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BAE gets a reprieve from the GAO

The Government Accountability Office has set aside the Army’s decision to award a $2.6 billion contract to build combat trucks to Oshkosh Systems, giving at least a temporary victory to BAE Systems of Sealy, which currently has that contract.

Michael R. Golden, GAO’s managing associate general counsel for procurement law, announced that his agency had “sustained or upheld the protests” lodged by BAE Systems and Navistar, rivals for the contract that had been awarded to Oshkosh Corp. “The Army’s evaluation (of the contract proposals) was flawed with regard to the evaluation of Oshkosh’s proposal.”

Golden said GAO recommended that the Army “make a new selection decision.”

The official added: “We also recommended that if at the conclusion of the re-evaluation Oshkosh is not found to offer the best value, the agency should terminate Oshkosh’s contract for the convenience of the government.”

Background on this story is here, here, and here. A statement from BAE Systems is beneath the fold. It must be noted that this doesn’t mean BAE will retain the contract. It just simply means the Army needs to take another look at how it made its decision and have another go at it.

The GAO decision is limited in scope and does not recommend that the Army reopen the competition for the truck contract, but rather reevaluate the bids the three companies originally submitted. It says the Army should reevaluate the three bids based on the “capability factor,” and also that it should conduct a new evaluation of Navistar’s past performance on contracts.

The GAO denied BAE’s challenge regarding the evaluation of Oshkosh’s price.

“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,” Michael Golden, GAO’s managing associate general counsel for procurement law, said in a statement.

“We 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,” Golden said.

After the Army reevaluates based on GAO’s recommendations it would have to issue a new solicitation decision. The GAO recommends that if at the conclusion of the reevaluation 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 how it will proceed based on the recommendations provided.

So the Army could re-run the numbers and decide that Oshkosh is still the best bet. Or, if they throw everything out and start all over, Oshkosh could submit a different bid that still wins. BAE is still in the running, but in effect it’s been granted a new trial, not a directed verdict. BOR has more.

BAE Systems Responds to U.S. Government Accountability Office’s Family of Medium Tactical Vehicles Protest Ruling

HOUSTON, Texas – The U.S. Government Accountability Office (GAO), the investigative arm of Congress, today informed BAE Systems that it has ruled in favor of a key element of the company’s protest to the U.S. Army’s Family of Medium Tactical Vehicles (FMTV) rebuy contract. In reaching this decision, the GAO said: “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, […].”

The GAO recommends the following actions be taken by the Army in the flawed FMTV rebuy award decision: “We recommend that the Army: reevaluate the offerors’ proposals under the capability evaluation factor, in a manner consistent with the terms of the solicitation, […] and make a new selection decision.”

By statute, the Army now has 60 days to inform the GAO of its actions in response to the GAO’s recommendations.

Bob Murphy, president of BAE Systems Land & Armaments group, said, in response to GAO’s ruling:

“BAE Systems is pleased with GAO’s acknowledgement of a key point raised in our protest. 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.

“This ruling is potentially good news for our over 3,000 employees in Texas and Michigan, who have built more than 56,000 FMTV vehicles for our nation’s soldiers. We look forward to working with the Army to agree a way forward. In the meantime, we will endeavor to work with our customer to ensure the continued production of FMTVs for our men and women in the armed forces.”

Dennis Morris, president of BAE Systems Global Tactical Systems, said:

“We are confident that our skilled and experienced workforce in Texas and Michigan will put us in the very best position to compete successfully for continued FMTV production, especially since the new Long-Term Armor Strategy cab is our design.

“Our current bridge takes production through 2010, but decisions need to be made by this spring to sustain uninterrupted FMTV production into 2011. Our workforce remains focused and committed to providing our men and women in uniform with the world’s safest, most reliable medium tactical vehicles.

“We are extremely grateful for all the support we received from the Texas community, the Sealy FMTV Task Force, the Greater Houston Partnership and our state and federal elected officials as they stood alongside us throughout this protest period.”

For further information, please contact:

Mike Teegardin, BAE Systems
Tel: +1 281 616 6112 Mobile: +1 281 450 9652
[email protected]

Lisa Hillary-Tee, BAE Systems
Tel: +1 703 312 6157 Mobile: +1 571 296 8237
[email protected]

www.baesystems.com

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