The US Air Force urgently needs to replace 115 aging HC-130 and MC-130 aircraft, built by Lockheed Martin Corp and used to refuel helicopters and support special forces operations, a senior official told Reuters on Wednesday.
The service's top weapons buyer, Sue Payton, said some funding for replacement aircraft would be included in the Air Force's budget request for fiscal 2009, but gave no details. She also said the Air Force still aimed to make a contract award by December in a $40 billion competition between Boeing Co and Northrop Grumman Corp to replace KC-135 refuelling tankers, which are over 40 years old on average.
"I think things are going very well," Payton said in a wide-ranging interview. "We're optimistic. I'm still holding to December, and we'll see how things go." The Air Force also remains in discussions with Lockheed about cost overruns in a multibillion program to put new engines on another ageing plane, the C-5 military transport that is used to ferry tanks and weapons to war zones.
She said the Air Force clearly needed C-5 transports, but it was unclear if it required all 111 it currently operates. Those planes are 35 years old on average. The cargo plane program looked likely to breach the upper congressional threshold of 25 percent cost growth for big weapons programs, which would trigger an automatic review by the Pentagon that could lead to termination, Payton said.
Details were still being worked out with Lockheed, which must share in the cost overruns with the government, she said. Lockheed has offered to do the upgrades for $11.6 billion, but Payton said the company must provide more certified pricing and cost data before the Air Force could accept those numbers. A decision could come on Friday, she said.
Costs of the program were rising mainly due to titanium prices, which have soared 500 percent since 2003, driving up the cost of the four engines used on each C-5, she said. A need to strengthen the wings on some C-5s to accommodate new pylons and other upgrades had also increased costs.
Payton said the Air Force was too optimistic when it forecast back in 2001 that the upgrade program would cost $11.1 billion. For example, corrosion and stress cracks were often found while doing the engine upgrades. She said the C-130 airplanes were over 42 years old and increased use in Iraq and Afghanistan was leading to greater wear and tear, resulting in declining availability and rising maintenance costs.
Payton said a recent analysis showed no other producer for the aircraft beside Lockheed, but the Air Force could move to a full competition in future years. "Right now, because we've done some market analysis, we're not seeing any other source for the aircraft, so we may get started, and then as more competition comes in the marketplace, we may hold a competition."
Payton said the Pentagon's Joint Requirements Oversight Council was reviewing the need for the aircraft, but had yet to issue a memorandum needed to begin purchases. "We have to understand all the requirements before we go out and decide what our acquisition strategy is going to be," she said.
Jim Grant, Lockheed's vice president for aeronautics business development, said the C-130J, the newest version of the plane, was meeting a wide range of tactical airlift missions for the Air Force on a daily basis.
"The C-130J is already providing reliable intra-theater support and a KC-130J-based solution for both HC-130 and MC-130 recapitalization would provide a readily available, low-risk solution," Grant said in remarks at the annual Air Force Association meeting. The Air Force currently has 115 M and H models of the C-130 aircraft, comprised of 37 flown by Air Force Special Operations Command, and 78 by Air Combat Command.