By Jim Wolf
WASHINGTON, Dec 4 (Reuters) - Lockheed Martin Corp defended on Thursday a contract clause that irked the Pentagon's top arms buyer and that could cost U.S. taxpayers as much as $147 million to end output of the F-22 fighter jet.
Lockheed, the Pentagon's No. 1 supplier by sales, also denied it would be bucking industry practice by imposing a so- called 'tail-up' clause as part of a three-year, 60-plane deal that could end production at 183 aircraft.
'Tail-up describes the inefficiencies that occur at the end of an aircraft production line,' said Sam Grizzle, a company spokesman. 'Tail-up costs have occurred at the end of virtually every U.S. military aircraft production line.'
John Young, the undersecretary of defense for acquisition, said in a statement that Lockheed was planning to seek $147 million to wind up its production line.
'In my view, the Air Force should not have negotiated a punitive tail-up provision which pressures (the Office of Secretary of Defense) and Air Force leadership to purchase additional aircraft,' he said.
'Our industry partners generally work to efficiently complete production programs, and they do not seek tail-up provisions,' Young added in the statement relayed by his spokesman, Chris Isleib.
An Air Force spokeswoman on acquisition issues, Lt. Col. Karen Platt, had no comment. The Air Force also continued to withhold comment on criticism of the F-22's performance outlined two weeks ago by Young.
Young told reporters on Nov. 21 that the Air Force's fleet of radar-evading F-22 Raptors, designed to be the world's top fighter, needs more than $8 billion of upgrades to be made 'capable and affordable to operate.'
His critique highlighted Pentagon opposition to buying more than the 183 F-22s on order. Absent new orders from the administration of President-elect Barack Obama, Lockheed is due to inform its suppliers of shutdown plans early next year.
Congress has approved up to $140 million in bridge funds for 20 F-22s to be purchased in fiscal 2010. If Obama's team signs on to continued production by March 1, another $383 million can be spent on parts that require a long time to produce.
On Nov. 10, Young stopped short of spending the full $140 million in bridge funds, releasing only $50 million as a kind of down payment on an Air Force deal with Lockheed on four more F-22s.
'The Defense Department is seeking to respect the congressional intent and to allow the next administration to decide the F-22 production issue without the pressures of large, sunk taxpayer costs or the penalties of production price increases,' Young said in the statement made available through his spokesman.
Lockheed produces the F-22 in partnership with Boeing Co and United Technologies Corp's Pratt & Whitney, which builds its dual F-119 engines.
In June, Defense Secretary Robert Gates ousted the Air Force's top military and civilian leaders amid a tug-of-war over funds for the F-22, which he considers ill-suited for post-Cold War conflicts such as Iraq and Afghanistan.
(Reporting by Jim Wolf; Editing by Andre Grenon) Keywords: USA FIGHTER/LOCKHEED (jim.wolf@thomsonreuters.com; +1-202-898-8402; Reuters Messaging: jim.wolf.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Dec 4 (Reuters) - Lockheed Martin Corp defended on Thursday a contract clause that irked the Pentagon's top arms buyer and that could cost U.S. taxpayers as much as $147 million to end output of the F-22 fighter jet.
Lockheed, the Pentagon's No. 1 supplier by sales, also denied it would be bucking industry practice by imposing a so- called 'tail-up' clause as part of a three-year, 60-plane deal that could end production at 183 aircraft.
'Tail-up describes the inefficiencies that occur at the end of an aircraft production line,' said Sam Grizzle, a company spokesman. 'Tail-up costs have occurred at the end of virtually every U.S. military aircraft production line.'
John Young, the undersecretary of defense for acquisition, said in a statement that Lockheed was planning to seek $147 million to wind up its production line.
'In my view, the Air Force should not have negotiated a punitive tail-up provision which pressures (the Office of Secretary of Defense) and Air Force leadership to purchase additional aircraft,' he said.
'Our industry partners generally work to efficiently complete production programs, and they do not seek tail-up provisions,' Young added in the statement relayed by his spokesman, Chris Isleib.
An Air Force spokeswoman on acquisition issues, Lt. Col. Karen Platt, had no comment. The Air Force also continued to withhold comment on criticism of the F-22's performance outlined two weeks ago by Young.
Young told reporters on Nov. 21 that the Air Force's fleet of radar-evading F-22 Raptors, designed to be the world's top fighter, needs more than $8 billion of upgrades to be made 'capable and affordable to operate.'
His critique highlighted Pentagon opposition to buying more than the 183 F-22s on order. Absent new orders from the administration of President-elect Barack Obama, Lockheed is due to inform its suppliers of shutdown plans early next year.
Congress has approved up to $140 million in bridge funds for 20 F-22s to be purchased in fiscal 2010. If Obama's team signs on to continued production by March 1, another $383 million can be spent on parts that require a long time to produce.
On Nov. 10, Young stopped short of spending the full $140 million in bridge funds, releasing only $50 million as a kind of down payment on an Air Force deal with Lockheed on four more F-22s.
'The Defense Department is seeking to respect the congressional intent and to allow the next administration to decide the F-22 production issue without the pressures of large, sunk taxpayer costs or the penalties of production price increases,' Young said in the statement made available through his spokesman.
Lockheed produces the F-22 in partnership with Boeing Co and United Technologies Corp's Pratt & Whitney, which builds its dual F-119 engines.
In June, Defense Secretary Robert Gates ousted the Air Force's top military and civilian leaders amid a tug-of-war over funds for the F-22, which he considers ill-suited for post-Cold War conflicts such as Iraq and Afghanistan.
(Reporting by Jim Wolf; Editing by Andre Grenon) Keywords: USA FIGHTER/LOCKHEED (jim.wolf@thomsonreuters.com; +1-202-898-8402; Reuters Messaging: jim.wolf.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.