Oshkosh wins military truck contract; Arkansas finishes out of the money | Arkansas Blog

Tuesday, August 25, 2015

Oshkosh wins military truck contract; Arkansas finishes out of the money

Posted By on Tue, Aug 25, 2015 at 4:24 PM

NO CIGAR: Gov. Hutchinson in file photo with a Lockheed Martin prototype for a bid competition it lost today.
  • NO CIGAR: Gov. Hutchinson in file photo with a Lockheed Martin prototype for a bid competition it lost today.

The Pentagon announced today that Oshkosh Defense of Wisconsin had won a $6.75 billion, 25-year contract to build a new generation of tactical vehicles for the Army and Marines. It's to be a successor to the Humvee.

Oshkosh beat rivals including Lockheed Martin, which had a commitment from the state of Arkansas for $100 million-plus (counting interest on bonds) in Arkansas taxpayer subsidies to build the vehicle at its plant in Camden. It was perhaps not a good day for the Pentagon to pick Lockheed, just yesterday fined almost $5 million for illegally spending federal money to lobby for defense work. Here in Arkansas it isn't illegal to spend public money on private enterprise. We even volunteer it.

Oshkosh had more experience in the vehicle business than Lockheed and was prepared to be a lower-cost option. Indeed, the Arkansas subsidy of Lockheed — whose annual budget far outstrips that of the state of Arkansas — was said to be necessary to make Lockheed more price competitive. AM General also made a bid. All made prototype vehicles that were evaluated in making the final decision.

Arkansas has lost out on previous assembly plant projects and has worked on improving worker training to make the state more competitive.

Gov. Asa Hutchinson had pushed hard for the project, which had roots in the Beebe administration.

The link at top to USNI news includes the full Pentagon release on the decision. It said in part:

“With America’s Soldiers and Marines in mind, the program team successfully met both Services’ requirements for affordable, achievable capability advancements that will make a true difference,” said Sean Stackley, the Assistant Secretary of the Navy (Research, Development, and Acquisition). “Today’s award brings us a step closer to delivering a flexible vehicle that balances the payload, performance, and protection critical in the operating environments of today and tomorrow.”

More on the decision from Lance Turner at Arkansas Business, who notes analysts had given the edge to Oshkosh.

The governor and others issued statements through his economic development agency:

“While Lockheed Martin was not selected as a contractor by the Department of Defense, the state of Arkansas did the right thing by supporting Lockheed Martin to make sure they were competitive,” said Governor Asa Hutchinson. “There is no doubt that we were competitive in terms of price, our workforce is second to none, and I remain very grateful for Lockheed Martin’s investment and confidence in our Camden facility. That investment will pay off in the long term.”

“While the JLTV will not be manufactured in Arkansas, our participation in this project will ultimately benefit southern Arkansas,” said Arkansas Economic Development Commission Executive Director Mike Preston. “Lockheed Martin has added some of the most advanced technology in manufacturing at their Camden facility and I have no doubt this combined with the area’s workforce will bring growth opportunities to the company in the near future.”

“I am disappointed in this decision but will continue to work with federal, state and local leaders to create future job opportunities for Arkansas,” U.S. Senator John Boozman said. “I am optimistic that Lockheed Martin’s facility in southern Arkansas will continue to play an important role in support of our nation’s defense."

“I am disappointed the Army did not select Lockheed Martin to build the JLTV,” said U.S. Senator Tom Cotton. “Camden is a first-rate facility and the people who work there are some of the best in the world. I know they would have put their hearts and souls into this project. It is reassuring to know that JLTV will protect our service members—including the many who call Arkansas home—no matter where it is produced.”

Here's how the Milwaukee paper reported the win by a Wisconsin-based company of a contract that several estimate could be worth $30 million in time with purchase of some 55,000 vehicles. Oshkosh had said previously it did not depend on state incentives or bonds in its bid.

Lockheed could contest the award. So far it says it needs to review the decision further before choosing that option.

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