WASHINGTON - The US Army said Wednesday it will renegotiate a contract with Boeing Co. to restore taxpayer protections to a 125 billion dollar project to develop manned and unmanned combat vehicles.
The move comes amid Congress concern about rising costs of the army's premier weapons program as well as lingering fallout from an air force procurement scandal involving the aerospace giant.
Senator John McCain, a senior Republican, had complained that the contract used with Boeing lacked certain customary provisions aimed at preventing fraud and requiring access to cost and pricing data that ensure fair prices are being paid.
Army Secretary Francis Harvey, who said the issue had been under review by the army for two months, said he told McCain on Monday he was "in total agreement with him."
The type of contract will be changed from one that waives the taxpayer protections to a standard defense contract with the full protections, he said.
He said, however, there were no plans to review the 20 billion dollars spent so far under the contract.
"It's been audited pretty extensively and I know of no irregularities," Harvey said.
Boeing was tarnished last year by an air force procurement scandal that landed the company's former chief finaical officer Michael Sears in prison for his role in recruiting a top air force procurement officer, Darleen Druyun, for a top job at Boeing.
Druyun was sentenced to nine months in prison for favoring Boeing in air force contracts.
McCain led a successful campaign to scuttle a Boeing contract to lease air-refueling aircraft to the air force that Druyun had helped negotiate.
Harvey said the changes in the army contract would not alter Boeing's role as the "lead system integrator" of the Future Combat Systems, nor did he expect it to result in any signficant cost increase to the army.
He said special contracts with fewer constraints on contractors made sense in the initial phases of a program to develop a new kind of weapon. But for the Future Combat Systems, he said, "that time has passed."
The program envisions developing new manned and unmanned air and ground vehicles by 2014 that would be netted together with advanced communications systems.
The army last year restructured the program, stretching out the program by four years, which has added to rising costs.
Harvey said the program's cost were now estimated at 122 to 125 billion dollars, up from about 80 billion dollars.
General Peter Schoomaker, the army's chief of staff, said the restructuring aimed to mesh the development of the new weapons systems with the army's current reorganization into smaller, more modular brigade-sized units.
Unmanned elements of the new system will be fielded with the new modular units, followed by the manned vehicles as they are developed, the officials said.
By spiralling new systems into force as soon as they are developed, the army hopes to avoid "discontinuity where we were waiting for the Starship Enterprise to arrive and we were going to leap through space on it," Schoomaker said.
04/06/2005 17:36 GMT