Chief Pentagon weapons buyer Kenneth Krieg reportedly has agreed with recommendations to continue buying new and rebuilt helicopters for the Marines from Bell Helicopter, despite cost increases and production delays.
Senior Navy officials met Wednesday with Krieg and other members of a Defense Acquisition Board, outlining a plan to cope with rising costs by buying just 145 helicopters between now and 2011 instead of 162.
As of Friday, Krieg had not issued a formal decision. But Pentagon sources said that, as expected, he reluctantly agreed that the program for buying new UH-1 Huey and rebuilt AH-1 Cobras should be continued under close scrutiny.
Bell spokesman Mike Cox said company officials had not been informed that a decision was made but are confident that steps have been taken to correct problems and address Navy officials' concerns. We have applied considerable resources to the H-1 program, Cox said.
Bell's continued troubles with the H-1 program, which has been restructured four times to account for rising costs and delays, have been a black eye for the Fort Worth company. The program's price tag has more than doubled from an estimated $3.6 billion to $8 billion since it was launched in 1996.
The Navy now estimates that costs will increase by an additional $600 million.
In an April memorandum, a Navy official was sharply critical of Bell's progress in reducing costs and meeting production schedules and threatened to cancel the program unless fundamental changes were made. That memo came after the Defense Contract Management Agency, an internal Pentagon watchdog, withdrew its approval of Bell's earned-value management system, an internal system for tracking costs and production progress.
Bell's problems with the H-1 program were specifically noted by the Senate Armed Services Committee as part of its 2007 defense authorization bill. The Senate committee expressed concern that Bell could be having similar problems on other key military contracts such as the V-22 Osprey and presidential helicopter. The committee strongly urged the Pentagon and Navy to closely review Bell's management of the programs and those of other military helicopter suppliers as well.
The Navy's top acquisition official, Assistant Secretary Delores Etter, met with senior Bell executives in Fort Worth last month to review steps being taken to resolve problems with production, management oversight and cost controls.
Bell is taking numerous steps to solve the problems cited by the government officials, Cox said. It has submitted a plan to regain approval of its internal management systems that, in part, are used to justify government payments to the company.
Chief Executive Mike Redenbaugh had previously recognized the inadequacy of the company's internal management systems and had already made substantial investments in upgrading the computer systems required to better monitor costs, production progress and quality.
Redenbaugh focused a tremendous amount of resources on fixing the management problems, Cox said.
Bell has promised to deliver the first four of 16 production helicopters by the year's end.
When the production contract for the first nine helicopters was issued in 2003, they were all to be completed and in service this year. Bell is absorbing cost overruns on the first two fixed-price production contracts.
The Marines are trying to upgrade their entire fleet of H-1 helicopters. The Huey transports date to the later stages of the Vietnam War, while the Cobra attack helicopters are mid-1980s vintage.
The Marines say they badly need new and more-capable helicopters to replace those being worn out or lost in combat in Afghanistan and Iraq. But the program delays mean it will be 2008, at least, before a Marine unit can be deployed with new helicopters.
Senior Navy officials met Wednesday with Krieg and other members of a Defense Acquisition Board, outlining a plan to cope with rising costs by buying just 145 helicopters between now and 2011 instead of 162.
As of Friday, Krieg had not issued a formal decision. But Pentagon sources said that, as expected, he reluctantly agreed that the program for buying new UH-1 Huey and rebuilt AH-1 Cobras should be continued under close scrutiny.
Bell spokesman Mike Cox said company officials had not been informed that a decision was made but are confident that steps have been taken to correct problems and address Navy officials' concerns. We have applied considerable resources to the H-1 program, Cox said.
Bell's continued troubles with the H-1 program, which has been restructured four times to account for rising costs and delays, have been a black eye for the Fort Worth company. The program's price tag has more than doubled from an estimated $3.6 billion to $8 billion since it was launched in 1996.
The Navy now estimates that costs will increase by an additional $600 million.
In an April memorandum, a Navy official was sharply critical of Bell's progress in reducing costs and meeting production schedules and threatened to cancel the program unless fundamental changes were made. That memo came after the Defense Contract Management Agency, an internal Pentagon watchdog, withdrew its approval of Bell's earned-value management system, an internal system for tracking costs and production progress.
Bell's problems with the H-1 program were specifically noted by the Senate Armed Services Committee as part of its 2007 defense authorization bill. The Senate committee expressed concern that Bell could be having similar problems on other key military contracts such as the V-22 Osprey and presidential helicopter. The committee strongly urged the Pentagon and Navy to closely review Bell's management of the programs and those of other military helicopter suppliers as well.
The Navy's top acquisition official, Assistant Secretary Delores Etter, met with senior Bell executives in Fort Worth last month to review steps being taken to resolve problems with production, management oversight and cost controls.
Bell is taking numerous steps to solve the problems cited by the government officials, Cox said. It has submitted a plan to regain approval of its internal management systems that, in part, are used to justify government payments to the company.
Chief Executive Mike Redenbaugh had previously recognized the inadequacy of the company's internal management systems and had already made substantial investments in upgrading the computer systems required to better monitor costs, production progress and quality.
Redenbaugh focused a tremendous amount of resources on fixing the management problems, Cox said.
Bell has promised to deliver the first four of 16 production helicopters by the year's end.
When the production contract for the first nine helicopters was issued in 2003, they were all to be completed and in service this year. Bell is absorbing cost overruns on the first two fixed-price production contracts.
The Marines are trying to upgrade their entire fleet of H-1 helicopters. The Huey transports date to the later stages of the Vietnam War, while the Cobra attack helicopters are mid-1980s vintage.
The Marines say they badly need new and more-capable helicopters to replace those being worn out or lost in combat in Afghanistan and Iraq. But the program delays mean it will be 2008, at least, before a Marine unit can be deployed with new helicopters.