A prototype of the 8x8 Dragon vehicle in the San Gregorio maneuvering ground near Zaragoza. Spain’s defense ministry has rejected Santa Barbara’s offer to produce the vehicles, and is expected to shortly re-open the competition.
A prototype of the 8x8 Dragon vehicle in the San Gregorio maneuvering ground near Zaragoza. Spain’s defense ministry has rejected Santa Barbara’s offer to produce the vehicles, and is expected to shortly re-open the competition.

Spanish Government Cancels €2.1 Billion Piranha 5 Contract

PARIS – Spain’s acting Minister of Defense, Margarita Robles, announced on Thursday that the Government will re-compete the €2.1 billion contract to produce 348 Vehiculo de Combate sobra Ruedas (VCR) wheeled combat vehicles, after having rejected the offer submitted by Santa Bárbara which breached technical and economic requirements.

During a visit to the Spanish Air Force’s Ala 12 fighter wing, Robles explained that the VCR program is going to be opened to public tender so that any company can opt to compete, and emphasized that the Government will give it “the highest priority.”

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“This is a program that will not fall into oblivion, but next year we will give it more momentum and more strength,” Robles said, adding that the government deeply feels “that a company like Santa Barbara, has backed down at the last minute, and has not fulfilled the contract.”

“There has been no breach of Santa Barbara Systems because there is no contract, just an offer request,” a company source told Defense-Aerospace.com on Friday. “It cannot be said, therefore, that Santa Barbara Sistemas has backed down. It has presented an offer that responded to the technical requests contained in the specifications and to the economic requirements, and that it what has been rejected.”

“We understand that there is an insufficient budget to cover the scope and the solutions defined in the specifications,” the source added.

Robles reiterated the “firm, clear and unequivocal commitment on the part of the Government” to ensure “that the Army has a safe vehicle, because this will be good not only for the Army, but for Spanish industry and for employment as well.”

The Piranha 5 was selected as the winner of the Army’s Vehiculo de Combate sobra Ruedas (VCR) 8×8 wheeled combat vehicle competition. Spain’s Council of Ministers on July 12 approved the acquisition of 345 of the vehicles at a cost of €2,083.2 million euros, but this was only the first phase of a program that ultimately planned to acquire 998 vehicles at a cost of €3,836 million.

At the time, the Council of Ministers designated the Santa Bárbara Sistemas company, a wholly-owned subsidiary of General Dynamics European Land Systems, as the main contractor, as it was “the only company with sufficient industrial capabilities to carry out the contract,” and because of national security reasons contract negotiations were to be carried out without the normal publicity requirements. Mowag, the maker of the Piranha 5, is also owned by GD European Land Systems; Indra and SAPA sere selected as the main subcontractors.

It was expected that the negotiations would be completed by year-end, but the Army’s procurement arm, the General Directorate of Armament, rejected Santa Barbara’s offer and considered it “not acceptable” for various technical, operational and economic reasons.

Santa Bárbara Sistemas continues and will continue to look for alternatives to achieve the 8×8 VCR contract,” the company source said, “and is prepared to guarantee the most competitive offer possible in any type of tender,” but also cautioned that re-running the tender, which is not a legal necessity, would, “at the very least, extend the execution deadlines.”

A prototype of the 8x8 Dragon vehicle in the San Gregorio maneuvering ground near Zaragoza. Spain’s defense ministry has rejected Santa Barbara’s offer to produce the vehicles, and is expected to shortly re-open the competition.
A prototype of the 8×8 Dragon vehicle in the San Gregorio maneuvering ground near Zaragoza. Spain’s defense ministry has rejected Santa Barbara’s offer to produce the vehicles, and is expected to shortly re-open the competition.
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