Army Acquisition: Commercial Components Used Extensively in Tactical
Trucks (Letter Report, 09/26/94, GAO/NSIAD-94-240).

Key operational requirements prevent the Army from buying pure
commercial or off-the-shelf trucks to meet its tactical truck needs.
However, the Army is making extensive use of commercial technology and
commercial components in the tactical trucks it buys. For the four
tactical truck systems reviewed, GAO found that the manufacturers used
commercial trucks as baselines for their systems and generally used
commercial manufacturing practices and components to produce tactical
trucks. In addition to such operational requirements as tactical
mobility, deployability and transportability, and survivability, Defense
Department and Army policies place demands on contractors beyond what
are found in the commercial marketplace. For example, contractors must
undergo rigorous testing procedures, develop more detailed technical
manuals, use standard parts already in the Army's inventory system, and
adopt military quality standards.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-240
     TITLE:  Army Acquisition: Commercial Components Used Extensively in 
             Tactical Trucks
      DATE:  09/26/94
   SUBJECT:  Army procurement
             Military land vehicles
             Motor vehicle standards
             Defense contingency planning
             Military operations
             Operations analysis
             Spare parts
             Procurement evaluation
             Defense capabilities
             Mobilization
IDENTIFIER:  Family of Medium Tactical Vehicles
             Army Heavy Equipment Transporter System
             Army Light Equipment Transporter
             FMTV
             C-130 Aircraft
             C-141 Aircraft
             C-5 Aircraft
             C-17 Aircraft
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Governmental
Affairs, U.S.  Senate

September 1994

ARMY ACQUISITION - COMMERCIAL
COMPONENTS USED EXTENSIVELY IN
TACTICAL TRUCKS

GAO/NSIAD-94-240

Army Acquisition


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  FMTV - Family of Medium Tactical Vehicles
  HETS - Heavy Equipment Transporter System
  LET - Light Equipment Transporter
  NDI - Non-developmental Item

Letter
=============================================================== LETTER


B-257903

September 26, 1994

The Honorable William V.  Roth, Jr.
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

Dear Senator Roth: 

In response to your request, we reviewed the Army's use of commercial
technology in tactical trucks.  Specifically, we reviewed the
commercial technology used in the production of the Army's Family of
Medium Tactical Vehicles (FMTV), the Heavy Equipment Transporter
System (HETS), and the line haul and the Light Equipment Transporter
(LET) tractor trucks.  Our objectives were to determine (1) whether
the Army could meet its tactical truck requirements through
purchasing purely commercial or "off-the-shelf" trucks; (2) if this
was not feasible, what modifications contractors had to make to
existing commercial trucks or what actions contractors had to take to
meet the Army's requirements; and (3) the Army's requirements that
limit the use of off-the-shelf commercial trucks. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Key operational requirements prevent the Army from buying pure
commercial or off-the-shelf trucks to meet its tactical truck needs. 
However, the Army is making extensive use of commercial technology
and commercial components in the tactical trucks it buys.  For the
four tactical truck systems we reviewed, we found that the
manufacturers of these systems used commercial trucks as baselines
for their systems and generally used commercial manufacturing
practices and components to produce tactical trucks.  In addition to
such operational requirements as tactical mobility, deployability and
transportability, and survivability, Department of Defense (DOD)
standards and Army policies place demands upon contractors beyond
what are found in the commercial marketplace.  For example,
contractors must undergo rigorous testing procedures, develop more
detailed technical manuals, use standard parts already in the Army's
inventory system, and adopt military quality standards. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Reduced defense budgets are forcing DOD to develop new strategies to
use more commercial technology in order to reduce acquisition costs
and maintain a viable industrial base.  Advocates of increasing the
use of commercial technology believe that it will reduce the cost of
military systems and improve DOD's access to new technologies. 

Tactical trucks are the backbone of the Army's warfighting support
and sustainment structure.  They are used to transport personnel,
munitions, combat vehicles, petroleum products, critical supply
items, and combat casualties.  They also serve as platforms for
command, control, communications, computers, and intelligence systems
and selected weapon systems.  To meet the Army's warfighting
requirements, tactical trucks must be deployable and mobile on any
battlefield in all climate conditions. 

The Army acquires its tactical trucks using a nondevelopmental item
(NDI) approach.  Depending on the amount of modification required to
make the item meet the Army's needs, NDI acquisitions can vary. 

  Items in production and available on the public market at
     established prices are classified as basic or pure NDI
     acquisitions. 

  Items requiring minor development or modification of hardware or
     operational software to meet the Army's needs are classified as
     modified NDI acquisitions. 

  Items requiring major development or modification of hardware or
     operational software are classified as integrated NDI
     acquisitions.  Because of the amount of research and development
     normally required for system integration, this acquisition is
     closest to a developmental-type item. 

The FMTV program is one of the Army's largest acquisition programs. 
At a projected cost of $15.9 billion, the Army plans to purchase
87,598 2.5-ton and 5-ton trucks over 30 years to replace its aging
medium truck fleet.  On October 11, 1991, the Army awarded a
$1.2-billion, 5-year contract to Stewart and Stevenson Services,
Inc., of Houston, Texas, for the production of the first 10,843 FMTV
trucks.  For HETS, the Army contracted with Oshkosh Truck Corporation
of Oshkosh, Wisconsin, for 1,354 tractors at a cost of $275.3 million
and Southwest Mobile Systems of St.  Louis, Missouri, for 1,376
semitrailers at a cost of $158.6 million.  Under its 1988 contract
with the Freightliner Corporation of Portland, Oregon, the Army has
purchased 849 line haul tractors and 929 LET tractors at a cost of
$219.6 million. 


   KEY OPERATIONAL REQUIREMENTS
   PREVENT PROCUREMENT OF
   COMMERCIAL TRUCKS
------------------------------------------------------------ Letter :3

The contractors for the tactical truck systems we reviewed made
extensive use of commercial manufacturing practices and commercial
components in developing and producing the trucks.  Although the Army
and the contractors do not keep records of the amount of commercial
components used in their trucks, the acquisition plans for all four
trucks stated that each would primarily use commercial components. 
The major components--the engines, transmissions, axles, and
tires--on all the trucks we reviewed were commercial components. 
Also, as shown in table 1, all the contractors started with a
commercial vehicle as a baseline and either used an integrated or
minor modification NDI approach to develop their tactical truck. 



                                     Table 1
                     
                      Commercial Basis and NDI Approach for
                                 Tactical Trucks

                                                              Commercial truck
System      Mission             Manufacturer   NDI approach   used as baseline
----------  ------------------  -------------  -------------  ------------------
FMTV        Wide range of       Stewart &      Integrated     Steyr-Daimler-
            combat, combat      Stevenson                     Puch AG 12M18
            support, and        Services,
            combat service      Inc.
            support missions
            requiring
            extensive off-
            road mobility and
            deployability.

HETS        Transportation and  Oshkosh Truck  Integrated     Oshkosh F2365
            evacuation of 70-   Corporation
            ton Abrams tank     (M1070
            and other heavy     tractor)
            tracked and
            wheeled vehicles.   Southwest      Integrated     Southwest XM1000
            Mission requires    Mobile                        prototype\a
            HETS to traverse    Systems
            cross-country       Corporation
            terrain with a      (M1000
            heavy payload.      semitrailer)


Line haul   The line haul       Freightliner   Minor          Freightliner FLD
and         tractor (M915A2)    Corporation    modification   120 conventional
Light       is used to
Equipment   transport bulk
Transporte  cargo, cargo
r tractors  containers, and
            fuel using primary
            and secondary
            roads. The Light
            Equipment
            Transporter
            (M916A1) is used
            to transport
            engineer equipment
            to and from work
            sites and other
            line haul
            transportation
            missions. Limited
            cross-country
            capability is
            required.
--------------------------------------------------------------------------------
\a Southwest Mobile developed the military XM1000 prototype based on
a commercial semitrailer produced by Scheuerle, a German company. 

The Army's FMTV and HETS requirements could not be met by making
minor modifications to a commercial truck.  To meet the requirements,
the contractors had to integrate commercial and military components
into their baseline vehicles and develop new systems to meet the
Army's requirements.  In contrast, the contractor could meet the
Army's requirements for the line haul tractor and LET by making minor
modifications to its existing line haul tractor.  Army and contractor
officials identified tactical mobility, deployability and
transportability, survivability, and other unique military needs as
the key operational requirements that prevented the Army from using
the baseline commercial trucks. 


      TACTICAL MOBILITY
---------------------------------------------------------- Letter :3.1

The Army's tactical trucks must demonstrate a level of mobility that
varies depending on each truck's wartime mission.  The Army's medium
trucks are the workhorses of the battlefield, serving as the primary
movers of unit equipment and personnel.  The mobility requirement
calls for the FMTV trucks to be able to operate on the front lines,
often off road and alongside the Army's tracked vehicles.  The HETS
mission scenario requires it to traverse cross-country terrain
carrying the Army's 70-ton Abrams tank and other heavy tracked and
wheeled vehicles as far forward on the battlefield as possible.  The
line haul tractor is designed to perform high-speed resupply
operations over extended distances on primary and secondary roads. 
LET is primarily used to transport heavy engineer equipment, such as
bulldozers, to and from work sites.  To perform this mission, LET
must have a limited off-road capability. 

To meet the Army's FMTV mobility requirements, Stewart & Stevenson
Services, Inc., made numerous modifications to an Austrian army
medium truck manufactured by the Austrian firm of Steyr-Daimler-Puch
AG.  For example, the company added a more powerful engine to allow
FMTV to climb steep grades when operating off road and a central tire
inflation system to allow tire pressure to be varied from within the
cab, increasing off-road mobility. 

The Oshkosh Truck Corporation made numerous modifications to its
commercial tractor to allow the HETS tractor to pull the required
70-tons of payload off highway.  For example, the company modified
its baseline tractor's axles to improve mobility in soft soil.  The
Southwest Mobile Systems Corporation was able to develop a
semitrailer able to survive the abuses of driving off highway with a
70-ton payload, meet the Army's intersection turning requirements,
and comply with bridge load limits for HETS by adopting and modifying
a European semitrailer design with steerable axles. 

The Freightliner Corporation did not have to modify its commercial
line haul tractor to meet the Army's line haul primary and secondary
road requirements.  However, it added an extra driving axle and
strengthened the suspension system of its commercial line haul
tractor to meet LET's limited off-road requirements. 


      DEPLOYABILITY AND
      TRANSPORTABILITY
---------------------------------------------------------- Letter :3.2

The Army's operational doctrine envisions contingency forces based in
the United States that will respond quickly to crises worldwide by
airlift and sealift.  To meet this doctrine, the Army's tactical
trucks must be easily transportable and deployable by a variety of
means. 

Of the systems we reviewed, FMTV has the most stringent air
transportability requirement.  The trucks must be transportable by
C-130, C-141, C-5, and C-17 aircraft without altering the vehicle or
removing vehicle components.  Stewart & Stevenson modified the Steyr
design to allow the FMTV trucks to fit into the required aircraft. 
In addition, Stewart & Stevenson developed and is producing a limited
number of airdrop versions to be used by the Army's airborne
divisions.  The airdrop versions feature windshields and windows that
fold down, reducing the height of the vehicles so that they can be
ejected out of the back of the aircraft. 

In addition, all four of the systems we reviewed must be equipped
with adequate lifting and tiedown points to allow the trucks to be
lifted and secured for sea and rail transport.  According to U.S. 
Army Transportation School and Military Traffic Management Command
officials, the ability to lift vehicles onto ships is critical to the
fast deployment of the vehicles, given the military's limited number
of roll-on and roll-off ships.  Freightliner Corporation officials
said that the modifications necessary to meet the Army's lifting and
rail transportation requirements for the line haul and LET tractors
was one of the most costly and difficult modifications they had to
make to their commercial tractor.  Freightliner's modifications
included the addition of shackles and hardpoints for tiedown and
lifting, strengthening of its commercial tractor's frame and mounting
component in such a way as to prevent failure during rail shipment. 


      SURVIVABILITY
---------------------------------------------------------- Letter :3.3

To survive on the modern battlefield, the Army's tactical trucks must
survive a high altitude electro-magnetic pulse or limit their
susceptibility to and emission of electro-magnetic interference.  The
truck manufacturers hardened and insulated their trucks' electronic
components and, in some cases, used components specifically designed
for military application to limit their truck's susceptibility to
these electro-magnetic forces.  The FMTV's alternator is an example
of an item specially designed for military use.  It provides the
needed amperage and protective shielding. 

Also, to survive in a chemical weapons environment, the Army requires
that a special paint be used to facilitate the decontamination of the
vehicle.  This paint will not melt when harsh cleansing agents are
used to remove chemical contamination.  Contractors said that the
paint is very difficult and time-consuming to apply.  They must take
special care in cleaning and priming the vehicle prior to applying
the paint.  The paint takes much longer to cure than ordinary paint. 


      OTHER UNIQUE MILITARY NEEDS
---------------------------------------------------------- Letter :3.4

Each of the trucks we reviewed had to meet a number of other
requirements not found in the commercial world.  For example, they
must be equipped with dual 12-volt and 24-volt electrical systems. 
The 12-volt capability is used to power vehicle lights, while the
24-volt capability is needed to start the trucks during cold weather
as low as -50 degrees Fahrenheit and to power Army radios.  Also, to
ensure interoperability to the extent possible, newly fielded trucks
must maintain compatibility with previously fielded equipment, such
as trailers and standardized test equipment. 


   OTHER DEMANDS ON MANUFACTURERS
   NOT FOUND IN COMMERCIAL
   MARKETPLACE
------------------------------------------------------------ Letter :4

Tactical truck manufacturers we spoke with identified four other
areas that place demands upon them not found in the commercial
marketplace.  These areas are vehicle testing, technical manuals
development, standard parts usage, and military quality standards
compliance. 


      TESTING
---------------------------------------------------------- Letter :4.1

The Army tests its vehicles to help ensure the timely development,
production, and fielding of systems that meet the user's requirements
and are operationally effective and suitable.  This differs from the
commercial market where buyers do not subject vehicles they have
already purchased to extensive tests.  There are two main types of
Army system tests:  technical and operational.  The Army conducts
technical testing to demonstrate that the design risks have been
minimized, the engineering development process is complete, and the
vehicle meets system specifications.  The Army conducts operational
testing in a field environment under realistic combat conditions to
determine that the vehicle is operationally effective and suitable
for use in combat by typical military users. 

Two of the four contractors disagreed with the Army about the
rigorousness of the tests needed to demonstrate that their vehicles
met the requirements.  They said that their trucks were being over
tested.  Army officials, on the other hand, said that they were
simply testing the trucks to the Army's requirements.  The Army
requires that its trucks be deployable, mobile on any battlefield in
any and all climate conditions, and require minimum maintenance.  In
addition, the Army retains its trucks for significantly more years
than do commercial users.  Army officials said that without extensive
testing, the Army would not be able to ensure that the trucks it is
buying will meet its operational requirements, be easily
maintainable, and survive many years of rugged use. 


      TECHNICAL MANUALS
---------------------------------------------------------- Letter :4.2

The Army requires that its vehicles be fielded with detailed
technical manuals and other documentation covering the operation and
maintenance of the vehicle.  The Army requires specialized manuals
because (1) Army drivers and mechanics generally are not as well
trained as commercial drivers and mechanics, (2) frequent
reassignment and personnel changes limit the experience soldiers are
able to gain with a given system, and (3) the soldiers themselves are
responsible for some maintenance and repairs of their systems. 

Contractors said that technical manual development is a difficult,
time-consuming, and costly process.  Oshkosh officials stated that
manual development becomes the critical path, determining the time it
will take to develop and field a system.  Freightliner officials
noted that for systems requiring only minor modifications, manuals
can take longer to develop than the trucks themselves.  Officials
from the U.S.  Army Tank-Automotive Command, U.S.  Army Ordnance
Center and School, and U.S.  Army Transportation School agreed that
the Army's requirement for technical manuals is a burden not found in
the commercial marketplace; however, they believe that properly
developed manuals are essential given the Army's unique warfighting
requirements. 

Also, contractors and the Army disagree regarding the adequacy and
consistency of Army guidance on manual preparation and the
feasibility of verifying the accuracy of manuals during operational
testing.  Contractors said that the Army does not provide up-front
direction on the requirements, which are often subjective, open to
interpretation, and subject to change.  Creating a further burden for
contractors is the need to have draft manuals available for
operational testing.  For example, Oshkosh officials believed that
evaluating the manuals during operational testing was an unrealistic
demand.  They said they had to limit design changes, even though
changes may have resulted in a better truck, to allow time to develop
manuals in time for operational testing. 


      STANDARD PARTS
---------------------------------------------------------- Letter :4.3

DOD requires all agencies and departments to establish, conduct, and
maintain a parts control program, maximizing the use of standard
parts.  Standard parts can be military standard or, more commonly,
commercial standard parts.  Use of standard parts reduces both the
Army's inventory carrying costs and the number of different parts
units must carry when they deploy. 

Although using standard parts is clearly a logistics benefit for the
Army, identifying standard parts can be a time-consuming,
labor-intensive process for contractors.  Early in a vehicle's
development, contractors must carefully screen databases of standard
part numbers to identify and catalog standard parts on their systems. 
When a standard part cannot be identified or used, the contractor
must submit a technical justification to the Army explaining why a
nonstandard part is necessary.  In most cases, the Army will accept
the contractor's rationale and add the new part to the standard parts
database.  In cases where the Army does not accept the justification,
the contractor must use a previously listed standard part. 

Three of the four contractors accepted the parts control process as a
burden of doing business with the government.  Officials of the
remaining contractor--Stewart & Stevenson--expressed a great deal of
frustration with the requirement.  They said that the use of standard
parts was an enormous paperwork burden. 


      MILITARY QUALITY STANDARDS
---------------------------------------------------------- Letter :4.4

Each of the contractors had to comply with DOD's military quality
standards for inspection and production.  These standards differ from
commercial standards in that the emphasis is on consistency of
product versus continuous improvement.  That is, to ensure
commonality and fitness for a particular purpose, the Army does not
want its systems to change at the manufacturers discretion once the
configuration of the vehicle has been successfully set and tested. 
This differs from the commercial marketplace where manufacturers make
routine changes to improve performance, reduce cost, or both. 

To ensure consistency, DOD inspectors conduct daily inspections of
work processes and completed work at each manufacturer's plant.  In
addition, contractors must maintain detailed records.  For example,
Southwest Mobile officials stated that they have to maintain
information on sources of supply, decisions on scraping or reworking
materials, and consistency of subcontractor items that they would not
have to maintain if producing for the commercial marketplace. 
Contractors generally viewed the military quality standards and
inspection procedures as a cost of doing business with the
government. 


   ROLE OF COMMERCIAL TRUCKS FOR
   NONTACTICAL NEEDS
------------------------------------------------------------ Letter :5

While the Army cannot meet its tactical truck needs using pure or
off-the-shelf commercial trucks, the use of pure commercial vehicles
for nontactical purposes could be increased.  In and around its
bases, the Army needs vehicles to perform nontactical transportation,
such as personnel transportation and general cargo hauling.  The Army
has a fleet of commercial vehicles--pickup trucks, vans, busses,
etc.--to perform nontactical base transportation.  However, many of
the units located on the bases also use their tactical trucks for
these purposes. 

Army Transportation School officials said that using commercial
vehicles instead of the units' tactical trucks for base
transportation could result in operation and maintenance savings
because tactical trucks have significantly greater operation and
maintenance costs than commercial vehicles.  However, an official
from the Tank-Automotive Command's Fleet Planning Office did not
believe that the savings would outweigh the cost of purchasing or
leasing commercial vehicles.  His conclusion was based on the
assumption that the increased use of commercial vehicles would not
lead to a decrease in the number of tactical trucks because tactical
truck requirements are based on warfighting needs, not peacetime use
requirements.  As a result, the Army would have to purchase or lease
commercial vehicles in addition to the tactical trucks it requires. 

Neither the Transportation School nor the Tank-Automotive Command has
performed an analysis to support their position.  Also, we did not
perform a cost-benefit analysis of the use of commercial vehicles for
these purposes. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

DOD concurred with our report.  Its comments are reprinted in
appendix I. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

We interviewed and obtained program documents from officials at the
U.S.  Army Program Executive Office for Combat Support, Warren,
Michigan; U.S.  Army Tank-Automotive Command, Warren, Michigan; U.S. 
Army Transportation School, Fort Eustis, Virginia; U.S.  Army Test
and Evaluation Command, Aberdeen Proving Ground, Maryland; U.S.  Army
Ordnance Center and School, Aberdeen Proving Ground, Maryland; the
Military Traffic Management Command, Transportation Engineering
Agency, Newport News, Virginia; and the U.S.  General Services
Administration, Washington, D.C.  In addition, we interviewed
officials of the Freightliner Corporation, Portland Oregon; Oshkosh
Truck Corporation, Oshkosh, Wisconsin; Southwest Mobile Systems
Corporation, St.  Louis Missouri; and Stewart and Stevenson Services,
Inc., Houston, Texas.  We conducted our review from September 1993 to
July 1994 in accordance with generally accepted government auditing
standards. 


---------------------------------------------------------- Letter :7.1

We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate and House Committees on Armed Services
and on Appropriations and the House Committee on Government
Operations; the Chairman, Senate Committee on Governmental Affairs;
the Director of the Office of Management and Budget; and the
Secretaries of Defense and the Army.  We will also provide copies to
others upon request. 

Please contact me on (202) 512-4841 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix II. 

Sincerely yours,

Thomas J.  Schulz
Associate Director, Systems Development
 and Production Issues




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Robert J.  Stolba
Derek B.  Stewart
Lawrence D.  Gaston, Jr. 


   DETROIT REGIONAL OFFICE
-------------------------------------------------------- Appendix II:2

Robert W.  Herman
Gregory A.  Kalin
Patricia A.  Rorie
