Cancellation Costs for President's Copter Likely to SoarMay 26, 2009
 Canceling the presidential helicopter program is going to cost taxpayers a hefty sum. The U.S. Navy expects to pay about $555 million in cancellation costs to Lockheed Martin for its VH-71 presidential helicopter. But that's just a drop in the bucket compared to the $4.4 billion it estimates as the cost of extending the life of the existing VH-3 and VH-60 helicopter fleet, according to a document obtained by Reuters. The Navy's assessment was presented at a hearing of the Seapower and Expeditionary Forces subcommittee, a part of the House Armed Services Committee. This is just one of many programs to be cut and the costs are expected to pile up because of termination fees, Politico reported. The Pentagon has not yet begun negotiations with Lockheed and its partners to determine the termination fee. Analysts interviewed by Reuters said that they expect Lockheed to seek a much larger amount than the $555 million estimated by the Navy. Some analysts think the number could be closer to $1 billion. Lockheed has offered to build an additional 14 new helicopters for about the same $6.8 billion price tag of the initial program. A bipartisan group of House lawmakers endorsed the idea, but Defense Secretary Robert Gates rejected it. A House subcommittee said the proposed helicopters did not meet the White House and Navy requirements. In late May, Aston Carter, the Pentagon's new chief weapons buyer, officially canceled the program and told the Navy to submit options by June 15 to replace the current fleet. Lockheed recently announced that it was laying off 130 workers at its Owego, NY, plant, citing the contract termination. (U.S. Marines photo by Sgt. Donald Bohanner (released)) |
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