contract that we have awarded that they have to achieve that.
And so all round, this vehicle gives us the characteristics of - for our soldiers of arriving at a battlefield with a survivable platform, being able to move at high speeds through the theaters of operation, being able to fight under cover, and being able operate with a reduced logistic footprint - all goals that we are achieving and all goals that the request for proposal asked all of our of competitors to maximize their ability for the Army. And so we are very happy to see these results and that they have done that.

As I mentioned, we aren't buying a single vehicle; we're buying a capability, a platform.

So it's a series of vehicles. It comes in two basic configurations of our vehicle: The mobile gun system and the infantry carrier vehicle - the IAV.
All of these other variants here are built on this derivative vehicle. And the chassis here for the mobile gun system is also common to that. So, from an automotive standpoint, they all have a common set of characteristics. Within that capability you also see that the variants have different capabilities that we apply, and I'll show you how that's organized in a company team shortly.

The basic system in the organization is built around infantry. And so the infantry carrier vehicle is the basic system that we have. A reconnaissance vehicle provides the capability for long-range reconnaissance and it has the LRAS-3 [Long Range Advanced Scout Surveillance System] which is a second-generation of FLIR forward-looking infrared system that we use in our current platforms. It is just being produced right now and will be incorporated into that vehicle.

The mortar carrier will incorporate everywhere from 60 to 120 millimeter mortar capability, depending upon where you are in the level of the organization. So it has inherently a capability to provide its own fire support within that organization.

The command vehicle is the central piece of where the commanders will operate from, providing them protection mobility. But the key command and control characteristics through our network system of FBCB-2 as well as the direct communications.

The fire support vehicle allows us to connect to our fire support systems external to the organization; that's our artillery systems and back to other joint capabilities, whether they be Air Force or Navy or Marine Corps. And so it provides that connectivity.

As I get to this point I will mention that three of these vehicles, and I'll start with this one - the fire support vehicle. We'll start with the development phase. The others we'll go straight into their production phases. The three that require development are the fire support vehicle, the NBC [Nuclear, Biological and Chemical] reconnaissance vehicle, and the mobile gun system. Of the three, and I'll spend a little bit more time at the mobile gun system. It will take the longest as it is the closest to a full development.

The fire support vehicle will incorporate those fire support elements which are currently on our - the systems that we call that we call Striker and Bradley FSTV [Fire Support Team Vehicle].

And we will integrate them into the LAV-3 to create our fire-support vehicle. That provides us laser designation to targets, as well as the command and control systems to be able to conduct those fires.

The NBC reconnaissance vehicle is the other vehicle which I said requires some development. We'll take the package which today is incorporated in our Fox, which is our reconnaissance vehicle today but that is not C-130 transportable. And so we will take the sensor packages and that capability and also integrate that into the LAV-3. But we are classifying that as a development program.

And then finally the mobile gun system, which is a 105 millimeter cannon. That's the same cannon that's on an M-1, not an [M-1]A-1, but the older M-1 tanks with the 105 cannon produced up in Watervliet Arsenal in New York. So that is an identical cannon that we have already produced.

So those are the three variants - the fire-support vehicle, the NBC reconnaissance and the mobile gun system - that require development.

Let's talk about the other vehicles. The engineer squad vehicle allows us to incorporate plows and rollers onto the LAV-3. It is not in the class of the Grizzly program which we cancelled. It is on a much lighter chassis. And so its capabilities will be limited to providing the clearing for this type of an organization in the 20-ton class of vehicles as opposed to the larger, heavier vehicles.

The medical evacuation vehicles and ambulance. The anti-tank guided missile takes what is our current generation of TOWs [Tube-launched, Optically-tracked, Wire-guided], the ITAS [Improved Target Acquisition System], and provides that integrated into the LAV chassis. That capability is proving itself very well out in the field today. And importantly, because this is going to be the longest development effort we have there, we will use this vehicle in lieu of this one until we are ready to bring the mobile gun system into full production.

Q: When will that be?

Kern: In about two years we expect the development effort to end.

We are going to be taking the anti-tank guided missile system, which is designed as an anti-tank system, and giving it a capability which the mobile gun was required to have of being able to defeat bunkers by modifying a TOW round, and we will do that in government facilities in Anniston, Alabama. We've already demonstrated the capability to blast a hole that a person can crawl through, nominally, a 24-inch diameter hole through reinforced concrete bunkers.

And so we will do that in the interim.

It does not provide us the full capability, though, to support infantry assaults that the mobile gun system will, and so it will only be used in lieu of this system coming on line.

And then I mentioned the NBC reconnaissance vehicle will be part of the development effort.

So those are the 10 variants and configurations of the IAV family. The commonality across those systems, with the exception of the gun system, is about 85 percent.

It also is worth noting that the engine to this is common to our family of medium tactical vehicles, the FMTV, produced by Stewart & Stevenson down in Texas. And so we have that piece in common as well.

If you look at the entire brigade combat team organization, then, you will - you see that they are all in wheel vehicles. We will have Humvees as part of our organization, we will have the IAV family of vehicles built on the LAV-3 chassis, and then we will have our heavier trucks. But they are all wheel vehicles.

That also helps us reduce this logistics footprint, one, because of the fact that they have common parts across them, but also because of the fact that we have a common support structure, with reduced parts requirements.

If you look at an Army organization today, in our maintenance sections, we have track vehicle mechanics and wheel vehicle mechanics. And by going to an all-wheel configuration, all of the mechanics will be wheel vehicle. And so we have fewer demands on our training base, fewer demands on the number of parts that we have to stock, and again, this focuses on our goals of reducing the logistics requirements for the United States Army.
And so our family of vehicles, with its variants and configurations, is that step on our way to transformation.

I'm not going to walk you through the entire brigade combat team, but the basic fighting organization of this unit is the interim armored vehicle company. It consists of three platoons of four vehicles each. That's of the infantry armored vehicle variant. Those have each nine infantrymen, and they have a two-man crew on board, so 11 people total. But that is the basic fighting unit, a very infantry-focused organization.

All those fighting units are also equipped with the Javelin anti-tank weapons platform, which gives them a very lethal anti-tank capability, a fire-and-forget system which is proving itself worldwide as an extremely effective system.

The mobile gun system platoon consists of three mobile guns. That capability then gives us support for the infantry in the assault, the ability to breach reinforced concrete, as I described. And our focus here is not anti-tank. This is not a tank replacement. It is a mobile gun system which gives us direct fire capability to support the infantry elements - the mortar section of two vehicles each with their mortars, the headquarters with the commander's vehicles, and the fire support team.

And a very key part of this is that in our description of our organizations, this is a combined arms team. And for the first time in a long time in Army organizations, equipping it this way gives us the ability to create a combined arms team at the company level. Normally, to achieve that in the current Army organizations, you have to build task forces by bringing together different battalion organizations who do not normally operate together.
We believe this is a significant step on the way to building the objective force. This is not, clearly, the objective force, but by allowing the young company commanders today to be in the position of commanding, organizing and fighting these combined arms teams, they grow in the capability to lead our organizations of the future. And so this brings the different military occupation specialties together of infantrymen, artillerymen, mortarmen and our armored force and our reconnaissance groups into one organization.

And so that is a part of the process that's also ongoing in the building of this effort out at Fort Lewis, so if you've had the opportunity to talk with Major General Jim Dubik in his year that he's spent out there training and equipping and developing the organization and tactics for this organization, that's part of what this is all about, is building that capability. He has since been replaced by Brigadier General Paul Eaton, who is out there continuing in that footsteps now, and he will take that continued development of this doctrine and organization to the next level.
A lot of hard, intense training goes on today with this organization, with those infantry crews. Those are tough, young infantry soldiers. If you go out there and watch their training, it's as rigorous as any infantry training that you will find and very, very demanding, high standards for those soldiers.
They also have, inherent in those infantry squads, the anti-tank capability, and organic to that company now, their own fire support through their mortars, and then externally through their fire support vehicle. So you're building a capability of high-speed maneuver, of getting to a battlefield in a coherent fighting unit that can stay together and fight together and also, because it's moving in with wheeled vehicles in this configuration, also provides you somewhat of a more stealthy platform and organization than we have today because these are quiet vehicles in operation. So that capability is also being trained in design.

The other key point about this organization is that the United States Army today was organized and equipped around fighting the Soviets in Central Europe. The world is changing; we recognize that. So we've looked at the missions that this type of an organization is going to have to perform and they will be required to fight in urban terrain. And so we are looking at a series of exercises, working often with the Marine Corps on how we are going to change to be able to focus our fights within urban terrain. A lot of the design characteristics of this organization and a lot of the training that's going on now are taking into account your ability to do that. For example, the ability to fire those weapons remotely well under cover so that while they're in a built-up area, soldiers do not have to get out and expose themselves if people are in sniper positions above them. And again, a very infantry-focused organization so that the soldiers do not fight from these vehicles; an inherent characteristic of it. They are supported by the vehicles, but the basic fighting is done from the dismounted infantry.

The last thing I'd like to go over with you is how this organization is put together and where they are across the country. The parent organization is a limited liability company of General Motors and General Dynamics, located in Sterling Heights, Michigan. This brings to the Army, not only new capabilities for our soldiers and a new culture for us to learn, but also brings a new player into the industrial capability for us with General Motors. General Motors had been a player in our defense industrial for the Army some years ago; has not been for many years, and so this gives us an additional industrial base capability as we expand for the future.

The vehicle is produced, as the Marine vehicle is, in London, Ontario. The LAVs are produced up there, as part of the GM organization.
And that will also be the final assembly for the GM pieces.

The other major assembly and about a quarter of the work will be focused in Anniston, Alabama, and that's where General Dynamics will do a lot of their final assembly of their configurations of the vehicles.

And so those are our two final assembly areas.

We will also be using the General Dynamics Land System's facilities in Lima, Ohio, to do the upper structure in the turrets for the mobile gun system. And General Dynamics' main headquarters in Sterling, Michigan, will do the engineering work, which is also the corporate headquarters of this new organization.

As I mentioned to you, the engine is a Caterpillar engine, which is common to the family of medium tactical vehicles. The NBC reconnaissance system is done by CACI here in Virginia. Allison will do the transmissions. The auto-loader comes from Ohio, from Aries. I mentioned earlier that the tank cannon is - will be produced up in Watervliet.

The striker package, which I mentioned - a striker is the capability which is currently an inherent vehicle by itself, which will be incorporated into the LAV chassis, Rockwell doing GPS [Global Positioning System].

TRW was chosen by the contractors to be the integrator for the Force 21 Command and Control System. And the fire suppressant system was Santa Barbara Research.

Raytheon in Texas does the long-range advance scout surveillance system, the LRAS-3, as well as the ITAS and the driver's viewer.

And that's a big picture.

There are a lot of other subcontractors that will be providing government-furnished equipment at different levels as part of this organization, that comes into it.

There's also some interesting characteristics on the overseas piece. The mine rollers on the engineer support vehicle will come from Pearson in Great Britain. The armor package will come from - this is the add-on armor package - from IBD in Germany. And our external weapons and the 120-mm mortar will come out of Israel, from Rafael & Soltam.

So that's a quick rundown.

This is a limited liability corporation, so we're not dealing with GM or GD, but with this new limited liability corporation.

As I opened up, we're pretty excited about this.

As our secretary stated, this is a win for the U.S. Army's soldiers. It is a first major step in our transformation to that 21st century Army, in the building of the objective force. It provides us capabilities which we have not had in the United States Army and will bring us a long way to developing the organizations and the operational and doctrinal steps as we move forward into the 21st century. So it's pretty exciting.

Gottardi: Ladies and gentlemen, Gen. Kern and Mr. Hoeper will now be prepared to take your questions.
Kern: Charlie?

Q: General, I'd like to ask about numbers. I understand you all plan to buy over the next eight years about - as of now, about 2,100 of these.

Kern: Right.

Q: At $4 billion, would be a little less than $2 million each, if my figures are right. Is that right? How many, exactly? Is it 2,100, or give or take a --
Kern: The numbers we're looking at right now, I think, are 2,118 on the --

Staff: Twenty-one thirty-one.

Kern: - 2,131 on the total. And that's over six years. We buy them on increments. This is not a multi-year contract, this is a requirements-type contract. And so they're bought on annual increments the way this is currently programmed.

Q: When will you start fielding them?

Kern: As soon as we possibly can. The schedule is going to be a challenge for us. And I think you've already seen some of our contractors have already reported that that's going to be a challenge. It is not as quickly as we would like.

Q: What are the dates?

Kern: We are still working out the explicit dates. Remember, we just awarded a contract last night. We know when the deliveries are. And so that's the contractor end of it. We are now working all of those pieces back through our operational side. And then we have 60 days to work out with DoT&E, the Director of Operational Test and Evaluation, the operational test parameters as to when it fits in. In general terms, it's about 16 months later than we had hoped.

Q: Well, when would that put it? I just want to get an idea when - in two years, three years?

Kern: In '02.

Q: In '02.

Q: So wasn't the first unit equipped supposed to be in December of next year? And your first vehicle is actually in March. So it's 16 months from that?

Kern: We will come back and lay out to you all the schedules. We have just awarded a contract which has deliveries. And part of the complicating factor in laying that out precisely to you is, some of how we define, based on the test requirements which we have the next 60 days to work out what those first unit equips - it changes the size of the unit in the organizations. And that's why - I'm not trying to duck your question, but I don't want to give you an answer today and then say, well, we just changed it 60 days from now.

Q: There will be a new administration in a little over two months. Why couldn't you have just waited until then to sign this contract and come up with this configuration? The Bush people, for example, haven't been very shy about saying they're going to make a lot of changes with Army transformation.
Kern: I don't think they're shy about Army transformation. I think they have also said they want to move on and be able to get out of the Cold War mentality and move on, and that's what this is a step on the way towards.

If you talk to my boss, Mr. Hoeper, and you talk to his boss, the secretary [of the Army], and you talk to all of our military's bosses in the Army, General Shinseki, we're too slow. This has been a rather remarkable trip for all of us, to go from a concept about a year ago - originally, we had hoped to award this contract this summer. And so, from their perspective, "we aren't moving fast enough," rather than "why didn't we wait." We have a capability which we are trying to get to the field as quickly as possible because it does not exist today. And so we have organizations and soldiers that time is important that we get this capability to them, and so the process of getting to an award is important to us.

The schedule was one of the critical factors that we looked at, as we looked at these proposals, and the schedule is one that we will continue to try to push and accelerate to bring these in earlier rather than later.

Q: Were you worried that the new administration would slow you down further and that you wanted to keep the momentum going?

Kern: No - I mean, no and yes. No, I was not worried that the new administration would try to slow us down, and yes, I am trying to keep the momentum going. Clearly, we do believe that the momentum of changing the Army, changing the culture and the organization, is something which does take momentum. It's difficult to do.

If you are a young soldier today, and growing up in this Army in the last 20 years, you would have seen what is often described as the best Army in the world. But the equipment that they have had and the organizations they've had have remained unchanged during that period of time, and so changing that and starting it at the bottom and working it all the way up so that the young soldiers that are coming in the Army today and, importantly, their leaders - their noncommissioned officers and the company-grade officers - start the development to that new change is very critical to that momentum.
Q: General, excuse me, you say you're not giving up on tanks. These won't replace tanks.

Kern: Correct.

Q: What are you going to do with the tanks? You got --

Kern: We're going to train, equip and fight them, as we have. We have acquired more than 5,000 Abrams tanks that are in our inventory today. We are modifying the latest generation to the M-1A2 system enhance system, and that is a tank which gives us, along with the Bradley A-3, a fighting team on the heavy force.

And the Third Corps - the Third Armored Corps, headquartered at Fort Hood, remains that capability within the United States to equip with the latest generation of that equipment. But it is equipment which is still 20 years old. We have a recapitalization program, you know, which is a key part of insuring that they're going to be able to last for another 20 years as well.

I think the question that every administration will be challenging us on and looking at is how many, not whether or not that that's a capable tank, but the question of those 5,000 which we acquired and an almost equivalent amount of a few more of the Bradleys; how much of that we continue to upgrade and equip and how do we keep it ready to fight for the next 20 years? We use a half-life metric that says a lot of this equipment starts really wearing out at 2010.

Yeah.

Q: Can you explain how the mobile gun system, the LAV, is the better off-the-shelf, given that you have - the M-8 armored gun system is already type-classified; already produced?

Kern: The LAV variant of the mobile gun system provides us the commonality that we were looking for across this entire capability. The previously-developed AGS, the armored gun system, has different characteristics, requires a track-vehicle mechanic, has different land speeds, and so it changes the operational characteristics of this organization and it increases the logistics requirements of this organization if we mix those. That was clearly a consideration which we made consciously.

Q: General Kern?

Kern: Yeah.

Q: You said that the wheel-versus-track debate is still alive.

Kern: In my view, yes.

Q: Yes, I think that's what you said. What swayed the Army's decision to go with a wheeled vehicle for this force? And what can you say to kind of calm the critics that are out there that say that the wheeled vehicles can't perform as well as track vehicles off-road, or don't have the protection - as much protection as track vehicles?

Kern: They don't have as much protection as a tank, not track vehicles.

Q: Sir --

Kern: And so that's one characteristic. Now, we weighed very heavily looking at the operational characteristics. One of our assessments is: what is the environment that this organization is going to have to fight in the future? And we looked at the kinds of operations that we are conducting today, from the deployments to Saudi Arabia by the 82nd [Airborne Division] and [19]90s to Mogadishu to the Balkans; all of those characteristics show us with urban terrain.

We also know that the cross-country mobility across desert sand was demonstrated by our Marines with their LAVs, and the Saudi army owns these systems as well and have demonstrated it.

And so it's a trade that you can make. And I can find a set of characteristics and I can build an operational scenario for you where wheels will always win. And I can do the same thing for tracks. And so it's a judgment of what is the balance of the kinds of situations that you're going to find yourself in in the 21st century, and we believe that this is a characteristics missing from the United States Army, to go very quickly across not necessarily highways, but improved roads, and gives us very good cross-country mobility as well. I would not try to defend to you that this could do everything that a track vehicle can do in the worst conditions, but it can do some other things much better than a track vehicle can do in other conditions. And so that was the balance in judgment we made.

Q: Can you address - I don't know all the armor requirements of the finalists, but how did - (inaudible) - LAV stand up, stand as far as armor? Was it the best-protected vehicle of the finalists, or was it --

Kern: I will not compare it to any of the other finalists. All I can tell you is that what we have is 14.5 millimeter armor protection all around, and that's better than any of the track vehicles we have today in our inventory, and that's a capability that was a significant --

Hoeper: It's actually not better than the tanks.

Kern: Not better than the tanks. Yes, clearly not better than the tanks.

Q: But the Army is happy with the protection for the armor in the LAV?

Kern: Yes. I mean, that level of protection is twice what we asked for. And so it's significant.

Q: Sir, the first contract that will be signed for - I guess it's 312 vehicles - I'm sorry, 320 vehicles. What is that dollar figure, and what's the R&D [Research and Development] contract you signed yesterday dollar-wise?

Kern: I think I have those figures here. The total contract can go to up $4 billion. No, I thought I had them, and I don't. Let me see.

Don, can you help me for a second?

Staff: Sir, the R&D for the three vehicles General Kern mentioned is $67 million awarded last night for the production of the first delivery order of vehicles, which is 360 vehicles roughly for $580 million.

Q: Five hundred eighty million. Okay.

Sir, can I drill you a little bit on the schedule issue? Repeatedly in the Army's requirements documents and public documents, they said the first unit equipped would be December of next year, the first brigade would be ready - (inaudible) - 96 hours anywhere in the world. And you're saying now that date has slipped by 16 months?

Kern: The first unit date is about 16 months slip, as we calculate it now, and we're going to have to go back and do the final adjustments on it. That's why I said I don't want to be too fine a point on that for you today.

Q: Well, why is it that it happened, though? You were pretty consistent throughout the last year. That does not tell a good tale there, if you're already a year and a half behind your original schedule.

Kern: Not a year and a half. I mean, we only started a year ago.

Q: Well, 14 months or whatever.

Kern: We're not quite miracle workers. Clearly, what we had a choice to make is, how do you trade performance and schedule, and those were the choices that we had to deal with. And in our schedule, I will just tell you, the chief is not happy with the schedule that we are bringing in; that he would like it to be much sooner than it is. We are very happy with the performance, and so it was a judgment.

Q: Can you say how that compares to the other --

Kern: No, I cannot.

Yeah?

Q: General Kern, two related questions. First, the phrase "commercial off-the-shelf," "off the shelf" was used throughout, in fact, used by you today. Yet, three of these vehicles need to be developed. And so can you really call it "off the shelf"? The second related question is, I'm told by a member of the Army Science Board that this purchase is directly and absolutely the opposite of what the Army Science Board recommended, which was the cheapest possible buy in entirely off-the-shelf, with no development.

Kern: I'm not sure that we asked the Army Science Board opinion on this particular acquisition. If we were, I was not aware of it. Secondly, this system is a capability which leads us to an objective force, and that's really what the Army Science Board was focused on, was an objective force design, not this interim design.

Q: And the off-the-shelf question, that you're developing three systems --

Kern: Yeah, the off-the-shelf - the integration of these systems back here - I'll just pull it out - is equipment that already exists in the Army today which has to be integrated into a different platform. So we aren't developing anything new. So as I said earlier, the NBC reconnaissance vehicle takes a sensor package off the Fox vehicle and integrates it into a new platform. The reconnaissance vehicle takes the LRAS-3, which was another development which the Army has already done, and integrates into the LAV-3.

The mobile gun system takes a 105 cannon which we already have and integrates it into the LAV chassis with a turret. And so off-the-shelf, in the context that we are speaking of, it means that there are integration efforts required for development, but we aren't designing new guns, sights, or sensor packages for this equipment.

The schedule is important, so what we're taking is the best that we find today that exists.

Q: What you're saying is, you're using one vehicle and adding stuff on in those three cases. Right?

Kern: Yes.

Q: They're all one vehicle, basically.

Kern: Correct. It is all one vehicle it's based from.

Q: At the press conference in July, after the bid sample had just - evaluation had just completed, Colonel Schenk had said that performance between wheels and tracks was pretty much indiscernible, that the real question was going to be to look at O&S costs.

You've just said the performance in the lab is what you were happy with. Can you explain what ended up happening there?

Kern: The performance, I think, that Don was referring to was against the requirement. They both met the requirement - one barely, one far exceeded the requirement.

In our family of systems that we looked at today, is - in that context, in what I'm referring to in that is what we own today - are - and that's where we generated our basis of the comparison that I think Don was referring to - is a family of vehicles that on one set of conditions can meet our requirements, but one can exceed it significantly. And so when you pick that, it's - again, it's a value judgment that one makes that that gives you a much better performance characteristic.

And I go back to our earlier studies that we said that speed, we believe, will make a significant difference in the future battlefield.

Gottardi: Ladies and gentlemen, we have time for one or two more questions.

Q: General Kern --

Kern: Sean, you've been remarkably quiet.

Q: When did you notify the full corporate teams of the decision? And had you received or do you expect to receive a protest to the decision?

Kern: We notified them last night. I never expect to receive a protest.

Q: So you haven't received one yet?

Kern: No.

Q: Does the LAV-3 meet all the requirements currently, without additional modifications?

Kern: One of the - one of our - the criteria in the whole process is you have to meet the requirements, or you're not competitive.

Q: So no - extensive modifications won't be required to meet --

Kern: No, and the contract that they signed calls for them to meet those requirements within the contract price.

Q: Okay.

Q: Over the last several years, the workforce at the Lima Army tank plant has been shrinking. Can you explain how you feel this new vehicle will impact the tank plant? And then secondly, can you tell me whether the concern about the future of the Lima Army tank plant had any impact in your decision on choosing General Dynamics?

Kern: The answer to the latter is no. The Lima Army tank plant was a facility which we built - the United States Army built - to build tanks. And do it's been facilitized to a very large part and for that, invested by the Army.

The fact that we can use it for other capabilities right now without having to build new facilities is a plus because that gives us a significant edge in terms of overhead and how it impacts other things, and doesn't require us to do any brick and mortar work before you can build these things. So we encouraged people in the solicitation to use existing facilities and Lima is one of them.

Q: General Kern, you mentioned a reduced logistic split. Does the Army have an estimate of how much money it will save with this reduced logistic split; how many parts, you know, it will save that we will not have to buy? Can you give us an estimate?

Kern: One of the things that we've probably misled - no, I can't answer the question on parts. We're not at that level of detail yet of that. We know that the commonality of parts reduces the stockage numbers but I can't tell you yet exactly what that will be. That's part of what we call a logistics analysis as we go through the stockage levels.

We expect that it's going to be billions of dollars that we're going to save. Now, I say that, and one of the things that - if you look at the Army's plans that are emerging right now; while we label the system interim, it's going to be in our inventory for more than 30 years.

Remember I just said at the beginning of this that this is the first new ground system that we have bought since the Bradley production started in 1980. And so, if you look at our history of how long we keep weapons platforms, and if you look at our most optimistic schedules of bringing on the objective force, this will be the last vehicle to go out of the system because it's the newest vehicle we have and so it's going to be here for a long time. So the operating and support costs, we believe, will be very significant.

Q: How many other countries have this? Don't the Brits use it and the Saudis? How many other countries?

Kern: There's a number; we can provide you that. I don't have it off the top of my head, Charlie.

Q: But a number of countries?

Kern: I'll provide it to you later.