A Boeing Co. contract the Pentagon threatened to scale back last year is back on track but could face budget cuts.
The contract for the joint tactical radio system,a multimillion-dollar effort to unify military communications that’s being led by Boeing’s Anaheim unit,has been reworked and is awaiting final approval, Pentagon spokesman Steven Davis said.
The revised contract, which would bring more oversight of Boeing, received positive reviews from Pentagon officials at a November meeting, Davis said.
Davis wouldn’t comment on Boeing’s role in the reworked contract, which covers what’s called the “cluster 1” piece of the program for vehicles and helicopters.
Boeing is expected to still head up the contract, said Brad Curran, an analyst with Frost & Sullivan Inc. in San Antonio, Texas.
Ralph Moslener, Boeing’s program manager for the joint tactical radio system cluster 1 program, said he has received “no indication” that Boeing would lose its position as project leader.
The program aims to replace various military communication devices with a modern network of radios that can talk to each other. The radios eventually would replace 200 different ones and be capable of sending maps and other data.
Word of the program getting back on track is good news for Boeing. Last year, the company got a “show cause” letter from the Pentagon questioning the company’s work. The letter raised questions about delivery schedules and costs.
The issue now for Boeing could be budget cuts of around 15% for the program, analyst Curran said.
There’s little doubt the radios are needed. Older devices aren’t holding up well in Iraq and Afghanistan. So the Pentagon has been buying radios with some of the capabilities the Boeing radios have.
The military likely will continue asking for replacement radios. And that push will take away money from the next-generation radios, according to Curran.
The contract, awarded to Boeing in 2002, is ambitious. Problems arose early last year after Boeing said it would need more time.
“There are a lot of moving parts,” Boeing’s Moslener said. “It’s a very complex situation.”
In February, the Pentagon reworked oversight of the radio program. Then in the spring came the dreaded “show cause” letter,essentially a threat to yank the rest of the contract from Boeing.
Concerns included time delays, security issues and how well the radios could communicate with each other and older models. Another worry was over how far the radios could reach.
Problems are common in a program this massive, Moslener said.
“It’s a tremendous integration project,” he said. “We kept our heads down and tried to focus on what was important.”
Boeing responded with a “go-forward plan” addressing the Pentagon’s concerns. The military and Boeing hammered out a plan to get more checks and quality assurance.
The newly reworked contract is in the approval process. A decision could come within a few weeks.
