Lockheed to stick to Galaxy budget

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By Stephen Trimble

Manufacturer also aims to provide through-life support

Lockheed Martin will commit to stay within the current budget for a major upgrade to the C-5 Galaxy strategic transport through 2013, despite US Air Force concerns that costs are rising sharply.

Since February, air force leaders have warned that the Reliability Enhancement and Re-engining Programme (RERP) is heading for a so-called Nunn-McCurdy breach, which occurs when a programme's costs exceed the original plan by 30%. The project currently has an $11.3 billion budget for the next six years, but air force estimates show Lockheed's costs rising above $15 billion, or by at least 32%.

Such a Nunn-McCurdy breach would terminate the contract unless the Department of Defense recertifies the need for the programme at the higher cost. Meanwhile, air force officials have suggested shifting funds from the RERP account to pay for additional Boeing C-17 transports.

 
© US Air Force  
A key feature of the C-5M is the transport's replacement CF6-80C2

The USAF and Lockheed are currently negotiating the terms of the first low-rate initial production contract under the programme, the main feature of which replaces the aircraft's TF-33 engines with a new version of the General Electric CF6-80C2 powerplant.

Lockheed will seek to sign a firm, fixed-price contract under the current terms of the programme's budget plan. "We will go firm fixed-price against the dollars we have on the programme," says James Grant, the company's senior director for business development. "We'd like to take this price debate off the table."

The DoD's budget request for fiscal year 2008 includes a $150 million cost increase within the six-year RERP plan, with budget documents attributing this to an "increase in programme development testing requirements".

Lockheed has entered the flight-test phase of the RERP programme, with three converted C-5Ms being evaluated through 2009. The air force plans to evaluate the results before making a final go-ahead decision for the programme.

The current plan calls for all 111 C-5s to be modified by 2020, including 48 Bs to be converted from 2009-13. However, the US House Armed Services Committee last week recommended the retirement of 30 A-model aircraft to free funds for more C-17s.

Grant says contract negotiations for the LRIP-1 award should be completed by mid-June, with the company last week awarded $23 million to acquire long-lead items. In return for the cost commitment, Lockheed will seek a multi-year contract and a more aggressive production rate and is also targeting additional support work. "We would like to play a role in the long-term sustainment of the C-5," says Grant.