EADS Supports Bid For KC-X

It is being reported by various sources that EADS is pressuring Northrop Grumman to go ahead and submit a bid for the new KC-X RFP. Northrop had informed the Government that they planned not to if the terms were not significantly changed. They felt the RFP was favoring Boeing’s cheaper, smaller KC-767 aircraft.

The final RFP came out two weeks ago and still no word from Northrop that they will go ahead and submit something in May. EADS obviously would like another chance to win the contest after they lost the last one to Boeing’s protest in 2008. The $35 billion would go a long way to make up for the lost A400M revenue.

New RFP Released Today

The Air Force and Department of Defense acquisition officials briefed Congress and the press today on the new RFP for the KC-X. It had some slight changes from the draft release a few months ago. The key question is will Northrop bid this time around?

They won the last contract to have that thrown out on Boeing’s protest. Much more to come on this in the days ahead.

Oshkosh Corporation Believes the Army’s FMTV Award Decision Will Be Maintained — Press Release

Oshkosh Corporation Believes the Army’s FMTV Award Decision Will Be Maintained

OSHKOSH, Wis. — Dec. 14, 2009 — Oshkosh Corporation (NYSE:OSK) today announced it was informed by the Government Accountability Office (GAO) of its decision regarding the protest of the Family of Medium Tactical Vehicles (FMTV) contract, awarded to Oshkosh on August 26. The majority of the protesters’ claims were denied, including challenges to the evaluation of the Oshkosh Corporation price.

“At Oshkosh, we appreciate the GAO’s thorough review and welcome the Army’s re-evaluation of the two narrow issues recommended for reconsideration. We believe that our FMTV offer was, and continues to be, the best value for the U.S. Army, our troops and the U.S. taxpayer,” said Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer. “It is important to realize that today’s decision did not recommend proposal revisions nor did it recommend termination of our contract.”

Bohn added, “We believe that when these narrow issues are reconsidered, the Army’s decision to award Oshkosh Corporation the FMTV contract will be maintained.”

Oshkosh Corporation will continue to lean forward on the FMTV program, including preparation for the construction of a new 150,000-square-foot electrocoat (E-Coat) paint facility at its Oshkosh, Wis., campus in support of FMTV production and possibly other Oshkosh vehicle programs.

Oshkosh remains the only current manufacturer of both medium and heavy tactical wheeled vehicles in the U.S. defense industry, having produced more than 70,000 military-class vehicles in its manufacturing facilities. Oshkosh Corporation’s proven production capabilities were recently recognized by the National Center for Advanced Technologies (NCAT), which awarded Oshkosh with a 2009 Defense Manufacturing Excellence Award for its M-ATV launch team, which has exceeded delivery requirements for every month since the contract award on June 30, 2009.

About Oshkosh Defense
Oshkosh Defense, a division of Oshkosh Corporation, is an industry-leading global designer and manufacturer of tactical military trucks and armored wheeled vehicles, delivering a full product line of conventional and hybrid vehicles, advanced armor options, proprietary suspensions and vehicles with payloads that can exceed 70 tons. Oshkosh Defense provides a global service and supply network including full life-cycle support and remanufacturing, and its vehicles are recognized the world over for superior performance, reliability and protection. For more information, visit www.oshkoshdefense.com.

About Oshkosh Corporation
Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies. Oshkosh Corp. manufactures, distributes and services products under the brands of Oshkosh®, JLG®, Pierce®, McNeilus®, Medtec®, Jerr-Dan®, BAI™, Oshkosh Specialty Vehicles, Frontline™, SMIT™, CON-E-CO®, London® and IMT®. Oshkosh products are valued worldwide in businesses where high quality, superior performance, rugged reliability and long-term value are paramount. For more information, log on to www.oshkoshcorporation.com.

®, ™ All brand names referred to in this news release are trademarks of Oshkosh Corporation or its subsidiary companies.

SMALL BUSINESSES DEMAND ENFORCEMENT OF PENALTIES AND ACCURATE ACCOUNTING OF THEIR CONTRACTS — Press Release

SMALL BUSINESSES DEMAND ENFORCEMENT OF PENALTIES AND ACCURATE ACCOUNTING OF THEIR CONTRACTS

Size Protest Victories without anything to Show for them and Agencies Unfair Reporting of Small Biz Contracts prompts Demand for Congressional Hearings

Size Protest Process must be Strengthen1 and Data Quality Act 2 Implemented

JACKSONVILLE, FL., November 2nd, 2009. – “My second Size Protest victory within two months against a large business which had misrepresented its size to win small business contracts3 will help demonstrate that the size protest process does not work as Congress had intended and the process needs a major overhaul,” said Raul Espinosa, President of FitNet, a government purchasing group in Northern Florida.

He added, “Violators are not concerned with the penalties Congress had imposed for fraud because there is no enforcement and the protest winners cannot get back the contract they fought for nor collect any fees nor expenses for their efforts.”

In 2005, Espinosa founded The Fairness in Procurement Alliance (FPA), following his Size Protest victory against a front for a large business to help demonstrate that the Size Protest process did not deliver justice4. FPA has since become a major national coalition to advance ‘partnership concepts’ and encourage bureaucrats to pay attention to out-of-the-box solutions. The flagship of this effort is The Umbrella Initiative5,
whose goal is to level the playing field in government contracting not only at the Federal level, but at the State and local level as well. Among its published Reports, is a White Paper on Why Size Protests Need Strengthening6, which cites numerous mishandled size protest cases and recommends specific solutions for the process to deliver justice.

FPA is now relying on its successes7 to help secure funding for seven pilot projects in Florida8 that do not only encourage small business participation in government contracting, but their projected results can be replicated in other States. Espinosa said, “The Umbrella Initiative pilot programs intend to make better use of existing networks of service providers such as the Small Business Development Centers (SBDC) and the Women’s Business Centers (WBC).”

Through an appeal before the Office of Hearings and Appeals (OHA) for yet another alleged mishandled size protest9, Espinosa is also attempting to demonstrate how Agencies are not only overlooking size standards violations, but allowing the abusive procurement practice referred to as unfair justification10 to abuse small businesses. “FPA has demonstrated that the Size Protest process is ineffective at delivering justice and
deterring fraud and abuse,” said, Borden Hallowes, Esq., Acting Director of the FPA Legal Center. He added, “There are entrepreneurial ways with which to fix the protest process and protect the statutory small business reservation with the Data Quality Act. FPA intends to bring attention to the ways it can be done.”

Anthony Robinson, President of MBELDEF said, “Espinosa’s determination since winning his 2005 key court victory to deter fraud and abuse in government contracting and help bureaucrats meet the objective of P.L. 95-50711 deserves the attention of Congress and the consideration of bureaucrats.”

Dr. Henry Thomas, Director of the FPA Think Tank at UNF said, “Our efforts are aimed at bringing attention to what we call “entrepreneurial solutions” that can level the playing field in government contracting. He added, “Our government is blinded by pro big business — Too big to fail thinking.”

Espinosa added, “FPA has corroborated what the SBA OIG has already claimed is the SBA biggest challenge:12 Stopping large businesses from taking small business contracts and preventing Agencies from taking credit for small business contracts awarded to large businesses.”
“For small and disadvantaged businesses to receive maximum practicable utilization in government contracting, as required by P.L. 95-507, all contracting abusive practices must be eliminated,” said Roger Campos, President of the Minority Business Round Table (MBRT) and a Member of the National SBA Advisory Committee.

Paul Murphy, President of Eagle Eye, a strategic partner of FPA said, “Transparency has allowed us to show that Federal Agencies had taken credit for $4.01B in small business contracts awarded to 48 multi-billion dollar businesses in FY 2008 which the Agencies did not account for to SBA.”13

Bob Coakley, a former staff director to former Florida Governor and Senator Lawton Chiles who is a FPA advisor noted, “Congress ought to inquire into the accuracy of the underlying data of the SBA Report Card. He added, “The Data Quality Act was intended to extend the requirements of the Chiles authored Paperwork Reduction Act. OMB has an affirmative responsibility to ensure that information disseminated by the federal government is reliable. Moreover, the Obama Administration is insisting upon transparency of government operations. They should determine and act upon the concern that small and disadvantaged businesses were shortchanged $4.01B in contracts they did not receive.”

For the current government outreach initiative to succeed at encouraging more small and disadvantaged businesses to contract with the government, SBA, MBDA and DoJ have to cooperate and support entrepreneurial efforts at eliminating ‘fraud and abuse,’ and at opening more contract opportunities at all levels.

“Eliminating the alleged illegal ‘exemptions’ on the Federal Acquisition Regulations (FAR) will allow $64B in federal contracts to become eligible for the statutory small business reservation,” said Al Piña, Chairman of the Florida Small Business Reinvestment Coalition. (FSBRC) He added, “Accurately accounting for all Florida minority businesses and for the municipal and State contracts disadvantaged businesses are receiving. The
projects of The Umbrella Initiative must be made a priority for the outreach efforts to succeed.”

Murphy, said, “The Umbrella Initiative and their projects will permit an accurate accounting for all disadvantaged businesses at the State level and for the contracts they are receiving from the State and municipal government.” He added, “The Umbrella Initiative intends to match state and municipal data to the Federal statistics and thus help State and municipal officials maximize all efforts at leveling the playing field.”14

Scott Amey, General Counsel for the Project on Government Oversight (POGO) said, “If the Administration is serious about acquisition reform, this is one of the first places it should look to enhance competition and improve federal contract spending.”

Congresswoman Corrine Brown along with other elected officials in Florida are supporting The Umbrella Initiative and its goal to establish a Minority Procurement Center at UNF 15 which would work on projects that would double the number of small businesses contracting with the government by the year 2020.

# # #

1 SBA IG Petition. – http://www.docstoc.com/docs/13394703/Congress-Asked-to-Enforce-Penalties-and–Revamp-Size-Protests
2 The Data Quality Act. – http://en.wikipedia.org/wiki/Data_Quality_Act
3 Size Protests Decisions against Unisen, Inc. – http://www.docstoc.com/docs/13810534/Consecutive-Size-Protest-Decisions-Against-Unisen-Inc
4 The OHA and SBA Decisions. – http://www.prweb.com/releases/2005/10/prweb302024.htm
5 The Umbrella Initiative. – http://www.docstoc.com/docs/3683947/The-FPA-UNF-Umbrella-Initiative
6 White Paper on Size Protests.- http://www.docstoc.com/docs/3651041/Reasons-why-the-SBA-Size-Protest-System-does-not-Work
7 FPA Successes . – http://www.docstoc.com/docs/11209387/FPA-Success-and-Track-Record
8 Proposed Florida Pilot Projects. – http://www.docstoc.com/docs/4458661/?key=N2QyYzg3N2Qt&pass=NjA2ZC00ZThh
9 OHA Appeal for Mishandled Protest. – http://www.docstoc.com/docs/13806343/OHA-Filing-for-Mishandled-Size-Protest
10 The Unfair Justification Procurement Advisory. – http://www.prweb.com/prfiles/2008/08/31/162468/FPAAdvisoryUnfairJustifications.pdf
11 P.L. 95-507. – http://www.docstoc.com/docs/3626707/The-public-law-that-defines-procurement-set-asides
12 The SBA OIG Report 5-15. -http://www.sba.gov/idc/groups/public/documents/sba/oig_gcbd_05-15.pdf
13 48 Ineligible Firms – http://www.docstoc.com/docs/13948639/FPA-List-of–48-Inelegible-Suppliers-Awarded-Small-Biz-Contracts-in-FY08
14 The State and Municipal Efforts. – http://www.docstoc.com/docs/13393316/Florida-Minority-Participation-in-Federal-Highway-Contracts
15 The Minority Procurement Center at UNF. – http://www.docstoc.com/docs/6048073/Cong-Corrine-Brown-Supports-FPA-UNF-Initiative

Northrop Threatening No Participation Over Cost Data

Yesterday Northrop announced that it is considering not participating in thew new KC-X competition. They are concerned that the the way the price requirement is structured may not be fair to them. They are also pursuing the complaint that their cost data was provided to Boeing during the protest of the last award and want access to the same information.

If Northrop and EADS don’t submit a bid it will be hard to get actual competition on the contract. That would leave just one submission, Boeing, or perhaps two from them if they go the route of having a 777 as well as a 767 proposal. This situation would make it hard for the Air Force to proceed.

The chances of Northrop doing this is low and the Department of Defense realizes it. This is the largest procurement coming down the road and both EADS and Boeing need the work. Of course if there is really a belief that their bid cannot win no matter what then Northrop should just save the money and not prepare one. This is only the draft RFP so the next year or so should be interesting.

MRAP-ATV Moves Forward

In early March the Defense Department awarded a group of companies contracts to begin concept designs for the Mine Resistant Ambush Protected-All Terrain Vehicle (MRAP-ATV). Now it is being reported that the first production buy contracts may be awarded by May 1st. Crain’s Detroit Business says that the contracts had been delayed due to the short lived protest by Navistar. The Army plans to buy a small quantity of vehicles to do tests with and then order larger buys. The Defense Department had discussed in the past buying several of the proposed vehicles rather then focusing on just one.

This would mirror the experience had with the large MRAP vehicles bought for use in Iraq and Afghanistan to defeat the IED threat. Then due to the large quantities needed quickly several companies were able to win contracts. Part of this was that the U.S. military moved slowly first equipping engineering units and then the bulk of their infantry and other troops. This meant that the U.S.M.C and the Army bought different types for the missions. The MRAP-ATV will be used in Afghanistan where a lighter, more mobile off road vehicle is needed due to the rough terrain. This has been a more deliberate process then that used for the MRAP. Multiple contracts would allow faster equipping of units, but will also require a larger, more diverse logistical and training tail.

U.S. Department of Defense Still Not Sold on Split Tanker Buy

Responding to growing pressure from Congress and some in industry to the idea of splitting the KC-X tanker procurement between Boeing and EADS Secretary of Defense Gates said that the idea would be bad policy. The Hill reports that any cost savings from more rapid production would be offset by the increased logistical tail of having two separate systems. In this day and age when the quantities of equipment purchased is minimal the U.S. cannot afford a dual source for one mission. While some have said that this proposal would more rapidly field capability a split fleet would require two supply chains, training networks and support networks. More will be found out when the Obama administration releases its FY10 budget proposal in the near future.

Minority Set Aside Contracts Still Banned in DoD

In November a Federal Appeals Court ruled against the Pentagon’s program of minority set asides in contracting. This case is under review about whether it will be appealed to the Supreme Court. Government Executive writes that the Defense Department announced while this process is ongoing it will continue not using these contracting rules. The company that won the law suit sued because they submitted a lower bid then the winner who was a minority owned corporation. The appeals court based their ruling on the fact that the rules benefited minorities not proven to be discriminated in the past by Defense contracting. The Department has maintained a program where five percent of contracts had to go to these designated disadvantaged businesses. More to come in the future on this as one would presume that the Obama administration would support this program in the Federal Courts.

Congressman Murtha Makes Inefficient Recommendation for KC-X

Congressman Murtha, the powerful Democratic head of the House Appropriations Subcommittee for defense, was visiting Mobile, AL and made a rather stupid recommendation for the KC-X program. The Seattle Post-Intelligencer reports that he said the Air Force should split the work between Boeing and the EADS-Northrop Grumman team. Unless the military is going to buy large numbers of a system — and 150 odd tankers does not count — the costs associated with having two training, support and parts systems are unjustifiable. The aircraft would also end up more expensive as there is less economy of scale available with small lot buys. Murtha is just trying to split the knot but the suggestion is not practical.

KC-X Competition to Restart Soon

Secretary of Defense Gates testified today to Congress as he continues his role with the new Obama administration. Reuters reports that Gates said the KC-X tanker competition would restart this spring with an expected award date in the first or second quarter of Fiscal Year 2010. If you remember the original contract was awarded to a team of Northrop Grumman and EADS but Boeing protested and the GAO upheld it. The original plan to conduct a recompete in late 2008 was postponed with a decision to wait for a new administration. One key change is that DoD will handle the proposal and source selection instead of the U.S. Air Force.

Interesting Column at The Space Review on Protests in Space Contracting

Taylor Dinerman has written an interesting column on the recent protest of the commercial cargo contracts given to SpaceX and Orbital by PlanetSpace. He is comparing it to the almost routine practice in the Defense industry of protesting large contracts you don’t win. Actually some small ones are as well. In Defense there has been a growth over the last ten years in protests as the number of companies and contracts have shrunk. NASA has avoided this mainly, in my opinion, of the few “commercial” contracts they award and that there has been enough work to go around in the past.
Read more

KC-X Advertisement Makes DoD Unhappy

Northrop Grumman took out an ad this week in the Washington Post supporting its proposal for the KC-X mission. The Wall Street Journal reports that the content of the advertisement made folks over at DoD most unhappy. That is because it quotes an unidentified official as saying the A-330 was $3 Billion cheaper then the B-767 overall. Read more

USCG Cutter Contract Protested

One of the losing bidders on a contract to build new cutters for the US Coast Guard, Marinette Marine, protested the award to Bollinger Shipyards for a new class of small ships the Milwaukee Journal-Sentinel reports.. The initial contract is for $80 M and will begin a program that might see up to 34 ships procured. This program arose out of a failed attempt to upgrade existing USCG ships by extending the hull and adding capability. Bollinger was heavily involved in that program, and some feel that the past performance there should have disqualified them from participating in this contract. Marinette Marine has previously built other ships for the USCG as well. The Government Accountability Office (GAO) has 100 days to rule on the protest. Normally the contract is put on hold while the protest is resolved.

KC-45 fallout continues

With the decision to not go ahead with the KC-45 recompete and the cancellation of the planned source selection, the Pentagon has decided that due to the decision to cancel the original contract Northrop Grumman, and EADS, will receive some termination fee. This will pay the company for any work that the did while the contract was active prior to the protest and GAO recommendation to recompete the proposal. Termination fees are common for when the Government cancels the contract for administrative reasons. If ti is canceled due to non-performance then it gets a little more difficult. Due to the high visibility of this decision, I am sure the Congress will take a look at any money payed to Northrop Grumman.

See the Los Angeles Times for more on this.

KC-X haunts CSAR-X

With the decision to punt on the KC-45 recompete by the current administration there are some worries that this might affect the CSAR-X contract as well. Last word was that the announcement of who won the new GAO ordered competition would come sometime this Fall. Now some of the competitors; Sikorsky, Augusta Westland and Boeing; are concerned that perhaps this decision will delay the announcement of the winner. Boeing had won a contract only to have a protest upheld by GAO for the USAF not applying their criteria correctly.

See this short AP article for more.

We’re still in, says EADS

Denying a report in a German magazine, reported here, EADS restates that they will remain competitors for the KC-45 contract. Secretary of Defense Gates recommended postponing the reopening of the KC-45 bid process until next year when a new administration will be in power. EADS was reported as not wanting to participate in future contract proposals if the current one was delayed. The company is now saying that that is not the case.

See CNNMoney.com for that story.

Tanker decision fallout

A fallout from Secretary Gates’ decision to postpone the KC-45 RFP is that EADS now is discussing whether they will bid on the contract next year. Boeing had threatened to not compete, feeling the terms where not in their favor and now EADS is upset that the recompete cannot go forward. Without two competitors it will be hard to have a competition. Unfortunately unless you want a Russian aircraft proposed their are only two companies capable of bidding – Boeing and EADS. McDonnel Douglas, who actually won the last tanker contract with the KC-10, is now part of Boeing.

See the press release at TheEarthTimes.

Gates gives up

The Secretary of Defense today canceled the KC-45 re-proposal. He decided that there was not enough time to do this before the end of President Bush’s second term. The announcement was made via a press release this afternoon. Secretary Gates stated that ““It has now become clear that the solicitation and award process cannot be accomplished by January,” he said. “Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team.”

This decision ends temporarily a seven year saga that started with Boeing being given a lease for 767 tankers, through a proper competition that was thrown out by the GAO, and what was expected to be a quick recompete starting this month.

See the actual release at DefenseLink.mil.

Boeing workers want strike, union postpones

Update – The machinists started their strike last night. While some work could be done, no aircraft assembly is possible. This will delay the 787 further, and have a negative impact on their bid for the KC-45.

See a The New York Times story here.

The Boeing machinists voted to strike effective Wednesday night, but the leaders of the Union have given Boeing 48 more hours to come to an agreement. The strike will start tonight if no deal is reached. The leadership decision was controversial and not well received by the members who had voted overwhelmingly to strike. Any extended strike, as Sikorsky illustrated in 2006, will be very disruptive to the delivery schedules for all Boeing problems. It is especially key now as Boeing is expected to turn in their new proposal for the KC-45 soon.

See the St Louis Business Journal for some more information.

Air Mobility Command General pessimistic on tanker

Gen Lichte, the commander of AMC, expressed concern with the pace of the KC-45 recompete. He is concerned that not only will there be further delays in the award, but that the loser will then protest the recompete. DoD, taking over the competition from the Air Force, had originally planned for proposal submission in August. At Boeing’s request they have delayed this until 1 October, with a goal of awarding the contract by the end of Calendar Year 2008. Boeing is asking for more time, claiming that the requirements may drive them to bid a different aircraft then the B767 previously proposed. EADS and Northrop Grumman will most likely use a proposal that is mostly like the one that won last time. They even had the first KC-45 under construction.

Business Week has an article here.

Union and Boeing try to agree

Boeing is negotiating with the machinists union who make up the core of its workforce on both military and commercial aircraft. Today they sent their best and last offer. This includes the employees who will build the tanker for the US Air Force. So in the middle of trying to write and cost a proposal to the Air Force for a program that is seen as key to the company holding onto a market they are trying to prevent work stoppages. Strikes are the kind of thing that can kill a program’s schedule.

See Excite News for more.

Update: The union leaders have recommended rejection of the Boeing proposal and striking on 4 September. While this will have a large effect on civil aircraft production it won’t help Boeing get ready for the KC-45 if they win again.

See Bloomberg.com for a story on this mess.

Former Undersecretary of Acquisition criticizes Boeing

The former Undersecretary of Defense for Acquisition, Technology and Logistics was quoted in a newspaper article criticizing Boeing for wanting a delay in submitting their proposal for the KC-45 recompete. Jacques Gansler who worked in the second Clinton administration said that because of the critical need for the new aircraft if Boeing cannot support the schedule, perhaps they should just not bid. He feels that it would not be proper for the government to give the delay in this situation.

For more see The Guardian.

Boeing and KC-45 in turmoil

After meeting with DoD and the US Air Force to discuss the new tanker RFP due to the GAO upholding their protest, Boeing is now saying that without significantly more time to prepare a proposal they may have to drop out. The new schedule is for the Boeing and Northrop Grumman teams to submit by the end of October with a decision before the new calendar year. Boeing is saying that they may need to bid a larger aircraft then the KC-767 proposed last time due to the fuel capacity and range requirements. A variant of the 777 would have to be used. Boeing supposedly is asking for a more then 180 day delay in the submissions. EADS and Northrop Grumman will most likely submit a tweaked version of their original winning proposal.

For more see The Wichita Business Journal and WashingtonPost.com.

US Air Force to award CSAR-X recompete soon

In a contract that has fallen to the back burner recently due to KC-45 events, the Air Force announced that they would complete the recompete for the CSAR-X by September. Contract award would be soon after. The CSAR-X contract to replace the HH-60 PaveHawk aircraft was originally awarded to Boeing with a variant of the CH-47. Sikorsky and Lockheed Martin protested and won with the GAO ruling that the Air Force did not apply the selection criteria properly. The whole contract was recompeted with Boeing, Sikorsky and Lockheed resubmitting bids.

For more see this article at www.pressconnects.com for the Binghamton area.

Europeon view of KC-45

This article in the Deutsche Welle provides a good round up of the current on goings of the KC-45 recompete. It reiterates that despite rumors on not participating in this round Boeing went ahead and had their meeting with OSD and the Air Force to discuss the RFP. Obviously there is a great deal of interest in Germany, and Europe as a whole, for EADS to win the contract. It would be the largest to date for a primarily European based company.

Next Page »

>