BAE protests FMTV Oshkosh award

Just FYI for any FMTV fans...just thought I'd post this article. Enjoy.

BAE Systems has protested against the Pentagon's decision to award a USD3.7 billion US Army family of medium tactical vehicles (FMTV) contract to its rival Oshkosh, saying its proposals were not properly assessed.
BAE Systems said in a statement on 8 September that it has asked the US Government Accountability Office (GAO) to review the latest FMTV procurement decision, which was announced on 27 August.

A spokesman for Oshkosh told Jane's on 8 September that the company had been informed of the protest last week by US Department of Defense (DoD), but added: "Until we know further details, we really can't comment."
BAE Systems' President of Land & Armaments, Linda Hudson, said in a statement: "After examining the Army's process, we believe there are strong indications the service did not conduct its evaluation in accordance with the criteria detailed in the RFP [request for proposals]".
BAE Systems protests FMTV award to Oshkosh

"Sour grapes" or they are pissed off because they have lost their place at the public feeding trough.

Anytime that amount of money is at stake the loser is going to carp about it.

Funny, I kinda like it.

They better get it figured out - that's my great grandkids surplus!

So if an american company can build it for less or close to what a british company can, the american company should always get the bid.

That is a HUGE plant right west of Houston that might go bye bye . . . Too bad, so sad, remember the thrown driveshaft issue and on and on, no such complaints with Oshkosh b'gosh.

Tnrobocop said:

So if an american company can build it for less or close to what a british company can, the american company should always get the bid.

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The problem with the way that DoD is issuing these contracts is that it's and all or nothing approach.

While BAE may be a British incorporated company, they build the FMTV at the old S&S plant in the Houston Texas area.

Boeing also protested the aerial refueling tanker contract given to the Northrup Grumman / EADS team which is owned by 5 European countries.

The US procurement process was flawed for years giving US companies favor over foreign competition. The foreign governments were sharing in development costs and not receiving what they thought to be their fare share. i.e. F-22 and F-35 aircraft come to mind.

Does Oshkosh build a great truck? Damn strait. I would love to own one of their Snow thrower trucks and if us mortals were allowed to own current production armored vehicles I'd have one in a heart beat (lend me a 1/4 million please).

But in the DoD world or all or nothing, every company is going to protest a large contract award.

See...this is what it has come to! WTF Over?

In my humble opinion...American war machines...of all types...should be made by Americans.
And yes...i do understand that it's getting harder and harder to figure out if a company is actually owned by Americans.

This outsourcing BS has cost us too many jobs and too much money and our new vehicles look like European chit.

If we can "bailout" mismanaged auto makers with billions of dollars that use foreign parts to make "American" autos...we can dam sure come up with 3.7 billion for American made military vehicles!
The test....prove that your company is 100% American owned and operated by 100% Americans and that you will use 100% American made steel, parts, tires etc...and we...America will make dam sure you get the contract to build them.

All others should suck eggs!! I know...I'm getting older...and still dream....

DUG said:

They better get it figured out - that's my great grandkids surplus!

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I doubt it. Our deuces and 5tons will be around long after those techno euro trucks have crumbled to dust. Your grandkids will be able to row the gears on an ancient spicer, releasing huge clouds of carbon, and enjoy the defening roar of classic US military hardware.

bassetdeuce said:

Your grandkids will be able to row the gears on an ancient spicer, releasing huge clouds of carbon, and enjoy the defening roar of classic US military hardware.

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I wouldn't count on that either. Mainly due to the "carbon" part of it. If we remain on our current course by the time I have grandkids the only deuces you'll see will be static displays .

The inital post was a short excerpt, since I don't subscribe to janes.com. Here is the full story from a free site. There is a lot more to the ongoing FMTV saga. The plot continues to thicken!!

UPDATE 1-OshKosh stops work on US Army trucks after protest - Forbes.com

OshKosh stops work on US Army trucks after protest
* Oshkosh must stop work on big Army truck contract
* GAO to rule on losing bidders' protests by Dec. 14
* BAE says Army did not properly evaluate the bids (Adds details of protests, byline, analyst comments)

WASHINGTON, Sept 8 (Reuters) - OshKosh Corp said on Tuesday that it received a stop-work order from the U.S. Army on a multibillion-dollar truck contract after two losing bidders, Britain's BAE Systems PLC and Navistar International Corp, filed protests last week.
Oshkosh won the five-year contract for the Army's Family of Medium Tactical Vehicles (FMTV) on Aug. 27, unseating incumbent BAE Systems in a deal valued by analysts at around $2 billion.
The fixed-price deal calls for Oshkosh to build up to 23,000 vehicles and trailers, and provide support services and engineering.
BAE -- which builds the current mid-size trucks at its Sealy, Texas plant -- and Navistar filed protests over the Army contract award last week with the Government Accountability Office, the congressional office that handles bid protests.
The GAO is due to rule on the issue by Dec. 14.
Oshkosh declined to comment on the protests, but said the Army told it to stop work on the program.
"Our customer informed us that protests on the FMTV contract have been filed and pursuant to the contract, we received a stop-work order. Until we know further details, we really can't comment," Oshkosh said in a statement.
Oshkosh had begun working on the first delivery order under the contract, a deal valued at $281 million for production and delivery of 2,568 trucks and trailers. Initial test vehicle deliveries had been planned for mid-2010, followed by delivery of production vehicles later that year.
In a research note titled, "Moan, moan, moan," Rob Stallard of Macquarie Securities said protests now appeared to be "standard practice for the industry."
Oshkosh shares were up 9 cents at $32.42 in mid-day trading.
BAE Systems, whose shares lost around 4 percent when the ruling was announced last month, said it decided to file the protest after carefully analyzing information supplied by the Army.
"After a detailed analysis of the information provided by the Army, the company believes that the Army did not properly evaluate the proposals," BAE said in a statement.
BAE will continue to produce FMTV vehicles for the Army until the end of 2010, but had planned for the contract to be extended.
Defense analyst Loren Thompson of the Virginia-based Lexington Institute, said the protests had a good chance for success, given that Oshkosh had underbid incumbent BAE by about 30 percent, even though it had not built the trucks before, lacked the workforce needed to complete the orders, and had no existing relationships with suppliers for the trucks.
"This could easily turn into a procurement scandal," Thompson said, questioning the Army's decision to consider the three bids equally low risk in terms of all factors except price, especially given concerns that heavily leveraged Oshkosh was facing bankruptcy after the collapse of demand for its commercial construction vehicles.
"I don't see any way that a company with Oshkosh's capabilities can substantially underbid the incumbent and come in on price and on schedule," Thompson said.
Jim McAleese, a Virginia-based defense consultant, said BAE urgently needed to win several large contracts to shore up shareholder support after losing the FMTV deal to Oshkosh, and a separate contract for lighter Mine Resistant Ambush Protected (MRAP) trucks being built for use in Afghanistan.
"The challenges to BAE are material," he said. (Reporting by Andrea Shalal-Esa and John Bowker, editing by Gerald E. McCormick and Maureen Bavdek)

This FMTV article is from a few week ago, but it's interesting because it helps explain how OshKosh can bid so low, but still make money. The profits come from the back end of course!

Oshkosh Beats BAE in Second U.S. Army Truck Contest

By Edmond Lococo

Aug. 27 (Bloomberg) -- Oshkosh Corp. won a U.S. Army contract to build the Family of Medium Tactical Vehicles, or FMTV, beating current maker and larger rival BAE Systems Plc for the second time in two months. Oshkosh shares surged.
The initial award for 2,568 trucks used to haul cargo, artillery and air defense systems in combat zones has a value of $280.9 million, Oshkosh, based in the Wisconsin city of the same name, said in a statement today.
The FMTV program may include as many as 23,000 vehicles over five years, Oshkosh said in the statement, without providing the total potential value. Production contracts alone would likely be valued at more than $4.5 billion and sales of spares and maintenance work could amount to even more than that, said Dean Lockwood, a military-vehicle analyst at Forecast International in Newtown, Connecticut.
“Trucks like these are the type the Army tends to drive into the ground,” Lockwood said in an interview today. “There is a lot of money to be made beyond the truck. There are all the spares and repairs and, when they can’t repair them any more, vehicle replacement. A contract like this is very lucrative.”
For that reason, a protest of the decision is very likely by BAE, Lockwood said. Scott Fazekas, a BAE spokesman, said the company is still considering its options as it reviews the Army’s decision.
Shares Climb
Oshkosh rose $6.65, or 24 percent, to $34.20 at 4 p.m. in New York Stock Exchange composite trading, the biggest increase since July 1. BAE fell 18 pence, or 5.6 percent, to 306 pence in London trading.
“The key to winning this contract and bringing it home was probably predicated on our price, our service, delivery and quality,” Oshkosh Chief Executive Officer Robert Bohn said today in an interview. “We’ve been known for a long, long time as a manufacturer that delivers on time and I think that helped us.”
He declined to comment on unit pricing for the vehicles. The FMTV is a series that includes 17 different models ranging from 2.5-ton to 5-ton payloads. Oshkosh will be manufacturing the same designs as BAE, Bohn said.
London-based BAE has held the contract to make the trucks since 1991 and has built more than 50,000 of the vehicles and trailers during that time. BAE’s current contract runs through the fourth quarter of 2010.
Program Loss
BAE had predicted about $2 billion in annual FMTV-related sales this year and next, which won’t be affected by the new contract, BAE said in a statement announcing the lost contract. The company said it had planned for FMTV sales to drop to less than $1 billion annually from 2011, and full implications of the loss of the program can’t immediately be assessed.
Ann Stawski, a spokeswoman for Oshkosh, declined to comment on the total potential value of all FMTV production.
Oshkosh on June 30 also beat out BAE on the contract to build all-terrain vehicles the U.S. military will use to protect troops in Afghanistan from roadside bombs. That order may be valued at $3.3 billion.
Oshkosh is ahead of schedule on deliveries of the all- terrain trucks in the first two months of the contract, Bohn said. Oshkosh delivered 46 of the MRAP All-Terrain Vehicles, or M-ATV, in July, one more than was required. This week it completed shipment of the 50 trucks required this month, he said.
Major Jimmie Cummings, a U.S. Army spokesman, said he couldn’t immediately confirm the Oshkosh FMTV award because the service hasn’t announced the winner yet.
To contact the reporter on this story

As an end user, I have always found Oskosh vehicles to have better initial quality that S&S provides. And Oskosh has given far, far better factory support.

Chief_919 said:

As an end user, I have always found Oskosh vehicles to have better initial quality that S&S provides. And Oskosh has given far, far better factory support.

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Chief, I worked overseas for a few years performing both flight test operations as well as product support for one of the big three aircraft engine makers.

We were able to capture business due to nothing more than product support.

One airline that wasn't even one of our customers at the time switched out their fleet of 10 aircraft after having to get a plane for a short term lease. The plane injested a few large birds on landing. I got a call to bore-a-scope the engine prior to allowing a return to service. From the time I got called to them being allowed to fly was less than 12 hours.

When an airline drops $140M on an aircraft the last thing they want to hear when they have a problem is that it's late call me in the morning.

I have a lot of contacts in the busniess and was able to get parts from other customers that had stock in order to get another customer back into service.

Oshkosh certainly once made good or great trucks. Their fire truck subsidiary also once made good trucks. The Firetrucks now at best are overpriced overrated. The program/budget fire trucks made in Fl are POS. Makes one wonder about everything else Oshkosh.

papabear said:

See...this is what it has come to! WTF Over?

In my humble opinion...American war machines...of all types...should be made by Americans.
And yes...i do understand that it's getting harder and harder to figure out if a company is actually owned by Americans.

This outsourcing BS has cost us too many jobs and too much money and our new vehicles look like European chit.

If we can "bailout" mismanaged auto makers with billions of dollars that use foreign parts to make "American" autos...we can dam sure come up with 3.7 billion for American made military vehicles!
The test....prove that your company is 100% American owned and operated by 100% Americans and that you will use 100% American made steel, parts, tires etc...and we...America will make dam sure you get the contract to build them.

All others should suck eggs!! I know...I'm getting older...and still dream....

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Uh, the FMTV was being built in Sealy, TX by Americans who were probably very proud to be making military vehicles for American soldiers. Yes, it's unfortunate that Tactical Vehicle Systems got bought by BAE. But does that REALLY make those American workers less American because they got bought out by foreign competition? I don't think they started importing brits to work on the assembly line.

Snarky it certainly does NOT make them any less American!!

I should have been more specific in my ranting.

I was complaining more about the Auto Makers..which is probably inappropriate here. Thanks for pointing that out.

NEIOWA said:

Oshkosh certainly once made good or great trucks. Their fire truck subsidiary also once made good trucks. The Firetrucks now at best are overpriced overrated. The program/budget fire trucks made in Fl are POS. Makes one wonder about everything else Oshkosh.

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The Oshkosh military products are first rate. I ahve just recieved several brand new HEMTT LHS trucks, and all are great.

I also recentlu got to play with the HEMMT fire truck- now there is a real beast!!

Well the next chapter has been written, BAE lost the appeal today, it looks like thousands of jobs will go from Sealy, TX to Oshkosh, WI. This was breaking news tonight in Houston, Texas.

NEIOWA said:

Oshkosh certainly once made good or great trucks. Their fire truck subsidiary also once made good trucks. The Firetrucks now at best are overpriced overrated. The program/budget fire trucks made in Fl are POS. Makes one wonder about everything else Oshkosh.

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As we say in Wisconsin's Fox Valley (home of Pierce) "They used to be builders of the finest, now they are builders of the most."

Our new truck from them will cost over $420,000, and I get to drive it each time I work!

I have no doubt about their military vehicles though. Look at income percentages. You want to keep the military happy as they are a big 'supporter' of Oshkosh.