UPDATE 1-OshKosh stops work on US Army trucks after protest Tue Sep 8, 2009 1:49pm EDT
Email | Print | Share | Reprints | Single Page [-] Text [+] Market News M&A optimism lifts Wall Street Momentum ushers gold above $1,000/oz | Video Oil posts biggest gain since July on eve of OPEC meet More Business & Investing News... Featured Broker sponsored link
* Oshkosh must stop work on big Army truck contract
* GAO to rule on losing bidders' protests by Dec. 14
* BAE says Army did not properly evaluate the bids (Adds details of protests, byline, analyst comments)
By Andrea Shalal-Esa
WASHINGTON, Sept 8 (Reuters) - OshKosh Corp (OSK.N) said on Tuesday that it received a stop-work order from the U.S. Army on a multibillion-dollar truck contract after two losing bidders, Britain's BAE Systems PLC (BAES.L) and Navistar International Corp (NAV.N), filed protests last week.
Oshkosh won the five-year contract for the Army's Family of Medium Tactical Vehicles (FMTV) on Aug. 27, unseating incumbent BAE Systems in a deal valued by analysts at around $2 billion.
The fixed-price deal calls for Oshkosh to build up to 23,000 vehicles and trailers, and provide support services and engineering.
BAE -- which builds the current mid-size trucks at its Sealy, Texas plant -- and Navistar filed protests over the Army contract award last week with the Government Accountability Office, the congressional office that handles bid protests.
The GAO is due to rule on the issue by Dec. 14.
Oshkosh declined to comment on the protests, but said the Army told it to stop work on the program.
"Our customer informed us that protests on the FMTV contract have been filed and pursuant to the contract, we received a stop-work order. Until we know further details, we really can't comment," Oshkosh said in a statement.
Oshkosh had begun working on the first delivery order under the contract, a deal valued at $281 million for production and delivery of 2,568 trucks and trailers. Initial test vehicle deliveries had been planned for mid-2010, followed by delivery of production vehicles later that year.
In a research note titled, "Moan, moan, moan," Rob Stallard of Macquarie Securities said protests now appeared to be "standard practice for the industry."
Oshkosh shares were up 9 cents at $32.42 in mid-day trading.
BAE Systems, whose shares lost around 4 percent when the ruling was announced last month, said it decided to file the protest after carefully analyzing information supplied by the Army.
"After a detailed analysis of the information provided by the Army, the company believes that the Army did not properly evaluate the proposals," BAE said in a statement. Continued... View article on single page Previous Page 1 | 2 Ne
also, why do they always issue 'In Play' on the next day after the stock has already bounced on old news? Didn't the price increast from sub $5 to $20+ already account for the rosiest of scenarios with multi multi billion revenue already (forget margin discussion , even if you account for rosy margins which is impossible).. company in survival mode, expect another massive dilution
Nice Regurgitation! We know this already and none of it has been substantiated. So, tell us something we don't know. All rumors are false until proven. You SHORTs are so transparent!! Go find some facts and then come back.