Army Standing Firm on JLTV Protest (UPDATED)

Lockheed Martin’s protest over the August selection of Oshkosh Defense to build a new tactical truck for the Army and the Marine Corps has taken an unusual turn. It comes amid allegations that the Army may have failed to disclose critical program data that could have affected the outcome of the protest that Lockheed filed in September with the Government Accountability Office.

GAO announced Dec. 15 that it was dismissing Lockheed’s protest after the company notified the office Dec. 11 that it was considering filing a “notice of post-award bid protest” with the U.S. Court of Federal Claims.

Lockheed Martin announced Dec. 17 that it would proceed with the claim. “After careful consideration of all options, Lockheed Martin decided to file a complaint with the Court of Federal Claims concerning our Joint Light Tactical Vehicle contract award process," the company said in a statement. "We look forward to working with all parties involved on the next steps.”
An Army spokesman would not comment specifically on the allegations that program data may have been mishandled or intentionally kept from Lockheed or from GAO.

"We appreciate GAO's review of the JLTV source selection decision,” the spokesman said in an email. “The program will continue to comply fully with all required processes, and we remain confident that the JLTV program is well positioned to fill a critical capability gap for our soldiers and Marines while remaining affordable for America's taxpayers."

Lockheed is weighing a new path to challenge the award after it became aware of new information about the evaluation of JLTV prototypes during the engineering, manufacturing and development phase of the program, known as EMD. The company raised the issue with GAO but was unsuccessful in obtaining additional hearings or an extension of the protest deadline in order to review the newly available data.

“Recently, we were made aware of a substantial number of documents directly related to the competition that were not provided to the GAO or Lockheed Martin until very late in the protest process,”

Lockheed said in a statement. “We believe this newly discovered information should have been considered by the GAO before issuing a ruling on the protest, however, GAO declined to grant an extension to the 100-day deadline and could not consider the new documents. Therefore, we are considering all options available to us to ensure that a fair and unbiased evaluation of all available data is considered before issuing a decision in this important matter.”

According to an industry source, the Army came forward with a “very large volume of documents” after the GAO review process and hearings had been completed. These documents included key data that had been collected during the EMD phase of JLTV before the Army’s selection of Oshkosh Aug. 25. The source said Lockheed Martin believes this previously undisclosed data would have materially affected the case, including the testimony and the cross examination of government witnesses.

Lockheed believes important facts were not taken into account during the GAO review, the source said. The volume of documents and data that was provided “too late to be considered was a larger quantity than all the other material and data previously provided to Lockheed in the protest period combined.” The company contends that the additional documents include data that “address positions taken by government witnesses before the GAO.”

How the legal wrangling might affect the JLTV program is still unclear.

Just hours after GAO dismissed the protest Dec. 15, the Army Tank-Automotive and Armaments Command Life Cycle Management Command directed Oshkosh Defense to resume work on JLTV.
GAO General Counsel Susan A. Poling wrote: “We are closing our files without further action. The protests are dismissed.” Her explanation is that GAO is required to dismiss a protest when a dispute over a contract award is litigated in the courts. “Pursuant to the rules of the United States Court of Federal Claims, the protester has filed a notice with the COFC stating that it intends to file a protest with that court involving the same subject matter as protests pending before our office.”

Industry analysts had predicted that the Army’s award would be challenged, given the stakes for contractors. The latest twist is unusual, however. Although companies frequently protest contract awards with GAO, they rarely take the government to higher courts.

Oshkosh beat Lockheed Martin and AM General for the $6.7 billion award to produce up to 17,000 trucks. The program could expand further if the Army and Marine Corps move to replace their entire Humvee fleets. Humvee manufacturer AM General chose to not protest the decision.

Defense analyst Byron Callan, of Capital Alpha Partners, said Lockheed Martin's move “may express less confidence that GAO would have overturned the Army's decision.”
Oshkosh officials said the company would not comment on Lockheed’s latest actions or its allegations.

Shortly after GAO dropped Lockheed Martin’s protest, the Army lifted the stop-work order and instructed Oshkosh to resume performance of the JLTV contract. Industry insiders said the Army’s swift move to lift the stop-work order is rather unusual, as the government typically takes several days or as long as two weeks to allow contractors to resume work after a protest.

“We are confident that the Army conducted a thorough, methodical procurement including exhaustive testing and evaluation to ensure our troops get the best vehicle, and that this process was validated by the GAO review,” said Oshkosh Executive Vice President John M. Urias. “We are confident that the U.S. Court of Federal Claims will expeditiously reach the same conclusion and the award to Oshkosh will be upheld. We are hopeful that this latest protest filing will not be permitted to further delay the JLTV program.”

The contract stipulates that Oshkosh will begin delivering vehicles within the next 10 months.

EDITOR's NOTE: This post was updated with Dec. 17 statements from Lockheed Martin and Oshkosh Defense.

Topics: Manufacturing, Procurement, Land Forces