Two companies that lost in bidding on the contract, BAE Systems of Sealy, and Navistar Inc., protested after Oshkosh won the contract in August. The companies, in part, questioned whether Oshkosh could make the vehicles at the price it quoted.
The GAO Monday upheld the companies' protests.
"We believe the protest had several merits and we're delighted that the GAO decided to uphold the protests," said Daby Kong with BAE Systems.
The news is welcomed by BAE, which has produced the vehicles in Sealy for the past 17 years.
"It's a bit of good news, absolutely," said Sealy resident Buddy Chance.
Folks living in Sealy who have lived there for years are already breathing a sigh of relief. Take Carrell Wendt, whose son works at BAE. The son has a newborn baby.
"It's great that we can maybe get a second shot at it and look at it on the right terms," he said.
The GAO upheld protests by BAE and local government officials concluding that "The army's evaluation was flawed...," that it was flawed in relation to the evaluation of the other company's proposal.
Sealy Mayor Nick Tirey says retaining the contract now could mean saving 10,000 jobs related to the production of vehicles. He just hopes the Army will pay attention to the GAO's findings.
"Our work is just beginning," said Tirey. "It's a good day. Were happy for the decision, but it's by no means the end of the battle."
The Army has, by law, up to 60 days to reconsider award of the contract.
Senator Kay Bailey Hutchison was scheduled to arrive at BAE to tour the facility and talk about the need to keep the contract here. She is among the Texas legislative delegation who have been fighting for reconsideration.