Litton Data Systems has lost a $58 million US Air Force contract to upgrade 20-year-old computers used to protect the USA and Canada against hostile aircraft, after the company projected a 700% increase in the estimated cost to complete the work.
The USAF says the joint USA/Canada Region Sector Air Operations Centre Modernisation programme was deemed unaffordable because of cost growth and schedule slips. A re-evaluation of the effort needed to complete the North American air defence computing and display system upgrades was a factor in the contract's termination, admit USAF officials.
The USAF awarded the contract to Litton two years ago, with the computer hardware and software upgrades at six regional air operations centres to be completed by the end of this year. "As Litton better understood what the users expected, it became apparent that the early cost estimates needed to be adjusted. It became obvious that we were not able to pursue this particular acquisition approach," says USAF Col Kenneth Whitley, the programme manager.
He says the USAF is developing a new competition, which sources say will be open to all bidders, including the Litton unit. The sources say Litton would have "a distinct advantage here", but Litton says it has yet to decide whether it will recompete. Whitley says: "It is the government's belief that we will be able to deliver a more cost-effective system through a new competition." It has not been determined when the request for proposals will be issued.
Whitley believes some of the hardware and software developed by Litton can still used for the new modernisation effort, which could take as little as a year or as much as five years to complete.
Litton says it has met every contract milestone since 1997. Industry sources say cost became an issue "when additions were made to the programme by the USAF, which made the programme unaffordable."