Monday, December 14, 2009

Sealy's Army truck plant gets second chance

I find this bizarre, frankly.

The federal government today overturned the Army's decision to shift billions of dollars in combat truck production from Texas to Wisconsin after 17 years, raising hopes that as many 10,000 jobs can be saved at the BAE Systems plant in Sealy and surrounding suppliers.

The decision by the contract appeal division of Congress' watchdog Government Accountability Office set aside the Army's decision last August to hand the potential $2.6 billion five year contract to Oshkosh Corp., a 92-year-old firm in Wisconsin that bid roughly 10 percent below the bid submitted by BAE Systems.

Lots has been posted on this, focusing on the failure of Texas Republican officials -- in particular Michael McCaul -- to see it coming.

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.”

Emphasis above is mine.

The Sealy-based subsidiary of British-owned BAE Systems had been hoping the GAO would reopen the contract for a second round of competitive bidding after Wisconsin-based Oshkosh Corp., won the first phase of a projected $2.6 billion deal to produce 23,000 trucks and trailers over the next five years.

Oshkosh bid roughly 10 percent below the BAE Systems' subsidiary, helping the 92-year-old northern truck manufacturer to win an initial contract to produce 2,568 trucks for $281 million.


The Army decision to shift combat truck construction from Texas to Wisconsin was a huge blow to BAE Systems and Texas alike, after the Sealy-based operation produced more than 50,000 2.5-ton and 5-ton utility trucks for the Army for the last 17 years. Company and local officials say as many as 10,000 direct and indirect jobs could be at risk in and around Sealy if the Army were permitted to stick with the decision announced last August to move the contract to Wisconsin starting next October.

So... should we be happy that the jobs in Sealy might be saved, or unhappy that as taxpayers we're going to be paying 10% more? Or will we pay more? Is the GAO simply doing what any group of good beancounters does: leveraging its authority to ratchet down the price? Let's hope that particular outcome will also be good for the Army and our soldiers -- if the new (lower) bid doesn't compromise on reliability and/or safety.

Somewhere in Washington a big ol' political fight is erupting, with the main event between the Wisconsin and Texas Congressional delegations. Pop some corn.

Update: More on the news and more on the credit-taking for the save by our GOP from Stewart Powell at the Chron. Hal at Half Empty also has a take.

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