By Roxana Tiron The Hill
The Government Accountability Office (GAO) on Monday upheld protests filed by BAE Systems & Navistar against the Armys award of an estimated $3 billion armored truck contract to Oshkosh Corp. BAE which has been building the trucks for years will continue to produce trucks under the previous contract until the end of next year.
GAOs decision could allow BAE Systems Land and Armaments in Sealy Texas to continue producing the Armys Family of Medium Tactical Vehicles (FMTV). It could also help BAE avoid laying off about 3000 workers at the plant.
BAE lost the contract in August to Wisconsin-based Oshkosh Corp. and filed a protest in September. Defense analysts consider it extremely rare for an incumbent company not to be awarded a renewed contract.
Navistar also competed for the lucrative contract and filed a protest against the Armys award at the same time. The GAO likewise upheld that protest.
The GAO decision is limited in scope and does not recommend that the Army reopen the competition for the truck contract but does call on it to re-evaluate the bids the three companies originally submitted.
While Navistar stayed quiet about its protest BAE Systems and Oshkosh publicly fought in a battle that engulfed the Texas and Wisconsin delegations for months.
Texas Sens. Kay Bailey Hutchison and John Cornyn both Republicans threatened to hold up the confirmation of the Armys new acquisition chief over the truck contract.
Hutchison and Cornyn on Monday hailed GAOs decision.
GAOs decision is welcome news for the town of Sealy and the employees of BAE as well as for American taxpayers. Im pleased to hear that the GAO has agreed with my assertion that the Armys contracting process was flawed" Hutchison a defense appropriator said in a statement.
She called on the Pentagon to conduct a full and thorough inquiry and rebid this contract in which the Army truly obtains the best value for taxpayers and our soldiers."
Meanwhile Cornyn expressed optimism that once the Army re-evaluates the companies bids BAE Systems will come out on top.
Sealy is in the district of Rep. Michael McCaul (R) who has been at the forefront of the fight.
I want to thank the members of the Texas delegation who worked with me in a bipartisan way to make sure BAEs appeal was heard" McCaul said in a statement.
We believe that our FMTV offer was and continues to be the best value for the U.S. Army our troops and the U.S. taxpayer" Oshkosh CEO Robert Bohn said in a statement.
Oshkosh operates in GOP Rep. Tom Petris (R-Wis.) district. In a statement issued Monday he did not challenge the GAOs decision. He expressed confidence in Oshkosh saying the company has years of experience and a strong reputation."
An Army spokesman said Army leaders were reviewing the GAOs decision.
The GAO recommended that the Army re-evaluate the three bids based on the capability factor" and that it conduct a new evaluation of Navistars past performance on contracts.
Defense consultant Jim McAleese said capability can range from facilities equipment existing workforce suppliers production critical-path and quality assurance.
Our review of the record led us to conclude that the Armys evaluation was flawed with regard to the evaluation of Oshkoshs proposal under the capability evaluation factor and the evaluation of Navistars past performance" Michael Golden GAOs managing associate general counsel for procurement law said in a statement.
After the Army re-evaluates based on GAOs recommendations it would have to issue a new solicitation decision. The GAO recommends that if at the conclusion of the re-evaluation the Army finds that Oshkosh does not offer the best value" the Army should terminate the current Oshkosh contract.
The Army has 60 days to inform the GAO of how it will proceed based on the recommendations provided.
The GAO denied BAEs challenge regarding the evaluation of Oshkoshs price.
BAE publicly called into question whether Oshkosh could fulfill its aggressive bid for the FMTV or carry the associated financial risk.
Under Oshkoshs contract the government pays a fixed price and any cost overruns would be incurred by the firm. BAE officials said that Oshkoshs bid on the fixed-price contract was too low to be workable.
BAE argued that Oshkoshs proposed price for the FMTV came in almost $1 billion lower than the Armys overall funding estimate of $3.9 billion according to a supplement filed to its original protest.
Bohn said his company welcomes the Armys re-evaluation of the two narrow issues" it recommended be reconsidered.
We believe that when these narrow issues are reconsidered the Armys decision to award Oshkosh Corp. the FMTV contract will be maintained." Chris Chambers BAEs vice president and general manager of its Sealy plant said in an interview with The Hill last month that his company was certain" Oshkoshs bid for the FMTV was unrealistic."
Chambers said BAE bid more than 20 percent below the price it now receives from the Army on the FMTV while Oshkosh came in 13 percent below BAEs new bid.
BAE officials welcomed GAOs decision Monday.
This ruling is potentially good news for our over 3000 employees in Texas and Michigan who have built more than 56000 FMTV vehicles for our nations soldiers" said Bob Murphy president of BAE Systems Land & Armaments group.
Dennis Morris president of BAE Systems Global Tactical Systems expressed confidence that the skilled and experienced workforce in Texas and Michigan" will put BAE in the very best position to compete successfully for continued FMTV production."
BAE hired the powerful law firm Wiley Rein LLP to help with the GAO protest. Thats the same company that worked with Boeing Co. on its successful protest of the Air Forces $35 billion refueling tanker contract.
Oshkosh holds the contracts for the Armys heavy mobility tactical trucks and for the Marine Corpss medium tactical vehicles as well as a large contract for all-terrain mine-reistant vehicles for Afghanistan.
If the company loses out on the FMTV the implications of that loss would only be felt in the outlook for 2011 when the ramp-up in production for the Army trucks is expected to happen.
The Government Accountability Office (GAO) on Monday upheld protests filed by BAE Systems & Navistar against the Armys award of an estimated $3 billion armored truck contract to Oshkosh Corp. BAE which has been building the trucks for years will continue to produce trucks under the previous contract until the end of next year.
GAOs decision could allow BAE Systems Land and Armaments in Sealy Texas to continue producing the Armys Family of Medium Tactical Vehicles (FMTV). It could also help BAE avoid laying off about 3000 workers at the plant.
BAE lost the contract in August to Wisconsin-based Oshkosh Corp. and filed a protest in September. Defense analysts consider it extremely rare for an incumbent company not to be awarded a renewed contract.
Navistar also competed for the lucrative contract and filed a protest against the Armys award at the same time. The GAO likewise upheld that protest.
The GAO decision is limited in scope and does not recommend that the Army reopen the competition for the truck contract but does call on it to re-evaluate the bids the three companies originally submitted.
While Navistar stayed quiet about its protest BAE Systems and Oshkosh publicly fought in a battle that engulfed the Texas and Wisconsin delegations for months. 
