WASHINGTON Jan 3 Alenia Aermacchi, a unit of
Italy's Finmeccanica SpA, said it is evaluating its
options after the U.S. Air Force notified it late last month
that it planned to halt a contract with the company to supply 20
G222 cargo planes to Afghanistan.
The U.S. decision to halt the program, that has already cost
$590 million, is the latest setback for the Pentagon's efforts
to equip the Afghan military as U.S.-led forces prepare to
withdraw from the country after more than a decade of war.
Alenia plans to meet with the parties to discuss the status
of the program and the investment and progress made to date, a
company spokesman said on Thursday, describing the twin-engine
G222, an earlier model of Alenia's C-27J cargo plane, as "one of
the safest, most durable cargo aircraft in history."
Alenia defended its work on the program, saying it had
completed work on all 20 refurbished planes ordered by the Air
Force under the contract, with 16 delivered to Afghanistan and
four others waiting for transport in Italy.
Ed Gulick, a spokesman for the U.S. Air Force, said the
service decided not to renew the contract when it expires in
March 2013 after years of problems with Alenia's work on the
contract. He said discussions were still under way about what to
do with the planes that had already been delivered.
He said the program had been plagued with problems, and
Alenia had struggled to maintain a sufficient number of planes
that were ready for use. "The program just never got to the
point where it was doing well," Gulick said.
A source familiar with the program acknowledged the
program's rocky start, but said Alenia had been meeting its
targets for delivering mission-ready planes for some time. The
company also invested over $25 million of its own funds to keep
the program on track while officials finalized a supplemental
contract for spare parts last year, the source said.
An additional problem was that the hastily drawn up initial
contract included too little funding for spare parts, which
exacerbated maintenance problems that left the fleet grounded
for several months in 2012, the source said.
The Air Force has spent $590 million on the contract
already, with just $60 million more slated over the final option
period, which would have run through March 2014, said the
source, who was not authorized to speak publicly.
The cost of halting the program could well exceed the amount
that was still to be spent over the coming year on parts and
supplies, and training for pilots to fly the small cargo planes.
The Stars and Stripes newspaper quoted a spokesman for the
Afghan defense ministry as saying that Washington now planned to
deliver 4 C-130 Lockheed Martin transport planes to
Afghanistan instead of the G222s.
Gulick could not confirm the report about the C-130s.
The Air Force's move on the G222 program, reported by the
Wall Street Journal last week, follows an embarrassing setback
on a separate Air Force effort to provide light support planes
The Air Force was forced to redo that competition after
discovering problems with its documentation of a $355 million
contract awarded in December 2011 to privately held Sierra
Nevada Corp and Brazil's Embraer.
The Air Force abruptly canceled the deal in February last
year and launched a fresh competition after it discovered
paperwork errors while preparing for a protest filed by the
losing bidder, Hawker Beechcraft. A new contract is
expected this month.
The delay means that the first light support planes will not
be delivered to Afghanistan before most foreign combat troops
leave the country by the end of 2014.