Both Sides of the Fence

Truck, the movie

Posted by Christine McLaughlin on Feb. 13, 2010 | 8 comments

Oshkosh Corp.

It would make a great movie.

The newer kid on the block, Oshkosh Corp. (henceforward known as “Truck”) wins a dream contract, some $3.2 billion over 5 years to build the Family of Medium Tactical Vehicles (FMTVs) armored trucks for the front lines in Afghanistan.

(Pan in on huge tanky vehicles roaring through sand and water.)

It wins the contract fair and square by underbidding the 17-year exisiting contract holder, BAE Systems, and another favored defense contractor, Navistar.

The older, more comfortable, connected-to-the-establishment BAE pretends to be a lil’ ol’ good ol’ boy from Sealy, Texas, but really is a hoity-toity posh Britisher. And it does not like this one little bit.

Never mind that the Oshkosh bid was 30% lower. Or that everyone knows the good folks in Wisconsin work hard, and often for peanuts, and have a long tradition of producing quality products.

Never mind that BAE has its own long history of delivery and operating "issues" with the heavy FMTV trucks, and that BMO Capital Markets says “The idea that there's a risk in Oshkosh's ability to produce this truck for the Army is almost laughable. . .Given BAE's past record, you could almost argue that they may pose a greater risk than giving the contract to a new supplier."
 
No. BAE is a Texas defense contractor, and it is used to being entitled. Lots of Texas defense contractors are used to getting ginormous contracts without bothering to go through any competitive bidding process, but I digress.

So it decides to sue the Pentagon to get its contract back, arguing that Oshkosh (and what the heck kind of a name is that?!) does not have the capacity to meet its production deadlines.

Never mind that Truck is 5 months ahead of production schedule. Never mind that it has all kinds of excess capacity from a poorly timed company buying frenzy just before the economy tanked. Never mind that the city of Oshkosh is tossing $5 million, the state of Wisconsin $35 million, and Truck $11.5 million into buildings, equipment, and tooling as we speak.

Upping the ante, BAE recruits 25 pistol totin’ (metaphorically speaking, I hope) conservative Texas legislators, headed by the scary senators Kay Bailey Hutchison and John Cornyn, to play hardball.

(That's another mixed metaphor, but this is a Coen Brothers movie. Let’s play loosely with the casting, too. The icy Faye Dunaway for Hutchinson, the loopy and menacing Alec Baldwin for Cornyn.)

Not satisfied with overt legal actions, the posse also threatens to hold up President Obama’s  nomination of Malcolm Ross O’Neill as a new secretary for acquisition, logistics, and technology unless the Army give the contract back to BAE.
 
Now, just for the record, O’Neill is no clueless Chicago intellectual professor type. He’s a  former Lockheed Martin executive and present director of the Pentagon’s ballistic missile defense organization. So aside from the teensy little problem with his being cozied up on the Wall Street side, you can’t really say he’s not qualified.

“We hope to be able to support this nomination when it comes to the Senate for confirmation,” the two wrote Army Secretary John McHugh.  “As you may know, we are extremely disappointed with your department’s recent Family of Medium Tactical Vehicles contract award and the misguided decision to abandon its longtime provider of FMTVs.” (The menacing quality is between the lines, and in some over the top dramatic musical theme.)

I leave it to you to imagine the rest of the screenplay—the part where the less impressive Wisconsin Democrat Senator Steve Kagen marshals his troops, Truck CEO Robert Bohn and an army of beefy welders (my nephew, who works there, among them) stand tall, the Government Accountability Office (GAO) backs down, and the U.S. Army finds Truck to be more than capable.
 
Of course, that’s only half the story. I’ll tell another side later. But for now, congratulations, Truck.