House panel votes to trim Army modernization plan

By Jim Wolf

WASHINGTON, May 9 (Reuters) - The U.S. House of Representatives Armed Services Committee voted Wednesday to cut $867 million (424 million pounds) -- one-quarter of President George W. Bush's request -- from the Army's top modernization project in a setback for program co-managers Boeing and Science Applications International.

The goal was to scrap redundant components and cut program management costs, said Rep. Neil Abercrombie, the Hawaii Democrat who chairs the Air-Land subcommittee that recommended trimming the project.

The committee action would leave $2.8 billion in the fiscal 2008 budget to support what Abercrombie called the Future Combat Systems "core programs."

The matter still must be dealt with in the Senate and full House.

The panel recommended cutting all of the about $470 million in fiscal 2008 procurement funds sought by President Bush for the so-called Armed Reconnaissance Helicopter being built by Textron's Bell Helicopter unit.

It called on the Defense Department to hold another competition to offer the required capabilities.

In March, the Army sent Bell Helicopter a "show cause" letter asking why the program should not be terminated. The first production option was to have been exercised last December. No operational aircraft have been produced. The aircraft's projected cost has doubled from $5.2 million to more than $10 million per aircraft.

The panel recommended adding $2.4 billion to the 2008 budget to buy 10 Boeing C-17 cargo aircraft; the White House had sought to end production of the C-17 in 2008.