{"id":33165,"date":"2022-12-21T19:38:37","date_gmt":"2022-12-21T19:38:37","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2022\/12\/21\/ongoing-legal-battle-puts-defense-contracting-barriers-in-spotlight\/"},"modified":"2026-08-08T00:44:29","modified_gmt":"2026-08-08T00:44:29","slug":"ongoing-legal-battle-puts-defense-contracting-barriers-in-spotlight","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/govcon\/2022\/12\/21\/ongoing-legal-battle-puts-defense-contracting-barriers-in-spotlight\/","title":{"rendered":"Legal battle over Army vehicle highlights contracting barriers"},"content":{"rendered":"\n

WASHINGTON \u2014 As the Army readies to take the next step in its priority effort to replace its infantry fighting vehicle<\/a>, an ongoing court battle is shedding new light on the challenges faced by non-traditional contractors.<\/p>\n\n\n\n

The lawsuit is between Keshik Mobile Power Systems, a subcontractor, and Point Blank, a prime contractor pursuing the Army\u2019s Optionally Manned Fighting Vehicle<\/a>. Earlier this year, a Florida court issued a decision that appears to have pushed Keshik out of the competition for good. While Keshik is appealing, the window to submit a bid for the next two phases has closed.<\/a><\/p>\n\n\n\n

The Army has put special attention on drawing competition to OMFV<\/a>, which was halted<\/a> in early 2020 after only one bidder \u2014 defense behemoth General Dynamics Land Systems \u2014 offered a prototype.<\/a> The service then reworked the solicitation in a bid to lower barriers to entry and draw more participants.<\/p>\n\n\n\n

In testimony presented during the trial, Keshik asserted the Army was pleased by its offering, telling the company its technology was spurring new innovation. (The Army told Defense News it does not comment on prime-subcontractor relationships and could not comment on pending litigation).<\/p>\n\n\n\n

But the company and Point Blank sparred over funding to advance its technology, according to court testimony, and the fight ultimately ended with Point Blank suing Keshik, accusing the subcontractor of attempting to break their contract and compete against Point Blank.<\/p>\n\n\n\n

In August, a judge in Florida\u2019s 17th Judicial Circuit Court approved an injunction against the company, ordering Keshik to stay out of the OMFV competition unless it teamed with Point Blank and blocking it from hiring any of Point Blank\u2019s remaining subcontractors.<\/p>\n\n\n\n

The Army is now moving forward with Phase 3 and Phase 4<\/a>, covering detailed design and a vehicle prototyping effort respectively. The bidders are primarily well-known defense contractors<\/a>, including BAE Systems, General Dynamics Land Systems and Oshkosh Defense along with leading German combat vehicle-maker Rheinmetall.<\/p>\n\n\n\n

The service plans to select in the spring three winning teams, which will each get $900 million to cover the design and prototype of vehicles.<\/p>\n\n\n\n

Breaking into the business<\/h1>\n\n\n\n

In 2016, Patrick Maloney, a retired Army lieutenant colonel injured in a Bradley while serving, and Franklin Jones, a seasoned engineer, met and started an effort focused on a safer fighting vehicle, Jones testified in an Aug. 12 hearing.<\/p>\n\n\n\n

The two focused on a power control technology that allows dissimilar power producers and power consumers to connect and work together, a Keshik official, who asked not to be named because of the pending court case, told Defense News.<\/p>\n\n\n\n

When the Army in 2020 announced it would reboot the OMFV program after only receiving one bid, Jones testified that the duo saw a new opportunity and formed Keshik \u2014 named after the imperial bodyguards of Mongolian leader Genghis Khan.<\/p>\n\n\n\n

The original OMFV competition required a physical bid sample, a tough requirement for a new company like Keshik. Jones testified that high-fidelity, model-based systems engineering had given him confidence in the company\u2019s technology, but the business hadn\u2019t yet built it.<\/p>\n\n\n\n

Jones said Keshik sought to team with a prime contractor to compete in the concept design phase; the Army planned to select five teams to develop digital design concepts.<\/p>\n\n\n\n

Keshik also needed a partner because bidders were required to have facility-level clearance \u2014 the ability to handle classified material \u2014 and cash on hand to start work before receiving a contract, Jones testified. \u201cKeshik is a company that had never had a penny of revenue and had no paid employees at the time,\u201d he added.<\/p>\n\n\n\n

The company initially teamed with large defense contractor SAIC, but SAIC dropped out in January 2021.<\/p>\n\n\n\n

\u201cKeshik had the concepts that the Army wanted,\u201d Jones said in testimony, \u201cso we set out to find a suitable prime contractor that could act essentially as a passenger, so that Keshik and its team could perform this job.\u201d<\/p>\n\n\n\n

According to Jones, Keshik\u2019s Maloney met Point Blank executive vice president Mark Edwards through a mutual acquaintance. Point Blank was primarily known for producing body armor and protective gear.<\/p>\n\n\n\n

Executives at Point Blank and Keshik convened in February 2021, roughly four months before bids were due for Phase 2, Jones and Edwards confirmed in court testimony.<\/p>\n\n\n\n

The contract opportunity \u201cwas unique in the sense that usually the way the government would solicit it, it would be limited to really companies with the manufacturing capability already installed,\u201d Edwards testified. \u201cThe government really wanted innovation, so they really opened the aperture for non-traditional companies.\u201d<\/p>\n\n\n\n

Keshik and Point Blank quickly teamed up.<\/p>\n\n\n\n

Jones said in court that Keshik executives thought their company would have \u201cfull design control and would manage its team of subcontractors and execute the job.\u201d<\/p>\n\n\n\n

Edwards backed Jones\u2019 characterization of the relationship. \u201cNot only did [Keshik] provide the drivetrain, but they were also the design lead,\u201d he testified. \u201cThey would give work out to subcontractors \u2026 and we would give them purchase orders to support that work.\u201d<\/p>\n\n\n\n

The relationship sours<\/h1>\n\n\n\n

The companies\u2019 relationship deteriorated <\/b>soon after the team won one of the five contracts awarded by the Army to work on design concepts, according to Jones\u2019 testimony.<\/p>\n\n\n\n

They began arguing over money, according to Jones. Keshik needed cash right away to get to work, but the government payments weren\u2019t expected for several months and Point Blank wanted to wait, Jones testified.<\/p>\n\n\n\n

Edwards testified that the Keshik team told Point Blank it needed $8 million to get started. \u201cI about fell out of my seat because we had a lot of conversations, especially when they came in and pitched the idea to us, and that was never included in there,\u201d he said.<\/p>\n\n\n\n

Company representatives also described a discrepancy in the type of agreement that was anticipated. While Jones said Keshik expected to sign a teaming agreement, Edwards indicated in his testimony that Point Blank didn\u2019t intend to move beyond a subcontractor arrangement.<\/p>\n\n\n\n

Tensions continued throughout the first year, typically over payments. Jones testified that Point Blank had, in some cases, paid subcontractors more than 90 days late, but Edwards testified that payments were only ever a few days late.<\/p>\n\n\n\n

Even so, Jones testified the Army was pleased with the team during a systems requirements review in January 2022.<\/p>\n\n\n\n

\u201cWe were being far more responsive to the Army\u2019s requirement <\/a>than any other team and helping them define what was possible,\u201d he said in court. \u201cThey have had difficulty getting the established primes to change their ways, but by having the Point Blank-Keshik team in the midst, they\u2019ve actually been able to move the primes into the future.\u201d<\/p>\n\n\n\t