Silver Eagle Clears Air Over Army Contract
November 3, 1999
Trailers built for the U.S. Army’s Humvees have become a “political football” with Silver Eagle Manufacturing caught in the middle, says the company’s president, Gary Gaussoin.
A report issued last week by the General Accounting Office severely criticized the U.S. Army for spending $50.6 million on trailers that, the GAO says, don’t work and may even be a hazard. The report received national media attention.
Sen. Tom Harkin (D-IA), a member of the defense appropriations committee, issued a statement lambasting the Army for wasting taxpayer money. “This isn’t rocket science, these are simple trailers,” he said.
While most of the fury was aimed at the Army, Silver Eagle was named as the manufacturer. The Portland, OR, based trailer components manufacturer was founded in 1933 by trucker and inventor Julius “Judy” Gaussoin. It’s still a family-run operation, currently employing 50 people. “We’re a small business caught in the middle,” says Gary Gaussoin (Judy’s son). Now he’s hoping to set the record straight.
First, the half-ton, two-wheel High Mobility Trailers were indeed built by Silver Eagle, but the company was a subcontractor to Raytheon and thus had no say in the design, materials or requirements.
Second, GAO’s charge that the trailers don’t work is false, Gaussoin says. “We did everything they asked us to do, and the trailers passed test after test over a period of years.” The report cited problems with the trailer’s drawbar, claiming it could break and overturn the trailer or, worse yet, cause “catastrophic failure” by cracking the Humvee’s rear frame. Gaussoin says it was the Humvee bumper that first failed under initial testing.
The bumper was redesigned several times and new tests were conducted. Under more rigorous testing, with a beefed-up bumper, the drawbar broke. But those tests, he emphasizes, were well beyond the mission profile requirements.
“The trailer’s drawbar only breaks when it is tested beyond the original requirements,” he says. He also notes that similar trailers with the same drawbar have been operating in other programs since 1989 with no reported failures.
Gaussoin also wants to clarify reports that the Army ended up paying $10,500 each for trailers originally priced at $6,710. The five-year contract, awarded in 1993, was canceled early due to a cutback in program funding. The Army paid $6,710 for the first 3,029 trailers, then reduced the quantity by 2,263 units. The remaining 2,300 trailers were sold for $10,521 each to make up for fixed overhead costs not covered by the canceled trailers. The average trailer price, he notes, was $8,355.
The Army has parked most of the trailers until it can come up with a solution for the compatibility problem. Silver Eagle has offered to help, but its subcontractor status hampers those efforts. Moreover, the company has been told its involvement in the redesign could give it an unfair advantage in future HMT procurements. The Army is reportedly considering the purchase of 18,000 additional trailers, with a new design, in 2002. Gaussoin says they’ll bid on the contract. “They may not sound smart,” he admits. “But this is the business we’re set up to do.”