Newspaper article St Louis Post-Dispatch (MO)

Mac Says Critics Won't Kill C-17

Newspaper article St Louis Post-Dispatch (MO)

Mac Says Critics Won't Kill C-17

Article excerpt

McDonnell Douglas Corp.'s C-17 transport jets have come under more fire at home than they did during their recently completed service in Bosnia.

The company found itself under attack again last week because of disclosures that it charged the Air Force sky-high prices for some C-17 parts that could have been made far more cheaply by subcontractors.

But McDonnell says the pricing flap already has been resolved and should cause little trouble with Congress, which will vote later this year on the Defense Department's plan to buy 80 additional C-17s for $16.6 billion.

"We believe that in the past two years the C-17 has become a model program," said Jim Ramsey, a spokesman at the company's assembly operation in Long Beach, Calif.

Even critics acknowledge that the disclosures, made in a preliminary draft of a General Accounting Office audit, are unlikely to diminish support for the program.

"It seems like members of Congress are happy to spend money on the military," said Daniel Sagalyn, who tracks the C-17 program for the Center for Defense Information in Washington, D.C.

McDonnell thinks the damage from the news stories on the C-17 parts will be limited because the price discrepancies date back more than four years and involve a relatively small number of spare parts for a few early aircraft.

Newsday, a paper in New York, reported Wednesday that McDonnell got $12,280 for spare-door hooks it had originally contracted to buy for $389.

Newsday also said McDonnell got $2,187 each for spare-door hinges it had agreed to buy for $31 elsewhere.

Newsday attributed the information to the General Accounting Office, the investigative arm of Congress.

The agency declined to provide a preliminary version of its study last week, saying that only final versions are available to the public. But copies have been circulating for several months within McDonnell, the Air Force and the Pentagon.

Although McDonnell quietly paid $187,000 to the Air Force to settle the question of overcharges, it maintained last week that the price differences are exaggerated in the draft version of the GAO study.

"They failed to count the start-up costs paid to the subcontractors, but they counted them for the parts McDonnell made," Ramsey said. …

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