BAE Systems Protest of Army Contract Upheld

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For now, at least, the BAE Systems plant is still alive.

The federal government's General Accountability Office has determined to uphold the protest conducted by Navistar and BAE Systems about the awarding of the defense contract to Oshkosh. They determined that the “Army's evaluation was flawed” and the proposals must be re-evaluated. However — and this is important — they denined many of the challenges made by BAE Systems, including challenges to Oshkosh's price.

What this means is that the contract is not necessarily staying here in Texas — but there's still a chance. BAE Systems is now getting a fair chance at the bid, something they didn't have before due to Michael McCaul's gross negligence. Thankfully, with the help of Democrats like Chet Edwards and Bill White, BAE Systems will get another swing at the contract.

From the Bill White blog about this last week:

Last week, a day before his announcement, Bill put politics aside and joined forces with Sen. Kay Bailey Hutchison to fight for an Army contract that could jeopardize more than 10,000 jobs (direct and indirect) and have economic impact of 1.8 billion annually to Southeast Texas region.

Bill said after the 90-minute meeting, “When it comes to matters affecting Texas, we put politics aside. That's who Texans are, at our best. Obviously, there are some who play by different rules, but that's who we are.”

I'm still reading news reports as it comes out. I'll post something more this afternoon, once I get more details. For now, here's the official statement from the GAO:

We recommended that 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. 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. We further recommend that Navistar and BAE be reimbursed the costs of filing and pursuing the successful grounds of their protests related to their challenge of technical and past performance evaluation issues, including reasonable attorney fees. By statute, the Army has 60 days to inform our Office of its actions in response to our recommendations.

Navistar Defense, LLC, of Warrenville, Illinois, and BAE Systems, Tactical Vehicle Systems LP, of Sealy, Texas, protested the award of a contract to Oshkosh Corporation, of Oshkosh, Wisconsin, under request for proposals (RFP) No. W56HZV-09-R-0083, issued by the Department of the Army, U.S. Army Tank-Automotive and Armaments Command, for production of the family of medium tactical vehicles (FMTV). Navistar and BAE challenged the Army’s evaluation of the offerors’ technical and price proposals, and contend that the selection decision was flawed.

The Army received proposals and conducted negotiations with Oshkosh, Navistar, and BAE. The agency selected Oshkosh’s proposal for award on August 26, 2009, and Navistar and BAE each filed a protest with our Office on September 4 and 5, respectively, with each supplementing its protest several times thereafter. In accordance with our Bid Protest Regulations, we obtained a report from the agency and comments on that report from Oshkosh, Navistar, and BAE. Our Office also conducted a hearing on November 9 and 10, at which testimony was received from a number of Army witnesses about the record. Following the hearing, we received further comments from the parties, addressing the hearing testimony as well as other aspects of the record.

Our decision should not be read to reflect a view as to the merits of the firms' respective approaches to produce the FMTV. Judgments about which offeror will most successfully meet governmental needs are largely reserved for the procuring agencies, subject only to such statutory and regulatory requirements as full and open competition and fairness to potential offerors. Our bid protest process examines whether procuring agencies have complied with those requirements.

The decision was issued under a protective order because the decision contains proprietary and source selection sensitive information. We have directed counsel for the parties to promptly identify information that cannot be publicly released so that we can expeditiously prepare and release, as soon as possible, a public version of the decision.”

Will post more as it develops…

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About Author

Phillip Martin

Currently the Research and Policy Director for Progress Texas and the Texas Research Institute, Phillip Martin writes occasional long-form pieces for BOR that promote focused analysis and insight into Texas politics. Born and raised in Austin, Phillip started working in politics in 2003 and started writing on BOR in the summer of 2005. Phillip has worked for the Texas Democratic Trust, the Texas Legislative Study Group, and now the Progress Texas family. He is a lifelong Houston Astros fan, a loyal Longhorn, and loves swimming at Barton Springs Pool.


  1. mccaul came through
    from all i've read about this, the army's take seemed messed up from the beginning, oshkosh's desire to build the FMTV was not dealing in the real world.  mccaul stood up and took a strong position with the folks in sealy and based on this ruling, they will get a fair shot at the contract.

    give credit where credit is due: in the end bae's proposal will be heard, this was not an accident, mccaul and other leaders came through for these workers.  

    • McCaul came through out of luck…
      He had to pull in other leaders to help him in the end.  He was lucky they were there.

      You could say McCaul is passing as a representative, but we can still do better than passing.

    • BOR
      We understand BOR is a liberal blog, but how can you maintain any credibility by suggesting that Bill White and Chet Edwards are the heroes and that McCaul dropped the ball?  Fact is both sides came together and set politics aside for the better good.  How narrow-minded it is to base McCaul's so-called “negligence” on a Washington political operative unable to find contact between McCaul and DOD.  

      Contracts are awarded on the merits it would not have been appropriate for a member of congress to intervene during the procurement process.  I don't think any private company would look kindly upon the government (member of congress) intervening unsolicited into their business, as typically there is a protocol of the constituent requesting action from their representative.  Why don't you ask BAE what it thinks of McCaul's actions since BAE is the constituent?


      • Who is “We”
        You say “we” understand BOR is a liberal blog. Who is “we”?

        If you can show me any proof of McCaul doing any meaningful work prior to the announcement that BAE Systems was going to lose the contract, by all means. My knowledge of the procurement process comes from case studies I read while taking various negotiations and policy courses at grad school. From everything I've learned, McCaul absolutely screwed this up — in so much that there is no history, none, of his working with BAE to secure this contract prior to when it was lost.

        As I wrote, this is great news for Texas, and I'm glad that McCaul finally got his act together and brought in some more experienced and intelligent Democrats to help him out. Hopefully, in the 11 months before he gets defeated at the polls, he will serve his district better because of this experience.

  2. A Letter From BAE Today States:
    After all of the allegations against Congressman McCaul, BAE, the constituent in the best position to know McCaul's involvement, released this letter to the editors of several papers today:


    In light of the GAO's decision to uphold a key aspect of BAE Systems' protest of the Family of Medium Tactical Vehicle contract, I wanted to take a moment to thank our community for the remarkable support we have received over the last 17 years. While it's too early to speculate exactly what this decision means for our business, we look forward to working with the Army to ensure the continued production of FMTVs and discussing options for delivery of these vehicles beyond our current contract.

    One of the most important and inspiring outcomes of this protest period is the amazing support we have received from our friends and neighbors. On behalf of the more than 3,000 employees at our Sealy plant, I wanted to offer my sincere thanks to the Sealy FMTV Task Force, the Greater Houston Partnership and the hundreds of individuals who have rallied on our behalf. We also appreciate the vigorous activity by elected officials across Texas.

    Specifically, I wanted to thank Sealy's U.S. Congressional Representative Michael McCaul for his ongoing and steadfast support. Congressman McCaul has worked with us tirelessly and always maintained an open door policy with him and his staff. We have enjoyed hosting the Congressman and his staffers on numerous occasions, including several visits to our facilities over the past years. Even before the Army's decision to recomplete the FMTV contract, we met with Congressman McCaul's staff in his Washington office on a number of occasions to discuss the FMTV situation and other BAE Systems programs. Our offices could not have been more engaged, and we are proud to have such a strong ally on Capitol Hill.

    It is an honor to be part of this extraordinary community who shares our commitment to America's men and women in uniform.

    Dennis Morris

    President, Global Tactical Systems

    BAE Systems

    Houston, Texas

    It's great to see that Congressman McCaul is continuing to work hard for his constituents in TX-10.

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