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MRAPs Analysts consider the MRAP mart one, big moving target

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Analyzing the supply-and-demand equation for mine-resistant ambush-protected (MRAP) vehicles is no easy science.

The finer details of the U.S. government's procurement program can appear at times a bit shrouded in mystery.

Dean Lockwood, a weapons systems analyst at research company Forecast International Inc., Newtown, Conn., knows this all too well. "Throughout this program so many numbers have been thrown around. They (the government) have hardly been forthcoming about the number of vehicles actually being produced."

But Lockwood has been extracting what he can from various government disclosures and adding up the numbers that appear the most realistic. As of September, Lockwood said, the U.S. Defense Department had a procurement objective of 15,374 MRAPs in various configurations. But as of the end of October, the Defense Department had ordered just 8,651 vehicles.

Based on procurement objectives, Lockwood projects deliveries of 6,400 vehicles in 2008, a little more than 4,000 units in 2009 and about 2,700 vehicles in 2010. "Those are very broad extractions based on production rates right now," he said. "The big wild card is the tactical situation in Iraq. If things stabilize to the extent that they start pulling troops out, there's going to be a corresponding reduction in demand for these vehicles."

In June, the Defense Department's Joint Requirements Oversight Council endorsed a requirement to replace every up-armored Humvee in Iraq with a MRAP. At the time, the council said this could potentially drive procurement up to more than 23,000 vehicles, but in September the council validated a procurement objective of only 15,374 vehicles, Lockwood said.

The military recently started on the MRAP-2 program, which is intended to address a lot of the automotive and armor problems of the original vehicles. A request for proposals for MRAP-2 last July specified a five-year program with a 20,500-vehicle requirement.

But Lockwood said he's taking that with "a grain of salt" because the U.S. Marine Corps Systems Command, the lead agency for MRAPs, later authorized the existing MRAP contractors to submit their bids for MRAP-2 as "Engineering Change Proposals" to their previous proposals under the original MRAP program. This doesn't limit new bids from other contractors, but appears to give the existing MRAP contractors "a distinct advantage," he said.

As such, Lockwood suspects the MRAP-2 program could ultimately involve some level of retrofit to existing MRAP vehicles, "thereby invalidating at least part of the stated 20,500-vehicle MRAP-2 requirement."

Marcia Price, president and founder of Vector Strategy Inc., an Orlando, Fla.-based market intelligence company for the armor industry, has crunched some numbers for overall material and steel demand related to armor procurement for military ground vehicles.

She suggests that armor for mine-protected vehicles and MRAPs will account for 30 percent of total steel requirements for armor in 2008 based on current procurement objectives; light tactical vehicles, primarily the Humvee fleet, will represent about 40 percent of steel requirements for armor; and the remainder will consist of armor for combat vehicles and medium and heavy tactical vehicles, such as tanks and strikers. By comparison, armor for MRAPs represented only about 15 percent of steel plate consumed for this purpose in 2007.

Peak demand for overall raw armor materials, of which steel is a major component, should be reached in 2008, she said, but it's difficult to forecast exactly when demand will drop off.


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