Army Contract Deal 'Flawed,' Says GAO; Orders New Evaluation of Bids

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Government auditors have recommended a do-over of a hotly disputed contract award to build Army trucks, prolonging a battle between Texas and Wisconsin lawmakers over which state takes home the $3 billion deal and the jobs that go with it.

The Government Accountability Office this week upheld a protest of the award filed by BAE Systems, which had built the trucks in Sealy, Texas, for 17 years but lost the contract in August to a dramatically lower bid by Wisconsin-based Oshkosh Corp.

The GAO agreed with the central complaint in the protest that the Army did not fully evaluate the capability of Oshkosh to produce the trucks, known as the Family of Medium Tactical Vehicles, or FMTVs. The auditors recommended the Army re-evaluate the bids and rescind the Oshkosh contract if it is not the best value.

FMTVs are made up of a variety of 2.5-ton and 5-ton trucks, including troop transport vehicles, cargo trucks, wreckers and tankers. The Army uses these vehicles for combat support and combat service support.

The GAO also upheld a protest by Illinois-based Navistar International, a third bidder in the competition, which complained that the Army did not adequately evaluate its past performance as a defense contractor. It was recommended that the Army correct that mistake in reviewing the bids from the three companies.

Our review of the record led us to conclude that the Army's evaluation was flawed with regard to the evaluation of Oshkosh's proposal under the capability evaluation factor, and the evaluation of Navistar's past performance, said Michael R. Golden, GAO's managing associate general counsel for procurement law.

He stressed that the recommendation to review the bids did not signal an endorsement of the firms' respective approaches to produce the FMTV.

The contract is a boon for Oshkosh, which already produces medium and heavy tactical vehicles for various branches of the U.S. military. For British-based BAE, losing the FMTV deal is a painful setback and threatens job losses for 3,000 workers at its Sealy plant and for other workers in its Michigan plant. …