US May Buy 26 More C-130Js in FY 2007-2008
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Bloomberg reports that Lockheed Martin Corp. may receive $1.15 billion for 26 C-130J Hercules transport aircraft over the next two years under a December 14, 2005 memo approved by Deputy Defense Secretary Gordon England. The memo includes the plane purchase proposal in the Pentagon’s 2007-2011 budget plan, and proposes to authorize 13 Hercules transports in each of FY 2007 ($430 million) and FY 2008 ($718 million) – 18 USAF C-130J transports and 8 US Marine Corps KC-130J aerial refueling tankers. The USMC prefers Hercules aircraft for this role because they can fly slowly enough to refuel helicopters as well, and 6 USMC KC-130Js are currently flying missions in Iraq. According to the Bloomberg report…
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Lockheed’s Deputy Program Manager Greg Ulmer said on November 28, 2005 that the company is in preliminary discussion with the USAF for an additional five-year C-130J contract, and the Teal Group’s Richard Aboulafia notes that the US had the option to stretch the purchases out through 2011. Aboulafia sees its proposal as “a strong endorsement of the program… that tells prospective foreign customers this program will be around.”
On the other hand, Gordon England’s memo could also reflect the desire to lower the cost per plane by scaling up production instead of producing weapons systems in very small lots. While the “small lot” approach sustains the industrial base, it has been criticized as a contributor to the USA’s defense procurement cost spiral. When one compares this memo’s cost per plane ($1.148 Bn/26 = $44.2 million) with the oft-quoted cost of $66 million per C-130J, clustering the order over just two fiscal years may have had some effect.
In a conversation with DID, The Teal Group’s Richard Aboulafia said it was both:
“C-130 acceleration will certainly save cash, but they apparently aren’t just burning through the [multi-year procurement]. Rather, they are planning to follow it with another [multi-year procurement]. So both goals – accelerated procurement and unit cost reduction – are served.”
The White House Office of Management and Budget must approve the new request before President George W. Bush submits it to Congress in February 2006, and Lockheed has not yet been formally notified of any changes to the C-130J program.
The Bloomberg report notes that through November 28, 2005, Lockheed had delivered 135 C-130J variants to U.S. and foreign customers, with a backlog of 45 orders and 15 aircraft delivered in 2005.
UPDATE: Oct 16/06: USAF Air Mobility Command declares that the C-130J has reached Initial Operating Capability, and notes readiness rates from initial combat deployments.
