Northrop, Textron protests denied by GAO

WASHINGTON - Government auditors on Tuesday denied protests lodged by Northrop Grumman Corp. and Textron Inc. keeping the defense contractors out of a competition to build lightweight tactical vehicles to replace the Humvee.

Both the Army and the Marine Corps have been looking for a new vehicle that can withstand roadside bombs and explosives, but are more agile on mountainous terrain and narrow roads than existing mine-resistant, ambush-protected vehicles being used in Iraq and Afghanistan.

The services are expected to order 65,000 vehicles, which will not enter initial production until 2013. Each vehicle is estimated to cost $400,000, according to Wall Street estimates.

Notice of the Government Accountability Office's decision arrived the same day President Barack Obama made his long-awaited announcement that he will send more U.S. troops into Afghanistan. Congressional officials say an estimated 17,000 troops will go in coming months.

In October, both services awarded deals to General Dynamics Corp. and Humvee maker AM General; Lockheed Martin Corp. and Armor Holdings; and BAE Systems and Navistar International Corp. All three teams will submit seven prototype vehicles, plus four trailers to be evaluated and tested by the services.

The vehicles will be tested for the next 27 months before production awards are made. The Pentagon will then pick two contractors to go forward. It's unclear whether the government will make a final award to a single company or use multiple vendors.

Both Northrop and its teammate Oshkosh Corp., as well as Textron Inc. and partner Boeing Co. filed separate protests with the GAO in November challenging the government's decision.

On Tuesday, Los Angeles-based Northrop expressed disappointment over the GAO's decision. A spokeswoman for Providence, R.I.-based Textron said the company is reviewing the GAO's decision.

Shares of Northrop fell $2.20, or 4.7 percent, to close at $44.99. Shares of Textron added 5 cents to $6.25 in after-hours trading, after falling 69 cents, or 10 percent, in the regular session to close at $6.20.

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Associated Press Writer Anne Gearan contributed to this report.

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