War rages over pact for fighter despite new political accord.

War rages over pact for fighter despite new political accord

The competition between Calabasas-based Lockheed Corp. and Century City-based Northrop Corp. for award of the Advanced Tactical Fighter contract is one for the books.

The Air Force has stretched out the competitive demonstration/validation phase by about half a year and asked each of the two companies to bear as much as $50 million of the resulting extra expense. Meanwhile, Pentagon planners and Congress are considering killing the giant program because of budget constraints and the stunningly changed political conditions in the nations of the Soviet-led Warsaw Pact.

"It's an `Alice in Wonderland' kind of poker game that requires the players to keep upping their antes, but the house may never award the jackpot," remarked a local analyst of the ATF contract competition.

But what a jackpot. The Air Force wants to buy 750 of the next-generation fighter aircraft at an estimated cost of $67 billion to replace the current F-15 Eagle air superiority fighter made by McDonnell Douglas.

Moreover, the Navy is considering purchase of another 600 as carrier-borne variants of the ATF to replace the F-14 Tomcat fighter made by Grumman.

Both the potential jackpot and the stakes are so high that five of the six airframe companies, which originally were vying for the ATF contract, joined as teams. Boeing and General Dynamics teamed with Lockheed; McDonnell Douglas teamed with Northrop; and Rockwell International remained single.

When the Air Force in October 1986 tapped Lockheed and Northrop to be the two final competitors, they became the leaders of their respective teams, and Rockwell was out in the cold. The Air Force awarded each of the winning two a fixed-price predevelopment contract worth $691 million, and the Navy coughed up an additional $50 million for engineering on a Navy variant.

But even that lofty total has covered only a portion of the massive costs. For each team already has anted up an estimated $500 million to $650 million of its own money to design, build and test two prototype aircraft in a winner-take-all, fly-off competition - if, of course, there is a winner.

"Cost sharing is the name of the game for this program," a Lockheed manager observed.

The Air Force was expected to make its decision about the winner by year's end, but the winner now is scheduled to be named in April 1991, and the demonstration phase has been extended through June 1991. The service now is expected to issue a final draft request for proposals in mid-April, actually issue the RFP for full-scale development in November and require proposals be received by Dec. 31, 1990, rather than July 31.

Analysts cited two reasons for the stretched schedule: budgetary reasons, for Congress cut $200 million from the Air Force's fiscal '90 budget for the ATF, and to help Lockheed, whose team reportedly was lagging behind schedule.

The Air Force hopes to get Congress to restore the $200 million to the ATF by agreeing to trim a comparable total from other programs in a Washington gambit called "reprogramming."

In stretching its demonstration/validation schedule, the service agreed to give each of the two ATF teams an additional $52 million even though they believe the stretchout will cost each about $100 million to sustain the extra effort. (The Navy is to contribute another $15 million to each team for the stretchout.)

The team members are expected by the Air Force to make up the difference, which would be on top of the half-billion or so each team already has anted into the pot, to stay in the game.

Lockheed, arguably a beneficiary of the stretchout, reluctantly has agreed to this negotiated arrangement, analysts said. But Kent Kresa, Northtrop's president and new chief executive officer, reportedly was in Washington this month seeking to negotiate another deal after negotiations since December at Wright-Patterson Air Force Base, Ohio, failed.

Northrop has emphasized it worked hard to comply with the Air Force's original schedule for first flight of the YF-23A and now is being penalized.

Meanwhile, a Lockheed spokesman said his company will announce in the "very near term" when the "roll-out" and the subsequent first flight of the YF-22A will occur. Its mid-section, built in Ft. Worth by General Dynamics, and the aft fuselage and wings, built by Boeing, were to be delivered this month to Palmdale where Lockheed was to mate them with its forward part of the fuselage.

General Electric Co. and United Technologies Corp.'s Pratt & Whitney division are vying for the ATF's engine production contract. Each company is to supply one engine to each airframe team in the fly-off competition that will permit the Air Force to select the best combination of airframe and engine.