By Ann Roosevelt
BAE Systems and Navistar Defense LLC yesterday lauded the Government Accountability Office (GAO) decision to uphold their protests of the Army award to Oshkosh Corp. [OSK] of the Family of Medium Tactical Vehicles (FMTV) potential $3 billion competitive rebuy.
The FMTV rebuy program is to produce as many as 23,000 vehicles and trailers, support services and engineering. FMTV consists of up to 23 variants and 17 different models.
GAO upheld the protests, saying the Army award was flawed, and recommending a reevaluation of proposals in specific areas. And if, at the end of the process, Oshkosh is not found to have the best value for the Army, then the contract should be terminated. Army leaders are reviewing the decision at this time.
Specifically, GAO found the source selection process flawed: “with regard to the evaluation of Oshkosh’s proposal under the capability evaluation factor, and the evaluation of Navistar’s past performance,” Michael Golden, GAO’s managing associate general counsel for procurement law, said in a statement.
However, GAO also denied “a number of Navistar’s and BAE’s challenges to the award to Oshkosh, including challenges to the evaluation of Oshkosh’s price”–a strong point with BAE.
GAO recommended the Army “reevaluate the offerors’ proposals under the capability evaluation factor, in a manner consistent with the terms of the solicitation; conduct a new evaluation of Navistar’s past performance that adequately documents the agency’s judgments; and make a new selection decision,” Golden said. “We also recommended that if, at the conclusion of the reevaluation, Oshkosh is not found to offer the best value, the agency should terminate Oshkosh’s contract for the convenience of the government.
The Army now has 60 days to respond to GAO’s recommendations.
Navistar Defense President Archie Massicotte said, “We welcome [Monday’s] ruling and we will wait for further direction from the Army regarding what may be required of us moving forward.”
In a statement, Bob Murphy, president of BAE’s Land & Armaments group, said: “We look forward to reviewing the full GAO report and its recommendations so we can fully consider the implications for our business and our options for moving forward.”
BAE was the incumbent, building FMTV trucks and variants for 17 years in Sealy, Texas. Dennis Morris, president of BAE Global Tactical Systems, said: “Our current bridge takes production through 2010, but decisions need to be made by this spring to sustain uninterrupted FMTV production into 2011.
The Texas congressional delegation weighed in heavily in support of BAE, while the Wisconsin delegation did the same for Oshkosh (Defense Daily, Oct. 6, 16, Nov. 20).
With the GAO decision, Rep. Michael McCaul (R-Texas), who led a bipartisan effort supporting BAE, said: “this is a great day for BAE, its employees and for Texas…Based on the GAO’s ruling they [BAE] should get a fair shot at a new and fair competition.”
Sen. John Cornyn (R-Texas) called on the Army to “quickly implement the GAO’s recommended course of action. I am optimistic that the re-evaluation of these bids will enable thousands of proud Texans to continue producing world-class tactical vehicles for the American warfighter at the state-of-the-art BAE Systems production facility, which has consistently met and exceeded standards for efficiency and quality.” Cornyn said.
Sen. Kay Bailey Hutchison (R-Texas) said, “I’m pleased to hear that the GAO has agreed with my assertion that the Army’s contracting process was flawed…The Pentagon must now conduct a full and thorough inquiry and rebid this contract in which the Army truly obtains the best value for taxpayers and our soldiers.”
On Dec. 4, Sens. Hutchison and Cornyn urged Army Secretary John McHugh to reconsider the service’s decision on FMTV, saying they could block the confirmation of Malcolm O’Neill as the next assistant secretary of the Army for acquisition, logistics, and technology if the service does not reconsider its FMTV award. The Senate is slated to take up O’Neill’s nomination Thursday (Defense Daily, Dec. 9).
Morris said the company is confident its workforce in Texas and Michigan would put it “in the very best position to compete successfully for continued FMTV production, especially since the new Long-Term Armor Strategy cab is our design.”
Morris also expressed gratitude to the Texas community that rallied behind the company and its workforce: the Sealy FMTV Task Force, the Greater Houston Partnership and state and federal elected officials.
The Sealy FMTV Task Force, watching the decision closely, issued a statement saying in part, “We are not finished yet and await the Army and DoD’s next action,” Task Force Co- Chair Lance LaCour said. “There are still numerous questions that were raised in our Washington meeting with the Army that haven’t been answered,” said Task Force Co-Chair Kim Meloneck. “In fact, we have a very important Task Force meeting tomorrow to discuss these questions and issues.”
Robert Bohn, Oshkosh Corp. chairman and CEO, said the company welcomed the GAO review and coming Army reevaluation of two issues. “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. It is important to realize that today’s decision did not recommend proposal revisions nor did it recommend termination of our contract.”
Bohn added, “We believe that when these narrow issues are reconsidered, the Army’s decision to award Oshkosh Corporation the FMTV contract will be maintained.”
Meanwhile, Oshkosh continues to use its own funds preparing for the construction of a new paint facility at the Oshkosh, Wis., campus in support of FMTV production and potentially other programs (Defense Daily, Oct. 9).
The GAO decision also recommends the Army reimburse BAE and Navistar for the costs of filing and pursuing the protest. This includes “reasonable” attorney’s fees.
The Army awarded Oshkosh FMTV contract in August (Defense Daily, Aug. 28). BAE and Navistar separately filed protests in early September and added supplemental protest filings (Defense Daily, Sept. 9, 17). GAO also conducted a hearing Nov. 9 and 10.
The full GAO FMTV decision will not be publicly released. It falls under the protective order since it contains proprietary and source selection-sensitive information that remains confidential in perpetuity. However, once such information has been redacted, a public version of the decision will be released.