The Real Story of Production Delays

When the government began purchasing Mine Resistant Vehicle types which later became known as Mine Protected Ambush Protected (MRAP) vehicles, there were limited choices available.

Force Protection, Inc (FPI) had developed the Cougar and Buffalo but had almost no sales and were building them on a one by one basis. Building vehicles on a one by one basis is fine so long as the number of requested vehicles is low.

The military gradually increased the number of vehicles they were purchasing from Force Protection. The first sales of the initial Cougar went to the British. In 2002, the British purchased 8 “Tempest” vehicles from Technical Solutions Group (TSG). TSG was later purchased by the company that became Force Protection and Force Protection’s business became that of making armored vehicles.

In 2004, FPI had only sold a total of 29 vehicles to the military. The military was purchasing very limited number of MRAP type vehicles from FPI and other vendors.

Unlike the Cougar and Buffalo, vehicles such as the RG31 supplied by BAE and General Dynamics continued to have reliability issues and soldiers continued to be killed in them. The Cougar and Buffalo have survived over 2000 IED and mine blasts with only one incident where there were fatalities and the Marines have not yet had a fatality in a FPI vehicle. This is why FPI vehicles gradually became more in demand by the marines.

In 2005, FPI delivered 71 vehicles to the military and began to get contracts for larger numbers of vehicles. Therefore, FPI started the process of creating a regular production line for Cougars.

During this time period, there were production and parts problems. As FPI grew in size and began to build more vehicles, some of their suppliers were unable to support the production growth in a timely manner and at this time, industry was not prioritizing orders for armored glass and steel for military use. This caused the production delays mentioned in the IG report.

To fix these problems, FPI began the process of getting multiple vendors to provide parts for their vehicles. They also increased the inventory of critical parts that they kept on hand and entered into some manufacturing agreements with other companies.

In early 2006, FPI completed staffing the new Cougar production line and by April 2006 they had reached target production of 20 Cougars per month. By mid 2006, FPI seemed to have solved their production and parts issues, were building additional production lines and were producing vehicles ahead of schedule.

Later in 2006, the military announced the MRAP program which initially was going to provide 1200 vehicles and solicited bids for vehicles from multiple vendors. The numbers of vehicles were at this point sufficient such that various military suppliers became interested in developing new vehicles. Prior to the launch of the MRAP program, the military had limited options for purchasing MRAP vehicles due to the low numbers of vehicles that they were purchasing. Military suppliers thought that the MRAP vehicles were low volume niche products and were not interested in developing new MRAP vehicles. The only company that had built an entirely new and upgraded MRAP vehicle was FPI.

FPI licensed from South Africa the most advanced technology available for building MRAP type vehicles and have been working for 8 years to improve upon this. In addition, FPI hired the worlds leading expert on building mine and IED protected vehicles. Therefore, FPI’s vehicles were the most technologically advanced MRAP vehicles of their type.

During the initial phase of MRAP testing, FPI’s Cougar was the first to pas testing. Other vendors either delivered vehicles late or were like BAE and took several iterations of testing, design changes retest and further changes before the vehicle passed.

BAE was involved in another venture with FPI where BAE won a competitive bid to build the Iraqi ILAV vehicles. BAE used FPI's Cougar to win the bid for the ILAV vehicle and then BAE and FPI shared production of the vehicle. FPI kept the rights to the vehicle and received all maintenance and spare parts business. Subsequently, BAE approached FPI to purchase them but had not counted on the increase in share price and their bid was too low and FPI rebuffed them. Subsequently, BAE produced the RG33 line of vehicles which looked remarkably like the Cougar family of vehicles. Unfortunately for BAE, they were unable to use some FPI's technology and therefore the RG33 had a difficult time passing testing and required several changes. BAE is reportedly very much on the “outs” with FPI over the botched buyout of FPI and the fact that BAE could not use some of the technology that FPI controls.

Nine vendors entered into the MRAP competition. So far, only FPI, BAE and Navistar have gotten contracts because their vehicles passed testing. Other vendors have given up on the MRAP competition, didn't produce a vehicle or are trying to fix deficiencies in their vehicles before getting a MRAP contract.

The inspector general indicates that if the military would have provided the awards for military vehicles to other vendors, that they “might” have produced them. However, until the number of MRAP vehicles that the military was proposing to purchase increased in 2006, few suppliers produced MRAP type vehicles and none were as safe, inexpensive and reliable as the Cougar or Buffalo. It is not reasonable to believe that any military supplier would have invested the money and effort to either design a new MRAP vehicle or improve an old one prior to mid-2006 when the number of MRAP vehicles the military was proposing to purchase increased. Since the delivery problems from FPI were prior to that time, this assertion by the IG that other vendors “might” have produced a vehicle or that the military should not have given FPI orders due to prior delivery orders is very suspect. One wonders if

Force Protection continued to receive orders from the military despite initial start up issues, and intermittent production issues and late deliveries in 2005 because FPI had the superior vehicle. The production problems are the result of typical start up issues, not corruption or incompetence.

The article suggesting that there was influence peddling or other reasons for the orders is not credible: http://www.newsday.com/news/politics/wire/sns-ap-armored-vehicle-delays,0,7411825.story?coll=sns-ap-politics-headlines

The Cougar is the least expensive MRAP type vehicle that was available in 2002 to mid 2006 and the safest vehicle available during that time frame and possible the safest vehicle now. The new vehicles industry is now producing have not been in combat and can't be easily compared to FPI’s vehicles. For those two reasons alone (price and safety), the marines should be praised for purchasing vehicles from FPI vehicles.

Currently, Cougars are produced by several companies. FPI entered into a joint venture with General Dynamics to produce Cougars and have production agreements with other companies such as Armored Holdings.

These agreements have positioned FPI as the current vendor that has the highest current production and production capacity. FPI and partners will soon be producing 200 Cougars per month which is by far the fastest production of MRAP vehicles by any other company or group of companies. If the military were to award high volume contracts to other vendors that have not yet proven that they can produce MRAP vehicles in volume and proven that their vehicle will be survivable in combat, then this would be a true tragedy and crime.

Do a little better research and you will find that Force Protection anticipated the military's need, designed a vehicle that is currently saving soldiers lives, currently have ramped up so that they are able to produce the most MRAP's of any manufacture. Designed proven potentially life saving Anti-EFP technology before any other company. Currently have build a light weight, high speed, urban MRAP called the Cheetah that can get into areas that no competitors bigger, slower and heavier MRAP's can get into. If anything this company put money on the line to save lives before even knowing they would get a contract. They anticipated the need. They deserve thanks and congratulations. They were the only company the military could turn to in the past and deserve sole sorce awards for their vehicles which are cheaper and have preformed better than competitors vehicles so far. The military should be ordering all they can from this company, in fact they should be telling other companies use Force Protections designs and make these vehicles as fast as possible. Bottom line Force Protections innovations were saving lives when other companies were waiting for design and development moneys before coming up with a vehicle. This company designed these life saving vehicles with their own money because they saw the need to protect our troops. The people who work for Force Protection are Patriots and should be treated as such.

Hey, Force Protection has a remarkable story with their product, vehicles that are built with v-shaped hulls to lessen blast damage from IED or roadside bombs. These arent up-armored hummvees.

This company is not "clearly subpar". that is laughable. they cant crank out enough of these vehicles. Last year, FRPT was sole sourced because Marines in IRaq said "I want this vehicle ASAP". THey have been going nuts for these vehicles since before last year.

but it isnt sole sourced now. its been competing since january with 8 other companies for the MRAP program. not all orders have been for FRPT vehicles.

The CEO did just resign in June i think and this may be why. go to yahoo finance and search for FRPT, you will get every darn story on them since last summer, when the stock was at $6.

THe story above makes it sound like FRPT sells armor kits, and that they deliver incomplete products. not written accurately. FRPT may be guilty of slow production though. Dont get all progressive on them because of that.

disclaimer: i owned FRPT stock for a time back in January (based on a tip i got from a Marine contracting officer stationed in Qatar in the fall 2006).