BAE Systems new deal with the Marine Corps to deliver Amphibious Combat Vehicles (ACV) is expected to be worth $1.2 billion and include a total delivery of 700 vehicles as the service looks to phase out its legacy fleet by 2020.

The Marine Corps on Tuesday selected BAE over SAIC [SAIC] to produce its next-generation ACV, an eight-wheeled armored personnel carrier, with an initial $198 million deal to deliver 30 vehicles beginning in fall 2019 (Defense Daily, June 19).

BAE Systems' ACV. David Schacher Photography LLC
BAE Systems’ ACV.
David Schacher Photography LLC

“We are well positioned and ready to build the future of amphibious fighting vehicles for the Marine Corps, having already produced 16 prototypes,” Dean Medland, BAE Systems’ vice president of combat vehicles amphibious and international, said in a statement. “Through this award, we are proud to continue our partnership with the Marine Corps by providing a best-in-class vehicle to support its mission through mobility, survivability and lethality.”

Under the ACV 1.1 phase, BAE will begin with the $198 million, 30-vehicle low rate production deal and eventual move towards delivery of 204 vehicles. The total contract value if all follow-up options are picked up will be $1.2 billion.

Marine Corps officials expect to complete ACV 1.1 initial operational test & evaluation in the second quarter of FY ’20 and then move on a full rate production decision in the third quarter of that fiscal year.

“ACV 1.1. Is principally focused on getting the legacy system out of the inventory. It has been all about getting to initial operating capability at first opportunity with a good range of capability,” John Garner, Marine Corps’ program executive officer for land systems, told reporters Tuesday. “Quite frankly, we could field the vehicle right now the way it is. But we will always, as we do with every program, continue to do improvements to it.”

The Marine Corps’ original plan to replace its Assault Amphibious Vehicle program with General Dynamic’s [GD] Expeditionary Fighting Vehicle was canceled in 2011, then shifted over to the ACV effort.

A second phase, ACV 1.2, will incorporate lethality upgrades to BAE’s vehicle offering and push the total delivery to over 700 vehicles, according to Marine Corps officials.

“At this time the ACV 1.2 acquisition strategy is still evolving but it’s fair to say that we are working with planning factors that may need us to procure another 400-500 vehicles. Ultimately, the ACV program is expected to have more than 700 vehicles in the fleet, which may include other variants such as Command, and Recovery,” Manny Pacheco, Marine Corps land systems spokesman, told Defense Daily.

BAE will remain the contractor through ACV 1.2 with the aim of working to replace the service’s amphibious vehicle fleet, according to Pacheco.

“It’s too early to speculate if and when there will be another phase, but the Marine Corps is working under the planning construct that around 2025 it will be able to make a final determination on the make-up of the remainder of the amphibious vehicle fleet,” Pacheco said.

BAE’s SuperAV vehicle, built with Italy’s Iveco, was chosen over SAIC’s Terrex offering. The two companies were originally downselected in November 2015 to develop prototypes and move toward operational testing.

“The loss of the ACV contract is a setback for SAIC as the company has made a push with its Platform Integration business and ground vehicles in particular,” Jeffries’ financial analysts wrote in a report following the contract announcement.

SAIC is currently working with the Marine Corps on survivability upgrades for the service’s current Assault Amphibious Vehicle fleet.

“We are disappointed that our vehicle was not selected for the production phase of the ACV program. We believe that our vehicle, developed with our teammate ST Engineering Land Systems, provided the Marine Corps with an innovative solution at best value to meet current and future requirements. We are extremely proud of our performance during the Engineering & Manufacturing Development phase and we will build upon this progress in our growing platform integration business,” Lauren Presti, an SAIC spokeswoman, told Defense Daily.