UPDATE: The post below, on analyst Loren Thompson's take on the Family of Medium Tactical Vehicles protest, has generated some reader feedback, spurring us to find out more explicitly about Thompson's relationship with BAE Systems. Thompson, chief operating officer of the non-profit Lexington Institute, told us yesterday that BAE is one of the clients of his for-profit consulting firm (his leadership of which is noted in the original entry). However, Thompson insisted the paper was written for the Lexington Institute, and he asserted that the firm's work for BAE played no part in his analysis of the FMTV competition.
One analyst is predicting the Government Accountability Office will soon overturn the recent award of the Army's Family of Medium Tactical Vehicles contract to Oshkosh.
FMTV competitors Navistar and BAE Systems earlier this month filed protests with the GAO of an August award to Oshkosh worth $280.9 million for 2,568 FMTVs. According to Oshkosh, the order is expected to total 23,000 trucks and trailers. BAE Systems was the incumbent in the competition.
In a Sept. 17 "issue brief," Loren Thompson of the Lexington Institute (who also runs a consulting shop) writes that the Army made "fundamental mistakes" by accepting a "wildly unrealistic cost estimate from Oshkosh without making any serious attempt to determine whether it was valid" and by rating the three offerors "equal in terms of risk and capability," even though BAE Systems was the incumbent.
And, Thompson writes, the service rated the offerors equal with regard to past performance, ignoring BAE's relevant past experience.
In combination, these missteps nearly guarantee that the protests lodged by the losing teams will be sustained when the Government Accountability Office rules on them later this year. But the truck award raises more far-reaching questions about the competence of Army source selections, because the errors were so egregious. Consider the issue of cost realism, a central concern in acquisition reform. Despite lack of facilities, workforce and relevant experience, Oshkosh bid 30 percent below what BAE is charging for building the same trucks today. BAE bid below its current asking price too, and but not that low -- even though it already has a production process in place. Army personnel accepted the bids at face value without any effort to independently verify them, and in fact made cost the sole determinant of the award.
Additionally, Thompson writes that capabilities and past performance were supposed to outweigh cost as factors in the competition, and rating Oshkosh as equal in production capability "seems preposterous on its face." In past performance, the Army "ignored a host of factors" in assuming Oshkosh could match BAE, including Oshkosh's high-priority contract to build Mine Resistant Ambush Protected All-Terrain Vehicles.
"What this all adds up to is a procurement disaster in the making, a conclusion GAO analysts should have little difficulty reaching," Thompson concludes.
According to his biography, Thompson, chief operating officer at the Lexington Institute, also runs Source Associates, a "for-profit consultancy."