U.S. Army To Lockheed: Stop Working On ACS

By GOPAL RATNAM

The U.S. Army asked Lockheed Martin to stop work on the $879 million Aerial Common Sensor program contract for a new spy plane after a review found that continuing the current effort would delay the program by two years and lead to additional costs.

In a Sept. 14 statement, the Army's Communications-Electronics Command
(CECOM), Fort Monmouth, N.J., said Lockheed had 60 days to resolve problems
that company officials found in June.

"Although we're issuing a stop work order, it is important to note that we're not terminating the contract at this time," said Edward Bair, the Army's program executive officer for Intelligence, Electronic Warfare and Sensors at CECOM.

The Army's review found "has determined the weight of the ACS payload and
required airframe modifications exceed the structural limits of Lockheed Martin's selected aircraft," Bair said.

The stop-work order is far less drastic than an outright contract cancellation that many analysts and observers had expected and allows Lockheed Martin more time to convince the Army that it can still salvage the program.

At an investors conference in Phoenix, Ariz., Sept. 14, organized by investment banking firm Morgan Stanley, Robert Stevens, Lockheed's CEO, said he was "accountable" for the company not getting its proposal right.

"We didn't deliver efficiently, effectively and well for our customer a complete and durable Aerial Common Sensor system solution," Stevens said, according to a transcript posted by the investment firm. "In this case, we did not do a sufficiently good job."

Lockheed proposed fitting its electronics and sensors onboard an Embraer ERJ-145 airplane.

Bair said the review found that "an alternate aircraft to the Embraer 145 will be necessary to achieve mission capability."

The Aerial Common Sensor program is intended to replace three current systems: the Army's Guardrail Common Sensor and Airborne Reconnaissance Low and the Navy's EP-3E Aries II with a common system to be developed through an Army-Navy partnership. The Navy, however, is yet to sign on to the program that could ultimately cost about $7 billion.

The Army's review and its decision to stop work follows Lockheed's discovery — one year after it won the contract — that it had underestimated the weight of wires and equipment used to install electronics on board the airplane