BAE Systems Plc’s manufacture of the U.S. Army’s new howitzer is hobbled by poor welding, supply chain problems and delivery delays even as the service nears a $1.3 billion decision on full production, according to the Pentagon’s contract management agency.
Among the setbacks have been a six-month halt in deliveries last year because of welding flaws and the return of 50 of 86 vehicles that had already been delivered due to repair production deficiencies.
Nevertheless, Army officials plan to meet on Thursday to decide on approval of full-rate production, the most lucrative phase for London-based BAE. That would trigger $1.3 billion in contract options and increase vehicle production to about 60 from 48 a year, according to a Pentagon program assessment.
The Pentagon’s Defense Contract Management Agency “assesses that BAE is currently experiencing significant supply-chain, part quality and delivery issues,” spokesman Mark Woodbury said in an email. “DCMA’s assessment has been shared with” the Army and “could potentially aid the program office’s final decision to proceed” to full-rate production, he said.
But Ashley Givens, an Army spokeswoman, said “we are not considering delaying” the review. “BAE’s current production/quality issues will be discussed during the meeting. We expect BAE to deliver vehicles in accordance with the contract no matter the rate of production.” She said BAE has “implemented process improvements that are expected to address the recent quality problems.”
The Army has oversight of the program and its key milestones, but Ellen Lord, the undersecretary for acquisition and sustainment, “is concerned that current production problems” at the BAE’s facility in York, Pennsylvania, “could impact performance and delivery on other combat vehicle programs,” a spokesman, Air Force Lieutenant Colonel Michael Andrews, said in an email. (end of excerpt)
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