Auditors reject Oshkosh protest of $9 billion JLTV contract loss
This story has been updated to include comment from the GAO.
WASHINGTON — The Government Accountability Office has denied Oshkosh Defense’s protest of the U.S. Army’s decision to award a nearly $9 billion contract to AM General to build Joint Light Tactical Vehicles, Defense News has learned.
Oshkosh took issue with the Army’s evaluation of its technical, price and cost proposals as well as with the Army’s evaluation of AM General’s submission, Edward Goldstein, a GAO attorney said in a June 12 statement.
“Oshkosh also argued that the Army unreasonably and unequally conducted discussions and should not have found AMG to be a ‘responsible’ contractor; that is, a contractor with the necessary financial, technical, and other business capabilities needed to perform the contract successfully. Finally, Oshkosh argued that the Army unreasonably made its best-value tradeoff determination.
“In denying the protest, GAO concluded that the Army reasonably evaluated proposals in accordance with the RFP’s evaluation criteria, and that any judgments made were consistent with and adequately supported by the content provided in written proposals or observed as part of site visits conducting during the course of the solicitation process,” Goldstein said.
The decision was issued under a protective order because it may contain proprietary information. A redacted version of the report is forthcoming.
“We are disappointed with the decision,” Oshkosh said in a statement sent to Defense News, “and we firmly believe our proposal was the lowest risk, best value solution for the young men and women serving our nation.”
Oshkosh said it would assess the GAO’s findings and evaluate next steps.
AM General upset JLTV-maker Oshkosh in the Army’s new competition to build more of the vehicles, winning a contract valued at $8.66 billion. Oshkosh won the original 2015 competition to build JLTV, beating out AM General and Lockheed Martin.
Oshkosh filed a protest with the GAO on March 6 following its post-award debriefing with the government. Tim Bleck, Oshkosh’s president, said at the time the company has “significant concerns regarding the evaluation of the proposals under the solicitation that support an independent review. We believe the government’s evaluation did not properly review the financial, technical, and manufacturing capabilities offered to select the best value and lowest risk solution to deliver the JLTV.”
Since 2020, private equity firm KPS Capital Partners has owned AM General. The subsidiary is now setting up infrastructure at its 96-acre Mishawaka Manufacturing Campus in Indiana.
Oshkosh has built nearly 19,000 JLTVs to date, supplying them to the U.S. Army, Marine Corps, Air Force and Navy as well as military forces in Montenegro, Brazil, Slovenia and Lithuania. The company is under contract to build more than 22,679 vehicles and expects additional orders through November.
According to a redacted copy of the protest obtained by Defense News, Oshkosh contends the Army took “glaring risks” by selecting AM General, noting the company has “zero experience manufacturing the JLTV” and “by its own admission, must build out its own facilities before it can start production.”
Oshkosh said in the protest the Army did not appropriately consider AM General’s financial capacity.
The company is preparing to close its JLTV production line by the end of 2024.
“As we move forward, we will continue to focus our mission to provide the highest quality vehicles and technologies that enable our warfighters to perform their mission and return home safely,” Oshkosh said in its June 12 statement.
AM General has to start building JLTVs by August 2024, and while the protest was still pending the Army went ahead and awarded a $4.7 billion contract to the company on May 24.
Byron Callan of Capital Alpha Partners said in recent analysis prior to the decision that he doubted the Army would have moved forward with a contract award to AM General if the service thought the award would be overturned.
Jen Judson is an award-winning journalist covering land warfare for Defense News. She has also worked for Politico and Inside Defense. She holds a Master of Science degree in journalism from Boston University and a Bachelor of Arts degree from Kenyon College.
Source: Defense News
