The Pentagon yesterday abandoned a plan to kill Lockheed Martin Corp.'s C-130J transport plane contract, after determining it would cost almost as much to cancel the program as to complete it.
The decision was praised by the program's supporters in Congress and by Lockheed, which builds the plane at its Marietta, Ga., plant. It was decried as pork barrel politics by critics who have questioned the plane's suitability for service and say termination costs are being exaggerated.
Last year, the Pentagon proposed canceling the $4.1 billion contract, which is close to being fulfilled, as part of broader budget cuts. The Pentagon originally expected cancellation to cost about $640 million. But a recent analysis identified an additional $1.1 billion in termination costs, a Pentagon spokesman said, which meant it would cost only $300 million more to complete the program than to cancel it.
Lockheed has delivered 62 of the planes to the Air Force and Marines and is currently scheduled to deliver 55 more at a cost of about $66 million each.
Several models of the C-130 are used to transport equipment and troops around the world. Lockheed invested $1 billion to develop the latest, or J, version in the early 1990s, expecting to find commercial customers. But they never materialized.
Last year, the Pentagon's inspector general found that many of the new aircraft did not meet contract specifications or operational requirements and that the Air Force fielded aircraft that could not perform the intended mission. The Air Force challenged the findings.
"This is Washington politics at its worst: when the legitimate needs of the troops are ignored by politicians pushing for pork," said Danielle Brian, executive director of the Project on Government Oversight, a watchdog group.
The program has also been under scrutiny because the Air Force is buying the planes with a commercial contract, which does not require Lockheed to provide complete pricing and cost data, including its profit margin. Last month, after facing criticism from Sen. John McCain (R-Ariz.), the Air Force said it would restructure the contract.
