Lockheed will not get VH-71 bonus

[Bronx]

News report:
Navy: Lockheed will not get helicopter bonus
Bonus was company's only profit in presidential project

Lockheed Martin Corp. will not receive a bonus for the first phase of its development of the VH-71 presidential helicopter.

In essence, that means Lockheed will build the helicopters at cost; the bonus is the company's only profit.

The Navy said Lockheed missed key milestones in the projects. Its Systems Integration plant in Owego is the prime contractor and systems integrator for the presidential helicopter replacement program.

The company has not returned requests for comment."

[SASless]

Surprise....Surprise!:rolleyes:

But knowing how defense contractors arrive at "costs" will put plenty of money in the till beyond what they expend in the construction of the aircraft.:mad:

[rjsquirrel]

Word on the street is that this is the first shellacking the Navy will give out, and not the last. Not only are costs exploding, but technical merit is evaporating and schedule is sliding. The triple whammy is now being discussed as grounds to cancel. The original contract award was part of the thanks to Blair and Berlusconi for the Iraq war, and now that neither is in power and the Bush team has literally no political power, the Navy is watching the Lockheed team very carefully. Any more foul-ups, and they will build a case to dump the program and either re-compete or just pick another.

The Lockheed littoral ship contract has Congress up in arms, as a perfect showcase of what could happen.

You can believe that Lockheed is making no money, this program was awarded based on "award fee" as the only way to make profit, where 10% of the program money is available if the contractor makes the cost and schedule milestones, and 0% if they do not. 0% means that they contractor is paid for the worker's time, at overhead rates, so they don't lose money, but they don't make any profit. No profit means they might as well be a charity, and shareholders take a dim view of that!

[NickLappos]

squirrel:

Cancellation is a big word, I would bet the Navy is a long way from that step (but it is not inconceivable!)

[Dan Reno]

Hell, the Navy did nothing about the V-22 and that program has been a loser both in technology, money and promises made now for over TWO DECADES. This is just typical government double-speak so as to show the contractors and citizens that they are trying to keep a handle on spending. Yeah, right.

[OFBSLF]

Hell, the Navy did nothing about the V-22 and that program has been a loser both in technology, money and promises made now for over TWO DECADES.The V-22 had the Marine Corps pushing for it and they have huge pull in Congress. I doubt the VH-71 has that kind of political muscle behind it.