C-5 Facts of Life

Air Force acquisition guru Sue Payton told reporters Thursday that there are “fact of life changes” that caused the cost of the C-5 reliability enhancement and re-engining program to reach Nunn-McCurdy breach level. Those facts include a steep rise in labor costs, engine costs, and pylon costs first brought to Air Force attention by Lockheed Martin in 2006. USAF then asked for company cost and pricing data for RERP lots 1 through 3, but Payton said Lockheed has failed to provide. And, it’s not just the Air Force that believes the company data is lacking, because both the Defense Contracting Agency and DOD auditors have called the data provided insufficient to start negotiation. Payton said that the service needs to see data provided to Lockheed by the 12 RERP suppliers, each of whom is critical to the program, before USAF “can validate that the truth in negotiations act is not being violated and the taxpayer is being treated fair and reasonably.” She expects to get the relevant data but not until around Nov. 27, which meant USAF had to declare the Nunn-McCurdy breach to meet Congressional requirements. It probably will be mid-January before the Air Force knows whether DOD has “certified” the program for continuance and “what profile of quantities we are going with.” However, Payton added, ” I am totally committed to doing this program. I believe the joint staff is committed to doing this program.”