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Senators Levin and McCain Send Questions on F-35 Reprogramming

Earlier this week it was reported, and tweeted, by Senator John McCain (R-AZ) that the Department of Defense as part of a reprogramming request needed $264 million to cover cost increases on the first three Low Rate Initial Production (LRIP) contracts for the F-35 Joint Strike Fighter (JSF). Now Senator Levin (D-MI) the Chairman of the Senate Armed Services Committee (SASC) and McCain, the Ranking Member, have sent a letter with a series of questions to OSD about the reprogramming and the Government’s obligations to lead contractor Lockheed Martin (LMT).

The Omnibus Reprogramming request which is often annually submitted to Congress by OSD allows the move of large amount of funds from different appropriations and services to pay higher priority bills. Often during the years of heaviest engagement in Iraq and Afghanistan it converted Research & Development (RDT&E) and Procurement funds to those used to pay for Operations and Maintenance (O&M). In this years’ it asked for the $264 million to be reprogrammed to pay for “cost growth on the first three F-35 low rate initial production lots (LRIPs 1-3).” It also informed the Congress that there would be a requirement for a further $496.2 million found within JSF’s funding to pay for the rest of the cost increases coming to a grand total of $760.2 million.

The letter asks the Department to answer a series of questions and says the reprogramming won’t be considered until they are answered. These include whether the Government is legally obligated to pay the cost increases, what would be the effect if the request for reprogramming was denied, what other alternatives are there, are the cost increases recoverable, what would be the termination costs for the F-35 program, and how Defense intends to prevent these types of overruns in the first place.

This is the second time in recent months that McCain has raised the specter of cancelling the F-35 contract. Earlier he had tried to have an amendment added to the Authorization Bill requiring termination if cost growth was above a certain point. That failed in Committee by one vote. Now it is clear that Levin, the senior Democrat on the Committee and Chair, is willing to at least put the question out there.

Termination costs for a contract like the F-35 development and production would most likely be in the billions. While McCain has led discussion of this idea it will be hard for the Government to end the program. There is still a requirement for a new aircraft to replace the aging F-16, F/A-18 and AV-8A systems in current inventory. The U.S. has finished buying F-22 and the production line will be shutting down. The F/A-18 is available but any other exiting aircraft that might be considered is non-U.S. A new development program could be started but that would probably end up being more expensive then the current F-35.

Even so the continued cost growth in the program is leading many in Congress to reconsider the future investment in the F-35 in this time of budgetary pressures. McCain especially seems likely to keep up the pressure on the program and Lockheed.

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Defense Department Reiterates Stand on C-17 Production

The C-17 transport has been in production now for almost twenty years and forms the backbone of the U.S. Air Force’s strategic lift. It replaced the Cold War era C-141 aircraft and has been built by Boeing (CA) at their plants in Long Beach, CA and St. Louis, MO. The Air Force actually possesses more C-17’s then originally planned because Congress has been adding them to the budget for the last few years. In 2010 the new Obama Administration did not request any further production of the system but Congress added them and the President did not follow through with a veto.

The 2011 defense budget also contained no C-17 procurement and this has been met with a better reception by Congress in general. There are still those Senators and Representatives from California, Missouri and Kansas who would like to see more aircraft built. They are certainly being used, but the Air Force and DoD argue that the money could be spent on more important parts of the defense budget. There are also concerns that when the Congress adds aircraft they do not necessarily fund the support which takes money out of the budget as well.

The Long Beach plant will close when production of the aircraft ends which would be a big blow to the local economy.

Despite Congress’ better attitude this year the Department must have some concerns as they released a strongly worded article yesterday detailing the reasons why no more aircraft are needed. This reads in part “..defense officials agreed with the subcommittee’s leaders, Sens. Thomas Carper and John McCain, that the C-17, in addition to the C-5, has been critical to airlift in and out of Iraq and Afghanistan. However, they said, the military’s current fleet of 223 C-17s and 111 C-5s is more than enough airlift capability for years to come.” It also contains a threat as last year that the President “.. has promised to veto any legislation that provides for more C-17s.”.

Does that mean there will be no more U.S. orders for the C-17? It might, and it might not. Congress is loathe to end programs like this that are not only successful, used and provide several hundred jobs across the U.S. Boeing certainly would like to keep the line going. The defense budget looks like it may make it to the floor of the Senate and House without C-17. That allows floor amendments and the conference committee to add the transports. If the Congressional leadership is disciplined it may end up without additions.

The other concern is how well Congress believes Obama will veto the bill over a few billion spent on the C-17. If they don’t think he will in the end as happened last year then the aircraft quantity may increase.

Photo from TMWolf Flickr photostream.

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John McCain Inserts Himself Into KC-X Competition

October 23, 2009 by · Comment
Filed under: KC-X, KC-X Tanker News, Syndicated Industry News 

Senator John McCain (R-AZ) whose efforts frustrated the Air Force’s attempts to award Boeing a lease deal for the new tanker back in 2001 – 2004 started the whole competition now says that he wants an independent “watchdog” as part of this source selection. He was not clear as to who he would want to do this but hopes to have an unbiased source selection.

If there is a protest over the latest attempt the GAO will be the “independent” agency tasked with sorting that out. If they fail there is always the U.S. Court of Appeals. Those should be independent enough for Senator McCain.

GAO to decide KC-45 protest soon

This article is a good summary of the KC-45 contract. The GAO is supposed to rule on Boeing’s protest within the next two weeks. One would have to bet that they will disallow the protest. There is a chance though, that somehow the Air Force screwed up in how they applied the criteria. Then the process would be reopened again, like the CSAR-X. The article also raises the issue of the US Presidential election. John McCain was the key person that got Boeing in trouble over the attempted lease deal five years ago, and Senator Obama represents the state where Boeing now has its headquarters. Congress has also held off weighing in while the protest wound its course. It is best to think that this is not over yet.

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Democrats plan to interfere with KC-45

In this story it is clear that the Democratic members of Congress will interfere with the KC-45 award, no matter what the GAO says. The House is moving to defund the program if the GAO opens up the contract. Mr. Murtha misspoke when he said that the GAO would overturn the award. They cannot do that, just direct, as with the CSAR-X award, that the source selection be reopened. It is also clear that members from states that Boeing is in will move to conduct an investigation no matter what that will delay the program. It is also interesting that they are now blaming John McCain, the Republican presidential candidate, for throwing out the lease with Boeing. They weren’t supporting Boeing when their executives and USAF acquisition people were going to jail over the deal. As previously reported any attempt by Congress to muddle up the deal purely on political and nativist grounds will only make it difficult in the future to get competition on other contracts.

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