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Pentagon Seeks Relaxed Standards for Troubled C-17

February 11, 1994

WASHINGTON (AP) _ The Clinton administration wants to further relax performance standards on the Air Force C-17 transport plane and pay $348 million to revive the troubled program it may cancel next year.

Although costs are rising steadily and performance declining, the Pentagon’s top acquisition official, John Deutch, said Thursday that the C-17 nevertheless delivers ″absolutely critical″ airlift capability to ground forces.

After Deutch’s testimony before the House Armed Services Committee, a congressional investigator questioned the usefulness of the program and said there are cheaper alternatives. Deutch, before leaving the hearing, conceded that the cost increase in the C-17 program ″is awful.″

Both Deutch and Frank Conahan, who led an investigation of the C-17 for the General Accounting Office, the investigatory arm of Congress, presented a grim picture of the C-17, a plane conceived during the Reagan administration.

In 1990 the Pentagon estimated it would cost $41.8 billion to buy 210 of the wide-bodied jets. This year, the latest Pentagon estimate is that it would cost $43 billion to buy 120 aircraft - an 82 percent price increase on a per- plane basis. And the GAO questions whether even that new cost goal can be reached.

McDonnell Douglas Corp., which builds the aircraft in Long Beach, Calif., has amassed $1.2 billion in claims against the government for failure to cover its costs, among other things.

The Pentagon, meanwhile, is investigating a series of problems with the C- 17 including cracked wings, faulty wing flaps, faulty landing gear, and payload performance.

Deutch asked the committee to approve a proposed settlement between the Pentagon and the contractor. McDonnell Douglas would waive its $1.2 billion in claims against the government and invest $454 million to complete flight tests and improve management and construction.

The Pentagon would spend $348 million to settle outstanding claims and cover its portion of the flight test program. It would agree to buy at least 40 aircraft but could then terminate the program in November 1995.

In addition, Deutch said, the Pentagon would agree to ″significantly relax″ payload and other performance standards that the C-17 has already shown it cannot meet.

The administration is requesting $2.98 billion in its defense budget for six C-17s and plans to seek funding for another six next year. Eight C-17s are flying and 20 more are under construction.

Conahan questioned the settlement. He said much of the money McDonnell Douglas would be required to pay it would have spent anyway. He questioned whether the contractor could improve the significant flaws in its performance in the next 20 months.

Committee members picked up on the theme.

″I was a fan of this aircraft because the Army needs it so desperately,″ said Rep. Norman Sisisky, D-Va. ″But we’re talking about a lot of money here.″

And Rep. Gene Taylor, D-Miss., said, ″It seems we’re going to deliver suitcase loads of money over to McDonnell Douglas with nothing in return.″

″Don’t put me in the position of saying, ’I think this is a terrific program,‴ Deutch said. ″I’m on your side.″

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