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Reports SAIC and Boeing Protest Recent GCV Contract Awards

by: Matthew Potter
August 30, 2011

Category: Boeing, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, General Dynamics, logistics, Northrop Grumman Corp., production program, Proposal, Protest, SAIC, Services, U.S. Army | RSS 2.0

Less then two weeks ago the U.S. Army awarded two contracts for the next phase of development for their new Ground Combat Vehicle (GCV) system. This will be a replacement for the current M2 Bradley Infantry Fighting Vehicle (IFV) family of vehicles originally developed in the Eighties. GCV is also the program created after the Army cancelled the Future Combat System (FCS) family of vehicles which was going to replace the M1 Abrams / M2 in service.

Teams led by General Dynamics (GD) and BAE Systems (BAE:LSE) were selected to begin production of prototype vehicles in order to have a contest between them to see who would go on to final Engineering, Manufacturing, & Development (EMD) and then into full scale production. Each team received a contract worth a little over $400 million for this phase.

The GCV program could ultimately be worth billions over the next thirty years through production, sustainment and modification and is now one of the largest new programs the U.S. Defense Department is considering.

It is now being reported that SAIC and Boeing are protesting the decision to not award them one of the contracts. They are supposedly claiming that the Army did not apply their evaluation criteria correctly and possibly had a bias against the proposed solution as it utilizes a German vehicle as it basis.

The Government Accountability Office (GAO) will consider the protest and usually rules within 100 days. While the protest is being decided the Army must stop work on the awarded contracts. The GAO may find that the protest is unsubstantiated or uphold it. In that case the Army may have to review its source selection process, conduct a new contest or even release a new Request for Proposals (RFP) and start over.

Based on the last time the U.S. defense industry faced cuts in the Nineties more protests may be expected as the available contractors fight over fewer contractors. Each contract becomes more important and it can be expected that there will be more pressure to win them. The number of large programs, too, is going to decline as the U.S. invests less in new systems and focuses on production of existing ones.

The lead contractors on FCS, Boeing (BA) and SAIC (SAIC), also submitted a proposal but were not selected.

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