Boeing: We Screwed Up, Give us $500 Mil

"When a child who is on trial for murdering his parents pleads for leniency on grounds that he is an orphan, we call that chutzpah," says Space News' Washington Aerospace Briefing. "When a U.S. defense contractor botches a program demands a huge termination fee when the contract is cancelled, we call that... standard operating procedure."

So no, we weren't completely shocked to hear that Boeing is seeking about $500 million from the National Reconnaissance Office in termination fees associated with the Future Imagery Architecture spy satellite program. The NRO cancelled the optical portion of Boeing's multi-billion dollar FIA contract last year after becoming fed up with the company's technical struggles and that lead to innumerable delays and soaring costs.

FIA was supposed to be “a constellation of satellites that would gather clearer and more-frequent images -- even at night and when there is a cloud cover -- of enemy military activity than current satellites can,” the Los Angeles Times notes. Originally scheduled to launch in 2005, at one point, FIA looked like it might become the “most expensive program in the history of the intelligence community,” according to Globalsecurity.org.

When Boeing won the FIA contract, back in 1999, it was something of a coup. As the Times observes, “Much of Boeing's space expertise was in making rockets to launch satellites and developing commercial telecommunication satellites. It had little experience manufacturing satellites with optical lenses that can take close-up pictures from space of objects on the ground.” That was Lockheed Martin’s area of expertise. “Boeing bid very aggressively even though it didn't understand the technology as well as Lockheed," the ubiquitous Loren Thompson told the LAT.

So it’s no surprise that Boeing started burning through cash and dropping deadlinesa, once FIA got underway. “As early as 2002, the government had to reprogramming of about $625 million [and possibly as much as $900 million] from other intelligence programs… to get the program back on schedule,” Globalsecurity.org says. “By the end of 2004 the House Intelligence Committee remained concerned about the viability and effectiveness of a future overhead architecture, given the apparent lack of a comprehensive architectural plan for the overhead system of systems, specifically in the area of imagery.”

By 2005 – after $10 billion on FIA, including about $4 or $5 billion in cost overruns – the government finally had enough, taking the project away from Boeing, and giving it to Lockheed.

Boeing's request for a half a B to make up for the lost work is big. But it's not totally unprecedented, Washington Aerospace Briefing says. The company is still arguing with the Pentagon over $2.3 billion for the A-12 stealth carrier aircraft program, cancelled in 1991.

(Big ups: AT, JS)

UPDATE 2:28 PM: AT points out that there were some interesting names associated with Boeing's controversial FIA win. In Boeing's '99 press release, we read:

Ed Nowinski, Boeing FIA Program Manager, stated, 'This was a very hard-fought competition and the win is the result of the total commitment of our team.'

Who is Ed Nowinski? Check out this press release, from 1996:

MELBOURNE, Florida, August 5, 1996—Harris Corporation has named Ed Nowinski as vice president of Strategic Planning and Business Development for the company's Electronic Systems Sector.

Mr. Nowinski most recently was the director of imagery intelligence for the U.S. government's National Reconnaissance Office (NRO) and director of development and engineering for the Central Intelligence Agency.

Mr. Nowinski joined the CIA in 1967 and rose rapidly to positions of increasing responsibility during his career with the CIA and NRO, including director of the Data Communications Group, deputy director of development and engineering, and director of systems engineering. During his government career, he was instrumental in establishing several of the country's premier intelligence collection systems.

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