March 1, 2006

Army Defends $125 Bln Communications Program

By Andrea Shalal-Esa

WASHINGTON -- U.S. Army officials on Wednesday said a $125 billion communications modernization program is on track for a key Pentagon review in May, despite delays in two other programs that are needed to run its extensive communications networks.

The Future Combat Systems program (FCS), with Boeing Co. as prime contractor, will use advanced communications to give troops more information by linking 18 light, fast, manned and robotic air and ground vehicles. It will be rolled out over two decades,

Army acquisition chief Claude Bolton told a Senate Armed Services Committee subcommittee that 2006 is a "critical execution year" for the program. It faces more than 52 reviews, key hardware and software deliveries, and several field experiments this year, he said.

Bolton said the FCS had long acknowledged integration challenges with two communications programs -- the Joint Tactical Radio System (JTRS) and WIN-T. Both are critical to the success of FCS but have run into technological issues that forced restructuring moves.

Boeing is the prime contractor for FCS, along with employee-owned Science Applications International Corp. Chicago-based Boeing is also prime contractor for the first segment of the JTRS program, while General Dynamics Corp. and Boeing are working together on the WIN-T contract.

The FCS was working closely with the JTRS and WIN-T restructuring efforts and developed risk mitigation plans that included alternative approaches, Bolton said.

"The Army is focusing hard to get it right on developing a common and integrated battle command network," he told the subcommittee, noting seven radios had been delivered by the JTRS program for FCS integration use and experimentation.

A recent report by the Government Accountability Office said the Pentagon paid billions of dollars in award fees regardless of the acquisition outcomes, but Bolton said the FCS fee structure was different. Unlike other contracts of this size, it had measurable performance goals, he said.

Bolton also said the Army was on track to finalize by the end of March a reworked defense contract with Boeing and SAIC that transformed it from an "Other Transaction Authority" deal, which exempted it from some cost and auditing requirements.

The Army agreed to change the terms of its FCS contract with Boeing and SAIC after Republican Sen. John McCain of Arizona raised questions about the Army's ability to properly oversee work on the huge program without the auditing requirements that are mandatory in defense contracts.

Bolton also defended the Army's decision to hand over managerial control to Boeing and SAIC, saying the alternative of having the government control 19 separate contracts could hurt the overall integration of the project.

Congressional investigators have raised concerns about the rapid pace of the program, cautioning that its success depends on complex software integration work that is far from done.