From The Houston Chronicle:
WASHINGTON — The Pentagon’s decision to shift the production of Army trucks from Texas to Wisconsin after 17 years caught Texas’ elected officials by surprise, raising questions about overconfidence, a loss of political clout and the impact of economic incentives provided to the winning company by Wisconsin’s Democratic governor.
Texas Republican Gov. Rick Perry and the 34-member Senate-House delegation are rallying to salvage a deal for BAE Systems that could be worth $2.6 billion and sustain 10,000 direct and indirect jobs around the sprawling truck manufacturing plant in Sealy.
But as one Democratic operative puts it: “That’s like having a party in the corral after all the horses have run out.”
The 92-year-old Oshkosh Corp. undercut BAE Systems’ bid by roughly 10 percent. The Wisconsin company had support by a predominantly Democratic congressional delegation that helped Barack Obama carry the state last November. And the truck builder reaped the benefits of state assistance crafted by Wisconsin Gov. Jim Doyle.
Elected officials in Texas assumed the contract would remain in their state, relied on networks of support built up during Republican control of the White House and Congress and did not provide BAE Systems any state assistance.
“It sounds to me like complacency may be the biggest factor in Texas losing this contract,” says political scientist Paul Light of New York University. “The Army made a decision to give the contract to the lowest bidder. If I were an elected official from Texas, I’d stop whining and start asking questions about why Texas didn’t put up the dollars to help the company keep that contract.”
The congressional watchdog, the Government Accountability Office, expects to decide by mid-December the outcome of BAE Systems’ appeal of the Army decision.
“We are hopeful the government will reverse the decision in the interests of the U.S. military and the U.S. taxpayer,” says BAE spokesman Michael Teegardin.
The setback for Texas illustrates just how far the state’s political leverage has plummeted since Sen. Lloyd Bentsen, D-Houston, helped BAE’s predecessor win the initial contract in 1991 under President George H.W. Bush, and Sens. Phil Gramm, R-College Station, and Kay Bailey Hutchison, R-Dallas, helped the company retain the contract in 2001 under President George W. Bush.
“We never saw this coming — we were completely blindsided,” says a top aide to Sen. John Cornyn, R-San Antonio, a former member of the Senate Armed Services Committee panel with jurisdiction over military vehicles.
Lawmakers and BAE officials alike felt “sucker punched,” added David Davis, a top Hutchison aide.
I’m not so convinced that KBH (Kay Big Hair) is freaking out over this. Is she going to use this in her campaign against Governor Goodhair? I can imagine her saying, “Hey y’all, I got that durned contract for Texas, and Little Ricky screwed it up for all of us!”
Rep. Michael McCaul, R-Austin, whose Austin-to-Houston district includes the plant, learned of the Army’s decision while driving to an appearance in his district in late August. He and press secretary Mike Rosen immediately diverted to visit BAE officials in Sealy.
“In a time of war, terminating a relationship with a proven manufacturer does not seem to be a prudent choice,” McCaul subsequently wrote Defense Secretary Robert Gates in a letter signed by 25 members of Texas’ 32-member House delegation.
One congressional aide said Texas lawmakers should have been more alert to the possibility of losing a contract that Oshkosh had tried to win in 2001.
Some Texas Democrats have seized upon the lost contract to criticize GOP officials. “Job protection is really job No. 1 for a member of Congress,” says former Democratic Rep. Chris Bell, a former Houston City Council member who served one term in the House before losing in 2004.
McCaul failed to enlist Democrats in Texas’ congressional delegation such as Rep. Chet Edwards, D-Waco, to help protect the contract in a Democratic administration, says Matt Angle, a longtime Democratic operative who heads the political action committee known as the Lone Star Project.
Some members of Texas’ congressional delegation suspect political interference. There was “a political push that was inappropriate,” said one Senate aide
McCaul, a former Justice Department prosecutor and former Texas deputy attorney general, said Pentagon contracts should be awarded “based on quality, realistic cost and how quickly the product can get to our troops on the battlefield.”
But Jay Kimmitt, head of the winning company’s Washington office, says Oshkosh won the contract on the merits without “inappropriate and unnecessary” intervention by the governor; Sens. Herb Kohl and Russ Feingold; or Rep. David Obey, chairman of the House Appropriations Committee.
Ellis Brachman, spokesman for the House Appropriations Committee, said the powerful chairman played no role.
The $35 million in tax breaks and the economic assistance provided Oshkosh over 12 years signal that “Wisconsin is open for business,” Doyle said. But the truck manufacturer says the assistance “did not make the difference” in the outcome of the bidding.
But Light, the political scientist, noted: “It doesn’t sound like Texas has much maneuvering room in the bid protest — a 10 percent difference in price is huge on a multibillion-dollar contract.”
I don’t know why the Rethugs are so up in arms about this. After all, Texas is recession-proof. Right, Little Ricky? And it’s not like those 10,000 workers will have to worry about losing their health insurance or anything.