Sealy, county officials hopeful about BAE's future

Business continues this week as usual at BAE Systems in Sealy, despite a pending protest with the U.S. Government Accountability Office that could very well decide the future of the international business.

BAE Systems announced last week it filed a protest with the federal agency, asking for a review of the U.S. Army’s recent decision to award a multi-million dollar contract for the Family of Medium Tactical Vehicles (FMTV) rebuy program to a competitor.

Despite the harsh news, work continues at the local plant, and Sealy and Austin County officials are hopeful the company will be successful in its appeal.

Already, Oshkosh, the company awarded the bid, has been asked to stop work until further notified.

"It’s not over yet," said Sealy Mayor Nick Tirey. "We know that Congressman (Michael) McCaul is fighting this. Oshkosh has been asked to halt work until further investigation."

Tirey called BAE Systems a major contributor to the local tax base, both in the city and county, and it is. According to the Austin County Appraisal District, BAE Systems has an appraised value of $102.44 million and a taxable value of the same amount for Sealy Independent School District. The taxable amount for Sealy and Austin County, both of which previously granted tax abatements to the company, is $69.38 million.

Sealy councilman Steve Wilson said all indications are that, even with the contract in jeopardy, BAE Systems isn’t going anywhere.

BAE Systems learned last month that it had not been awarded a follow-on contract for the production of the FMTV vehicles after delivering more than 56,000 FMTV trucks over the past 17 years.

After reviewing detailed analysis and information provided by the Army, BAE Systems believes the Army did not "properly evaluate the proposals, consistent with the government’s stated requirements, and the Army failed accurately to assess the various risks associated with the different proposals," the company said in a statement.

"The Army’s stated objective was to conduct a best-value competition based upon a clear-cut set of criteria. We are seriously concerned that this did not happen," said Linda Hudson, president of land and armaments at BAE Systems.

She said there are strong indications, after examining the Army’s process, that the service did not conduct its evaluation in accordance with criteria listed in the request for proposals.

Therefore, the company is asking the GAO to reevaluate the recent decision, an act she said BAE Systems does not take lightly.

Company director of communications Mike Teegardin said it’s hard to know at this point how the recent decision, and appeal, will affect the Sealy plant.

Still, BAE is under contract to produce several more thousand FMTVs to the U.S. Army through next year, and employees will continue to work to meet that deadline, Teegardin said.

"Who knows…maybe they will be successful in their appeal," said Austin County Judge Carolyn Bilski. "I think it’s worth us taking a chance. It is a huge contributor to the county’s well being. It’s sales taxes for lunches, workers shopping and running errands. It is just the quality of life they bring with the employment base."

Still, the county is being cautious. Last week, commissioners voted unanimously to hold off on the 3 percent raise it planned to give across the board to employees until January, when the county has a better handle of what’s going on with BAE Systems.

"It could be devastating. It could really change the way we operate now," Bilski said if the appeal is lost and BAE is forced to layoff employees, slow down business, or shut its doors completely.

McCaul is discussing the contract with top Army officials, and has said the Army’s decision in awarding the contract appears to have been made using a flawed procurement process.

"BAE Systems’ employees in Sealy must be given ample opportunity to prove the superiority of their FMTV product that has become a reliable workhorse for our men and women in uniform over the last seventeen years," McCaul said.

The congressman said he has a lot of concerns beyond the thousands of jobs in jeopardy.

"You just don’t produce 56,000 high quality, safe military vehicles and trailers at the most competitive price for 17 years and suddenly lose a contract. Something is wrong with this picture and I intend to find out what," McCaul noted.

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.

"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."

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