Saturday, November 28, 2009

Texas-Based Military Contractor Appealing Loss of Contract

I mentioned it here last month that a British-owned military truck manufacturer, BAE, previously known as Stewart and Stevenson, a truck manufacturer with a factory in the Sealy area, lost its bid to renew its lucrative truck manufacturing contract to Wisconsin-based Oshkosh Corp.

Well come to find out today through this Houston Chronicle article that BAE is going to protest this contract decision to the Government Accounting Office.

The Chron article concentrates, as my piece did, on the political implications. On how Texas has lost its edge in its steady pursuit of a conservative perspective in a nation that has gradually shifted to the left. This loss is underlined by the article’s report of how Republican lawmakers in DC were caught unawares by this incident.
“‘We never saw this coming — we were completely blindsided,’ says a top aide to Sen. John Cornyn, R-San Antonio, a former member of the Senate Armed Services Committee panel with jurisdiction over military vehicles. Lawmakers and BAE officials alike felt ‘sucker punched,’ added David Davis, a top Hutchison aide.  ‘Shocked doesn't begin to describe it.’”
So Governor Perry along with 34 federal legislators are hoping that they are successful in an appeals process to get the GAO to propose a “re-bid.” Or in common parlance, “a do-over.”

From Sealy News
“The decision to file a protest is not one the company took lightly, but the company felt it could not afford, and neither could U.S. taxpayers, to overlook what BAE Systems officials have called a flawed procurement process.”“‘What’s the impact of us leaving and the impact of people without a job?’ asked Mike Teegardin, BAE Systems director of communications. ‘It’s pretty staggering and it’s pretty stunning in this particular environment. We don’t believe we should just be given contracts because of who we are…we’re looking for a fair assessment.’”
This peaked my interest because I was unaware that the process of awarding the government contract was “flawed.” I just assumed, as did everyone else, that Oshkosh got the contract because it underbid BAE by 10% - - - and it had some influence with newly empowered Democrats who now hold key positions in the federal government.

Like David Obey (D – Wis.), chairman of the House Appropriations Committee.

That Republicans were ignorant of this turn of events was also news to me. But I now see how truly deluded these people must be because they think that their political clout will help BAE carry the day in a GAO investigation.

Now I started to wonder where the flaw in the bidding process lay. Was BAE going to claim it was wrongfully denied renewal of the contract because of political backroom wrangling?

No, absolutely not.

But as it turns out, maybe that would have been the shrewd option.

BAE is arguing that the decision to award the contract to the low-bidder, Oshkosh Corp., wasn’t fair because they did not take into account past performance but merely rated all three bidding companies as equals.

Further quoting Mike Teegarden in the Sealy News:
“‘That’s where our challenge comes in. Seventeen-plus years of experience, over 56,000 vehicles and trailers produced, fully up and running facility that runs 24-7 that produces over 40 vehicles a day was rated equal to competitors that have never produced the vehicle before,’ Teegardin said. ‘Oshkosh is a fine truck maker in their own right, don’t get me wrong, but to rate us equal in capability, to rate our employees…to say to them, thanks for your experience, it doesn’t really matter…we’re just going to equal you all out and judge you on price…that’s the essence of the problem that we have.’”
Essentially saying then, that the federal government should spend its money, taxpayer money, not on the lowest bidder, but on the bidder who has been doing the job for 17 years. Something our Republican delegation to DC gets right behind.

That is, it’s perfectly OK to scream and yell about wasting taxpayer money on recession recovery, but it’s not OK when the government awards a militatry contract to a the lowest bidder.

But I can concede the point if BAE, and Stewart and Stevenson, its predecessor, can demonstrate a quality product that helps to preserve the lives of our soldiers.

So I checked.

Soon after delivering its first products to the military it was noted that there was a slight flaw in their trucks’ driveline.


“The FMTV program initially experienced some bad press following 13 accidents involving A0-model trucks. One of the accidents resulted in a rollover attributed to a driveline design flaw. A March 1998 safety message to drivers noted that the vehicles can operate at fairly high highway speeds. But at the 45- to 58-mph range, they found a resonance or vibration in the engine-transmission-driveshaft combination. The vibration stressed the truck’s u-joints, which could cause the driveshaft to fail.”
As a result of there failures, the military issued a “safety gram” specifying that the trucks could not be driven over 30 mph until the trucks were retrofitted in a recall program.

The trucks, in a war zone, could not be driven faster than the speed limit in a school zone.

Now I call that “experience.” I call that “quality”. Just not good experience or good quality.

In short, if BAE wants the GAO to judge it on an unequal basis because of its previous experience in production of high quality military trucks, maybe the GAO should do exactly that.

A decision by the GAO is due in two weeks.

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