European Stars And Stripes (Newspaper) - April 9, 1989, Darmstadt, Hesse                                Page 4. The stars and stripes sunday april 9,1989 of staff warnings on pricing ignored Asemos ate Lockheed horror stones by of news mice Dayton Ohio after her visit 10 a Lockheed corp aircraft plan in Marietta a last june air Force cant. Kill by Johnson reported finding one Hor ror Story Afler another. The stories lurked in sky High prices proposed by Lockheed for pans going into 147 crash repair kits Tor the air Force s c-5 cargo planes prices like j114 for a business card size Menai plate and s362 for a splicer she described As a Small angled piece of Metal. Her report and of her internal air Force documents obtained by the Dayton daily news show How air Force analysts and officials objected to nearly every aspect of the repair Kil orders. They also portray an air Force procurement process that grinds on regardless of warnings about wasted taxpayer dollars. Johnson a Cost Price analyst urged a part by part review of the orders. But what she stressed was t the dollars being wasted it was the Prospect of Public exposure. Just a cursory review of the proposals con Vinced me the potential is High for negative publicity she  m Thorson an assistant Secretary or the air Force echoed her publicity fears b month later alter. Hearing that a limited review had found 39 percent of inc parts overpriced. In an internal memo he warned that thousands of parts could be potential toilet pans for or rep John Dingell a Mich to hold up in a hearing. Their words proved  As he had used s642 fibreglass toilet pans to Sam Bulicz wasteful spending in the c-5 program in the mid-1 n8qs, Dingell exhibited pricey repair kit. Parts like smoking gun evidence at a March 22 hearing of the House oversight subcommittee which he chairs the air Force faces additional questions Over its buy Ina practices for spare pans on monday when sen. John Glenn a Ohio. Is scheduled to chair a governmental affairs com Millic hearing that will Lake testimony from air Force and defense department officials. _ although not focusing1 on the c-5 or repair kits Glenn charged on Friday that wasteful spending has resulted in the warehousing of defective spare parts for everything from aircraft machine guns to components fur fighter  ,. V. In internal memos and reports thai became Avail Able As a result of Dingell s hearing. Air Force officials questioned the need for inc crash repair Kils. The myth. Of of ordering them and inc decision 10 buy them trom Lockheed a huge company which has to add Treen. Dons overhead costs to otherwise inexpensive parts. One memo described a snot Check that fount eight out of 18 parts overpriced. For example one j2 Shim. A Small wedge shaped piece of Rnell was priced a. $40. And an $11.hi Brace was priced at $194.97 the parts were leftovers but Lockheed had priced them As if in would have to make them anew. The memo under cd How Many More of the kits More than 6,000 different types of parts might be overpriced. _ Price analyst Johnson stopped just Short of recommending the orders be cancelled. Termination makes sense til would be costly she reported to her Bosses in the air Force systems come s contract management division. The comptroller of the air Force it. Gen. Claudius a Watts in suggested in a july 1988 memo to general Larry , air Force chief of staff that Theair fort consider Astop work order while it examined the Deal his memo cited numerous irregularities called the orders a questionable acquisition and noted that one administrative office involved in c-5 purchases had tried to divorce itself from the affair. Yet the documents show no indication that the air Force Ever put any brakes on the Deal. As of March 20, the air Force had accepted 47 Kiis and doled out 126.7million, according to a contract manager. The unpriced order As the air Force Calls it included a not to exc cd Cap of s68.6 million which allowed the air Force to make Progress payments As Lockheed delivered kits. At the hearing Dingell made a harsh assessment this order he said involves virtually every sorry facet of Defenso contracting.". ,. Dingell s charges Drew an indignant response from the air Force logistics come s Headquarters at Wright Patterson and near Dayton Ohio the com Mand is buying the kits through its san Antonio air logistics Center in Texas. We have never agreed on those prices said col Allan v. Cur mings a logistics come spokesman the air Force should not be chastised for paying prices that we be not finally agreed  \ that the air Force has t settled on final prices was no Comfort to air Force comptroller Walls who found Money and kits changing hands while neither contractor nor buyer could say exactly what the kits contained this order involves v virtually evry sorry facet i of d0fense. Co  or consequently what they would ultimately Cost. Watts warned that the air Force could end up pay ing prices based on do Facto costs if Lockheed finished producing the kits before inc air Force finished iils analysis of Lockheed s prices. At the hearing Mai. Gen. Richard d. Smith the command s Deputy chief of staff for Materiel Mana a Rnell at Wright Patterson testified that two a a crashes in i983 and a a sawing fire in i9s5 formed the air Force s basis for deciding what parts of the air plane to buy repair kits for. V. During the service life of the c-5, there have been a local of seven major accidents sustained by the a Model aircraft he testified. Besides the three dam " aged planes four c-5s were lost. Why Smith Only discussed a Model accidents in t Clear since the repair Kils Are Mccanl for both the c-5a and cab models and were ordered under inc air Force s procurement contract for the Cash. Bui it let him avoid mentioning inc most recent serious co Accident a dec. 30 fire that left a 13-by-33-foot Hole in inc upper fuselage of a c-5b at Travis fab near Sacramento Calif. This damage can t be fined with the Billy and wig repair Kils. The c-5b Accident surfaced in testimony at the Dingell hearing by the general accounting office the investigative Arm of Congress. The Gao cited the damage to support its Contention thai three accidents Don l offer enough data on which to base valid predictions about future is acid cols. Dingell said inc Acci Dent showed the air Force had guessed wrong. We really got a bum rap on that one cum wigs said the next  some air Force officials were equally unimpressed with the Way the kits were defined. The at Force has been supporting the c-5 aircraft for Over 20 years and the requirements arc apparently not based on historical experience Walls wrote in h is memo to Welch. Watts also said the air Force systems come s administrative contract Oitice at the Marietta Plautt had complained that the command s buyers had created a situation where there was no possibility to conform to guidelines for setting prices on the  also questioned the need for inc Kils in Nis september 1988 memo to Dan Rak air Force Deputy assistant Secretary for acquisition. Air fore depot maintenance teams he said have a demonstrated capability to make any possible re pairs. Even if the production line were shut  buying the kits while Lockheed was still producing the cab was the economic key to the orders air Force officials said. 11 avoided the Cost of setting up tooting again for limited production. ,. It was our consensus that lying to this existing production program was an Opportunity to assure availability of crash repair parts at a reasonable Price Smith testified the last c-5b is scheduled for delivery Chism Dalh. V. ,. But others wonder whether the orders my in time to Lake advantage of a humming production line especially since parts production is often finished Long be fore the last plane Rolls out Olne Assembly building. In his memo to Rak Thorson doubted that the or dvrs had been made in time to save on tooling setup costs. If in fact setup Lime is included in parts prices there is no Benefit from the ongoing c-5b pro. Gram he wrote. " /.-. Noting that the first site men of work for the kits was written in 1984, Thorson also questioned Why the san Antonio Center did t have ample time to gel Lockheed s proposals and negotiate prices. N. The orders were placed in december 1986 and february 1987, still with no clearly specified parti and prices. Lockheed defined the specific contents for the kits and began submitting proposals 18 months later. In some cases where excess parts were available the spot checks showed Lockheed was trying to charge the air Force As if they were new. And even where lock heed s prices were fair and reasonable Johnson re ported these prices were in Many cases exorbitant because we Are buying from Lockheed items thai might be made cheaper elsewhere there s one More fact congressional staff members cite the air Force does t usually buy crash damage Sci said one committee staff aide who asked not to be identified by name it s the same reason you dont keep a spare roof for your House in your garage. Thu buy insurance. If Lucy had All that Money they spent on these Kils in a savings account somewhere. They could fix the fire damaged c-5b Wilh itch i Ernst from one year. It just does t make sense. Bestsellers fiction c verses by Salmin Rui Ndu la Mali Weidig on til Yaj a Piaf or for Owen weak by John nog till a. 3. I Mil on the Edge to 0k a Lull lilt we Tat 7 a Bill oat Hoate by e l  my s. We on 111 6 6-tme Long dark Tea time of the soul by douse aflame at la &. 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