BAE of Sterling Heights beats out neighbor, General Dynamics, for $1.2 billion Pentagon contract

BAE will build the Army's AMPV troop transporter

By Chad Selweski

The Macomb Daily

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 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.

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.

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.

BAE's new building in Sterling Heights

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.”