Word: 5a
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...technical flaws plague many major weapons systems, including the Army MBT-70 tank (prime contractor: General Motors), the Navy LHA assault-ship program (Litton) and the Air Force Short-Range Attack Missile (Boeing). Last week all the censure converged on two huge defense projects, the Air Force C-5A transport and the Army AH-56A Cheyenne helicopter. Both are built by Lockheed Aircraft Corp., whose $2.2 billion in sales last year were made almost entirely to the military. Lockheed is the nation's second-biggest defense contractor, after General Dynamics...
Overruns and Cutbacks. The C-5A, at 728,000 Ibs. the world's largest aircraft, has been under intense scrutiny since a Pentagon cost analyst in January leaked reports of ballooning expenses. Rather grudgingly, the Air Force and other sources revealed that the procurement bill had climbed from an anticipated $3.5 billion for 115 of the planes to $4.4 billion for 120 of them. Congressional critics charge that the "overrun" resulted mostly from Lockheed's attempt to win the contract by making an unrealistically...
...Lockheed could suffer enormous losses if Congress forces a cutback in orders. So far, the company has firm orders for 81 of the C-5A's. Even if the full 120-plane run is completed, Lockheed stands to lose $285 million, according to Air Force estimates made public last week. Those estimates purposely tend to downplay the suspicions raised by C-5A foes, who had suggested that the Pentagon and Lockheed had been conspiring to ensure that the company came out of the contract with an ample profit. In any case, Lockheed disagrees with the Air Force loss figures...
Testifying before a congressional subcommittee, Air Force Colonel Kenneth N. Beckman, the officer in charge of the C-5A contract, said that in mid-1968 it became clear that Lockheed's original cost estimate of $2.9 billion for 120 C-5As was too low. The Air Force raised the estimate to $3.1 billion, then raised it again to $3.4 billion to reflect a change in specifications. The actual cost has been nearly $1 billion more than the highest estimate. Yet Colonel Beckman said two of his civilian superiors in the Pentagon approved a juggling of the cost reports...
Self-Study. The day after Beckman's appearance, Defense Secretary Melvin Laird issued an apologetic statement in which he said: "I am determined to ensure that full and accurate information on C-5A procurement, and all other procurement matters, is given to the Congress and to the public promptly. I am also determined to ensure that past mistakes in procurement of this transport aircraft will not be repeated...