Lockheed, U.S. to argue stop-work bid on Army trucks on January 20

WASHINGTON (Reuters) - The U.S. Court of Federal Claims will hear arguments on Jan. 20 in Lockheed Martin Corp’s motion to halt Oshkosh Corp’s work on 17,000 armored Humvee truck replacements for the U.S. Army while Lockheed challenges the $6.75 billion contract.

Marillyn Hewson, Chairman, President and CEO of Lockheed Martin, participates in a panel discussion at the 2015 Fortune Global Forum in San Francisco, California November 3, 2015. REUTERS/Elijah Nouvelage

Lockheed last month filed a federal complaint over the U.S. Army’s handling of the contract, as well as a motion seeking a preliminary injunction against any work on the trucks by Oshkosh until the matter is settled in court.

Lockheed contends that the Army’s evaluation of the competing proposals was flawed because it assessed the reliability of Lockheed and Oshkosh vehicles using different standards, according to redacted version of the filings now available. Lockheed also says the Army held “misleading” discussions with the company.

Lockheed filed the lawsuit last month, effectively halting a separate protest review by the Government Accountability Office. It said it filed the lawsuit because the GAO refused to review thousands of documents, or about 9 GB of data produced by the Army just two weeks before GAO was due to rule on the case.

GAO said it would not rule on cases pending in a federal court, but said Lockheed could have filed a supplemental protest to allow a review of the additional materials.

Lockheed said it did not file a supplemental protest because that would have allowed a stop-work order to expire, allowing Oshkosh to keep working on the truck which Lockheed said would give Oshkosh an advantage in a future competition.

The federal claims court set Feb. 1 as the deadline for the parties to produce the full record of documents for this case, according to a clerk with the court.

Lockheed said documents showed there “were material inaccuracies and inconsistencies” in information provided by the Army to the GAO about its evaluation of the bids.

For instance, Lockheed said the documents showed Army evaluators had taken notes while assessing the rival bids, despite testifying during a GAO hearing that no notes were taken.

Lockheed said Army officials also treated its bid differently when assessing the reliability of the new trucks, resulting in a “potentially massive downward adjustment to the cost/price evaluation” of Oshkosh’s vehicle.

“The prejudice to Lockheed Martin from the flawed evaluation was pervasive,” Lockheed said in its motion for an injunction.

Lockheed said it also was forced to submit additional data to explain changes in design from initial vehicles tested, but Oshkosh was not, even though it also changed its design.

The Army had no comment on the litigation. It lifted a stop-work order on the Oshkosh contract last month after Lockheed took the case to federal court.

Oshkosh had no immediate comment.

Reporting by Andrea Shalal; Editing by David Gregorio