the program demonstrates the inherently increased risk involved with relying only on low-risk manufacturers in a rapid program.
Contracting Strategy and Management
The contracting strategy mirrored the acquisition strategy by executing as many steps of the contracting process as possible in parallel rather than series. The MRAP JPO contracting team started the process by awarding a sole-source contract to FPII for 288 Cougar vehicles, while simultaneously issuing an RFP to industry. The JPO did this in order to leverage an active production line and start production immediately, while also beginning to mobilize the industrial base. This competitive approach provided several important benefits. For one, it spurred innovation in that the JPO accepted different designs as long as they could meet or exceed a minimum survivability requirement. In addition, a $100,000 incentive per vehicle for early delivery of test vehicles motivated the manufacturers to deliver test vehicles earlier than their proposed schedules (2008, Owen, p.11). The JPO contracting office also incentivized speed in delivery by establishing the order of testing based on order of delivery. For example, the first manufacturer to deliver vehicles for testing, FPII, was the first to begin DT-C1 testing. The first manufacturer to complete this testing was also the first awarded an LRIP contract. To further add leverage, the JPO made no guarantee that all manufacturers that did deliver would be awarded a production contract, thereby creating a winner-take-all possibility. Although all manufacturers that eventually passed testing were awarded LRIP contracts, manufacturers did not know that there would be multiple contracts at the time of testing. In fact, each contract had a 4,100 vehicle ceiling per year, with the intent of having enough production capacity under any one contract for the possible award of the entire requirement (then 4,066 vehicles) to a single manufacturer (Owen, 2008, p.11). This further incentivized the manufacturers to deliver first.
The initial approach of issuing IDIQ contracts followed by production orders to low-risk manufacturers prior to testing, although costly, accomplished two tasks. First, by buying all rather than a portion of the minimum amounts from each manufacturer, the Government fulfilled the obligations of the IDIQ contracts. This reduced the risk of