Sam Besase worked at BAE Systems, a global defense contractor operating in Sealy, for 14 years. News that the company was facing the loss of its contract to produce tactical military vehicles to the Wisconsin-based Oshkosh Corp. was a blow to workers at the facility and their families, he said.

"I retired in 2006 but I still have many friends working there who are devastated by this announcement," Besase said.

Katy jobs could be lost

Katy business leaders say the loss of 3,000 jobs at the facility, including those performed by 1,000 Katy residents, will impact the local economy and cause ripple effects throughout the areas that help provide the workforce at the plant.

Chris Chambers, vice president and general manager of BAE, addressed members of the Katy Area Economic Development Council at a Nov. 10 general assembly meeting. The Katy resident said BAE, which has operated about 17 years in Sealy, is appealing the U.S. Army's decision because the bidding process was flawed among other reasons.

BAE officials have filed an appeal asking the U.S. Government Accountability Office to review the award. The U.S. Department of Defense is expected to make a final ruling on Dec. 14, Chambers said.

"After examining the Army's process, we believe there are strong indications the services did not conduct its evaluation in accordance with the criteria stated in the Request for Proposal," he said.

BAE has been the longtime government manufacturer of military trucks called Family of Medium Tactical Vehicles, which are used in areas of combat such as Iraq and Afghanistan. But on Aug. 28, the government notified the Austin County arm of the 80-year-old company that it was not selected for the Army's FMTV rebuy program and instead awarded the potentially five-year multibillion dollar contract to Oshkosh.

Activity was bustling at the Sealy plant on Nov. 12, but Ken Clay, an operations manager and Cat Spring resident who has been with the company since it opened, is worried about what the future holds.

Katy Superintendent Alton Frailey said the closure could take its toll on the school district.

"About 1,000 Katy ISD families are being told that they might lose their jobs," he said.

Woody Mann, chairman of the Katy EDC, said the group is taking a proactive strategy in seeking a reconsideration of the decision.

Task force formed

Local leaders quickly formed a task force last month to address the potential closure and protest the decision. Company officials say the facility, which produces about 40 vehicles per day, has an estimated economic impact of $500 million.

BAE's protest is partially based on "best value" meaning that while its bid might not have been the lowest, its expertise and prior performance compared to Oshkosh, should make it less risky for the Army. In addition to BAE Systems, another bidder, Navistar, which is based in Illinois, is also protesting the decision.

Specifically, BAE officials and local business leaders question the financial capability of Oshkosh and its claim to produce the vehicles at a cost of about $500 million or 40 percent less than BAE Systems.

Oshkosh won contract

In September, Oshkosh spokesman John Daggett told the Chronicle that his company is experienced in the Army truck business and "won the contract because its proposal represents the best value to the Army, its soldiers and the nation's taxpayers."

Currently, BAE Systems is working under a bridge contract to deliver FMTVs through the fourth quarter of 2010.

Chambers said BAE has continued to refine the design of the vehicles and workers at the plant are focused on making a product that is reliable and meets the needs of the troops.

"It is the care and attention by them that makes the difference," Chambers said.

Lance LaCour, president and CEO of the Katy EDC, is asking residents to write a letter to Secretary of Defense Robert Gates at 1400 Defense Pentagon, Washington, D.C., 20301-1400 to weigh in on the contract. A sample letter template is available at http://defendtexasjobs.org/default.aspx.

helen.eriksen@chron.com