DoD Buzz: Oshkosh FMTV Bid ‘Unbelievable’

[unhappycamper]

Oshkosh FMTV Bid ‘Unbelievable’
By Greg Grant Monday, December 21st, 2009 1:10 pm
Posted in International, Land, Policy

For those who haven’t been fol­low­ing closely the Army’s prob­lem­atic effort to buy a new truck, last week, the Government Accountability Office released its report that said the Family of Medium Truck (FMTV) com­pe­ti­tion was flawed. The Army awarded the $3 bil­lion FMTV con­tract to Oshkosh in August. The competition’s losers, BAE and Navistar, promptly filed a protest.

On Friday, we fea­tured com­ments from Oshkosh VP Andy Hove who said GAO found only a very minor and eas­ily cor­rectable flaw in the process and that the report did not call into ques­tion his company’s abil­ity to deliver a new FMTV with a price tag that is $400 mil­lion less than that of com­peti­tor BAE.

This morn­ing, BAE held a con­fer­ence call with reporters to pro­vide their eval­u­a­tion of the GAO eval­u­a­tion. BAE believes that GAO’s find­ings called the whole FMTV award into ques­tion and that the Army, and senior lead­er­ship from the Office of the Secretary of Defense, should step in and redo the com­pe­ti­tion, that accord­ing to Dennis Morris, pres­i­dent of BAE’s Global Tactical Systems. He called Oshkosh’s price quote “unbe­liev­able,” and said that it’s actu­ally less than BAE’s costs to build. Oshkosh’s busi­ness strat­egy is to get the con­tract now with a low bid and then make prof­its on sure to fol­low truck mod­i­fi­ca­tions and improve­ments down the road, he said.

It should be noted that GAO did not say Oshkosh’s price was unrea­son­able. The mis­takes in the com­pe­ti­tion came in a pretty spe­cific sub-​​factor that went into decid­ing whether Oshkosh had the capa­bil­ity to build the FMTV. The gov­ern­ment audi­tors major stick­ing point was that the Army incor­rectly said Oshkosh had all the needed tool­ing and equip­ment to build the trucks. They don’t, which Oshkosh acknowl­edges, and says they can eas­ily procure.

Oshkosh claims that because they build more com­po­nent pars in house that they were able to come up with a lower price. BAE says that’s baloney, because all of the truck builders get at least some of their com­po­nents from out­side and they know full well the costs of those parts. “The advan­tage vol­ume costs Oshkosh quotes are not there, because we know the sup­pli­ers are quot­ing us all the same prices,” said BAE VP Chris Chambers. “There are sev­eral sig­nif­i­cant sized com­po­nents that go onto dif­fer­ent vari­ants of the vehi­cles, where we have worked with sup­ply chains for many years, where we know cat­e­gor­i­cally that pric­ing going in is a large per­cent­age under the cur­rent mar­ket price.”


Rest of article at; http://www.dodbuzz.com/2009/12/21/oshkosh-fmtv-price-unbelievable-bae/?wh=wh

[Crowman1979]

1. I wouldn't trust anything BAE says. Especially after the Saudi bribery scandal.