December 15, 2015 / 8:39 PM / in 3 years

U.S. GAO dismisses Lockheed protest of $6.75 bln Oshkosh Army deal

WASHINGTON (Reuters) - The U.S. Government Accountability Office on Tuesday dismissed Lockheed Martin Corp’s (LMT.N) protest of a $6.75 billion Army contract for next-generation Humvees to Oshkosh (OSK.N) after Lockheed said it would take the issue to federal court.

U.S. soldiers stand near a Humvee vehicle during the NATO Force Integration Unit inauguration event in Vilnius, Lithuania, September 3, 2015. REUTERS/Ints Kalnins

The GAO said its decision to dismiss the protest was based on Lockheed’s announcement that it would file a protest over the lost contract with the U.S. Court of Federal Claims. A clerk with the court said the protest had not yet been filed.

“Our office will not decide a protest where the matter involved is the subject of litigation before a court of competent jurisdiction,” the GAO said in a statement.

The GAO had been poised to rule on the merits of the case by Thursday but dismissed it once it moved to the federal courts.

Oshkosh said it would resume work on the Joint Light Tactical Vehicle trucks after the U.S. Army lifted a stop-work order that was imposed when Lockheed filed its protest with the GAO in September.

Under the contract, Oshkosh will begin delivering vehicles within the next 10 months, reaching an expected volume of nearly 17,000 vehicles, as well as kits and sustainment services over an eight-year period. Winning the contract could put Oshkosh in a prime position to bid for a total of 55,000 vehicles worth around $30 billion over time.

Lockheed declined to comment. Army officials had no immediate comment.

Jeff Bialos, a former Pentagon official and partner with the Sutherland Asbill & Brennan law firm, said moving protests from the GAO to federal court was a “known and used tactic.”

“You usually do it when you think you have a better case with a judge than with GAO,” he said.

Bialos said Lockheed’s decision to move the case to federal court reflected the intensity of competition for big contracts.

“When dollars get lower and there are fewer acquisition programs, protests go up and people fight more fiercely for these awards,” he said.

Oshkosh said the Army conducted a thorough, methodical procurement, including exhaustive testing and evaluation of the competing vehicles.

Privately held AM General, which built the U.S. military’s original Humvees, did not file a protest against the decision.

Reporting by Doina Chiacu and Andrea Shalal; Editing by Bill Trott and Dan Grebler

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