Vehicle maker wins Iraqi Army deal, rushes to expand production.

Arecent Defense Department contract to acquire more than 1,000 "mine-protected" armored vehicles for the Iraqi Army has prompted the manufacturer to both expand its internal production capacity and seek outside help.

The vehicle the Pentagon chose for the Iraqi Army, the Cougar, is in high demand today both by the U.S. and the U.K. militaries, particularly by explosive-ordnance units in Iraq and Afghanistan. It is designed with a V-shaped hull to deflect the force of explosions away from passengers.

The Pentagon agreed to purchase 378 "Iraqi light armored vehicles" by 2009, at a cost of $181 million. The Iraqi vehicle will be a variant of the Cougar "series H" models.

The manufacturer of the vehicle--Force Protection Inc. of Ladson, S.C.--meanwhile, received additional Cougar orders from the Marine Corps and the United Kingdom. The Iraqi Army's contract has options for up to 1,050 vehicles.

The company announced in August that it would seek to expand its manufacturing capacity. It produced 11 Cougars for the U.S. military during the month of July--one vehicle short of what it was expected to deliver. "We have worked diligently to expand our facilities and methods to accommodate increasing demand for our vehicles," said Force Protection CEO Gordon McGilton.

"We've made consistent progress in increasing production rates in the past nine months," he said in a statement. "Although we were one Cougar short of our expected output for July, we've made the necessary adjustments that will enable us to hit our goals in the fall."

The rapid surge in the demand for the Cougar also prompted Force Protection to partner with a much larger defense contractor, BAE Systems. Under the terms of the deal for the Iraqi Army vehicle, BAE was designated as the prime contractor and Force Protection is one of two subcontractors--the other being Spartan Chassis Inc. of Charlotte, Mich.

The contractor arrangement stirred speculation earlier this year that Force Protection may not be able to build sufficient manufacturing capacity to handle the Cougar orders on its own.

That concern precisely is what drove Force Protection to team with BAE, company officials said. BAE is the largest European defense company and ranks among the Pentagon's top l0 contractors.

"This is a big order which could potentially be a distraction to a young company," said Jeffrey Child, a spokesman for Force Protection.

"Force Protection thought it appropriate to team with a mature, proven manufacturer, knowing that the prime contractor would take responsibility to set up additional production lines, purchase raw materials and allow Force Protection to focus on building quality hulls and ensuring quality inspections," Child said in a statement to National Defense.

Dean Lockwood, a military analyst at Forecast International, speculated that Force Protections decision to align with BAE would allow for supplementary production of the Cougar in South Africa, where BAE Systems Land Systems South Africa manufacturers the RG-31 mine-protected armored vehicle.

"BAE may pick up part of the production line," Lockwood said. "Maybe that's the real reason the contract went to BAE" and Force Protection was made a subcontractor.

Lockwood noted that at last year's Association of the U.S. Army annual exhibition, BAE had a Cougar on display.