Two Aviation Contracts Face Scrutiny and Possible Cancellation

(MoneyWatch)  Two of the premier current aviation contracts are facing intense scrutiny and possible cancellation and rebid. In the United States the new Presidential transport helicopter, the VH-71, costs have increased dramatically and there is discussion of ending the program and putting it out for bid again. Sikorsky supporters in Connecticut definitely support that idea. The VH-71 is a joint venture between Lockheed Martin and the Italian company Augusta Westland. The EADS manufactured A400M medium transport is also facing problems due to development issues that have delayed testing and delivery by at least two years. Reuters writes that Germany could be the first country to cancel their orders. The buyers have until March 31st to decide that due to a contract provision based on the date of the first flight. This was originally scheduled for January but has yet to occur yet, and may not until 2010. EADS itself had discussed starting the program over as a way to cut losses and move on. Ending these two programs would have wasted several years and millions of dollars of initial spending and also be big blows to the contractors involved, but that has happened before with defense contracts. Most recently the U.S. Army had to do that with the ARH program.