BAE not selected for FMTV contract

By ASHLEY TOMPKINS, Managing Editor

BAE Systems has not been awarded a follow-on contract for production of vehicles under the Family of Medium Tactical Vehicles (FMTV) program.

The company learned of the decision last week, when it was notified by the U.S. Department of Defense.

Mike Teegardin, BAE Systems director of communications, said it was too early to speculate how the decision will impact Sealy’s BAE Systems and its employees.

“We delivered a strong proposal, which we believe met the best interests of the business, customer and our shareholders,” said Linda Hudson, president of BAE Systems Land and Armaments. “While this news is disappointing, we are proud of what we have achieved in making the FMTV the medium tactical vehicle of choice for the Army during the past 17 years. We remain committed to implementing a global land systems strategy, particularly in the areas of readiness and sustainment and export activities.”

Congressman Michael McCaul, R-Austin, met with BAE’s Sealy leadership on Aug. 27 upon hearing the news.

“I met with BAE’s Sealy leadership team to discuss the decision and to assure them I will take all actions necessary on their behalf,” McCaul said. “I do not believe this is a done deal. Once BAE determines whether it will appeal the Army’s decision I personally will lead congressional efforts on behalf of the company and the community to make sure BAE has ample opportunity to compete for the FMTV contract and continue its successful and vital operations in Sealy.”

Still, Teegardin said BAE Systems is under contract to produce several more thousand FMTVs to the U.S. Army through next year. Employees will continue to focus on meeting that deadline. The company’s financial planning assumptions anticipate sales in 2009 and 2010 at approximately $2 billion.

It is not anticipated that this planned activity will be impacted by the government’s most recent decision.

BAE had planned for FMTV sales to reduce to less than $1 billion per year starting in 2011. During the past 17 years, BAE Systems has delivered more than 56,000 FMTV trucks and trailers and developed a long-term armored strategy to make the FMTV the safest, most reliable medium tactical vehicle it can provide to the armed forces.

“We’re extremely proud of the work that we’ve done for the U.S. Army and for the soldiers and marines serving overseas who have used our vehicles and continue to do so,” Teegardin said. “Our vehicles have a 94 percent operational readiness rate (in Iraq and Afghanistan), which means these vehicles are ready to go when the soldiers and marines need them.”

In addition to its contract to produce FMTVs through 2010, BAE Systems continues to support the U.S. Army’s FMTV program through its public-private partnership with Red River Army Depot for the reset and support of FMTVs, and through its field support representatives deployed around the world.

The company said it would continue to fulfill all its commitments as it reviews the Army’s latest decision regarding the FMTV rebuy program.