March 5, 2008 / 12:23 AM / in 11 years

Pentagon says does not need more Boeing C-17s

WASHINGTON (Reuters) - The U.S. military does not need additional C-17 transport planes built by Boeing Co (BA.N) beyond the 189 it has already has on order, despite an Air Force “dream list” asking Congress to fund 15 more, the Pentagon’s chief weapons buyer John Young said on Tuesday.

“We have no requirements base for more aircraft,” Young told reporters, noting that for the past two years the Pentagon’s budget request had not included funding for additional C-17 airplanes.

He said the decisions underlying those budget requests were “well-founded” and no conflicting information surfaced during a recent review of a separate Lockheed Martin Corp (LMT.N) program to put new engines on even larger C-5 cargo planes.

In a letter explaining his decision to continue putting new engines on some of the C-5s that went to Congress in February, Young said he had rejected several options for buying C-17s to replace C-5s as too expensive.

He also cited a U.S. Transportation Command requirement of 205 C-17s, which raised some eyebrows on Capitol Hill since that appeared to go beyond the fiscal 2009 budget request.

On Tuesday, Young said he had tried to “acknowledge” the requirement of U.S. Transportation Command Commander Gen. Norton Schwartz in his letter to Congress, but that was not a “codified” or documented Pentagon requirement.

“If I don’t get 205, Gen. Schwartz might not have the tails (planes) he needs, but we can meet the only stated requirement that’s out there,” Young said.

He said the military could meet a documented Pentagon requirement of cargo capacity with the planes it had, plus its fleet of giant Lockheed Martin Corp (LMT.N) C-5 transport planes, some of which are being upgraded to get new engines.

Congress has added 18 C-17s to the defense budget over the past two years to keep the Boeing C-17 production line rolling and safeguard jobs, despite a Pentagon decision to cap production of the popular transport plane.

Given those moves — and signaling that it expected similar congressional action in fiscal 2009 — the Pentagon said it did not include any funding to close the production line in its fiscal 2009 budget request.

The Pentagon included no funding for the plane in the Air Force part of its budget request, but key lawmakers such as Rep. John Murtha, a Pennsylvania Democrat and chairman of the House Appropriations Committee defense subcommittee, have already vowed to add more C-17s to the war budget for 2008.

Then, last month, the U.S. Air Force sent lawmakers an $18.7 billion “unfunded priorities” list that included buying 15 Boeing C-17 transport planes.

Young said he had discussed the C-17 issue with the Air Force, but said the Air Force Chief of Staff generated the unfunded priorities list without his advice. “They don’t really ask our input for their dream list,” he said.

Some key senators including Sen. John McCain of Arizona, the leading Republican presidential candidate, have already signaled their opposition to C-17 “plus ups”

Lt. Gen. Donald Hoffman, the top uniformed officer for Air Force acquisitions, told reporters last month that the request reflected the number of planes that Boeing needed to build to reach efficient manufacturing rates.

Meanwhile, the Pentagon’s inspector general’s office continues to examine whether the Air Force wrongfully encouraged Boeing to spend hundreds of millions of its own dollars to maintain suppliers for C-17 production in recent years in anticipation of congressional funding boosts.

It launched the review at McCain’s request.

Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn

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