December 16, 2015 / 12:52 AM / 4 years ago

U.S. GAO dismisses Lockheed protest of $6.75 billion Oshkosh Army deal

WASHINGTON (Reuters) - The U.S. Government Accountability Office on Tuesday dismissed Lockheed Martin Corp’s (LMT.N) protest of a $6.75 billion Army contract for next-generation Humvees to Oshkosh Corp (OSK.N) after Lockheed said it would take the issue to federal court.

U.S. soldiers stand near a Humvee vehicle during the NATO Force Integration Unit inauguration event in Vilnius, Lithuania, September 3, 2015. REUTERS/Ints Kalnins

Lockheed said it was considering all its options after the GAO refused to extend the deadline for ruling on the protest despite the discovery of a large number of documents that were not provided Lockheed until “very late in the protest process.”

The GAO had been poised to rule on the merits of the case by Thursday but dismissed it after Lockheed said it would file a fresh protest with the U.S. Court of Federal Claims. A clerk with the court said the protest had not yet been filed.

“Our office will not decide a protest where the matter involved is the subject of litigation before a court of competent jurisdiction,” the GAO said in a statement.

Oshkosh said it would now resume work on the Joint Light Tactical Vehicle trucks after the U.S. Army lifted a stop-work order first imposed when Lockheed filed its protest with the GAO in September.

The contract calls for Oshkosh to begin delivering vehicles within the next 10 months, reaching an expected volume of nearly 17,000 vehicles over an eight-year period. Winning the contract could put Oshkosh in a prime position to bid for a total of 55,000 vehicles worth around $30 billion over time.

Army officials had no immediate comment.

Lockheed issued a statement late on Tuesday saying that it wanted to ensure “a fair and unbiased evaluation of all available data” before a decision was made.

One industry source said the U.S. Army had come forward with a “large volume of documents” well after GAO held hearings and “just before” its anticipated ruling, which Lockheed’s attorneys believed contained additional grounds for protest.

“Lockheed Martin attorneys believe this previously undisclosed data would have materially affected the case, including the testimony and cross examination of government witnesses,” said the source, who was not authorized to speak publicly.

The volume of those documents and data was also larger than all the other material and data previously provided to Lockheed during the protest period, the source said.

Jeff Bialos, a former Pentagon official and partner with the Sutherland Asbill & Brennan law firm, said moving protests from the GAO to federal court was a “known and used tactic.”

“You usually do it when you think you have a better case with a judge than with GAO,” he said.

Bialos said Lockheed’s decision to move the case to federal court reflected the intensity of competition for big contracts.

The Oshkosh logo is seen in Wisconsin October 12, 2011. Oshkosh Corp. has been a rare lifeline for the beleaguered United Auto Workers, one of the few American manufacturers to have added significantly to its ranks of well-paid union workers in a brutal decade for factory hands. REUTERS/Darren Hauck

“When dollars get lower and there are fewer acquisition programs, protests go up and people fight more fiercely for these awards,” he said.

Oshkosh said the Army conducted a thorough, methodical procurement, including exhaustive testing and evaluation of the competing vehicles.

Privately held AM General, which built the U.S. military’s original Humvees, did not file a protest against the decision.

Reporting by Doina Chiacu and Andrea Shalal; Editing by Bill Trott, Dan Grebler, Diane Craft

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