Army Assesses Boeing's Wide Power

Report Spotlights Risks Of Conflicts Raised by Role In Ambitious Defense Job

The Wall Street Journal 10/25/04
author: Jonathan Karp
author: Andy Pasztor
(Copyright (c) 2004, Dow Jones & Company, Inc.)

WASHINGTON -- Mired in scandal over tainted Air Force contracts, Boeing Co. faces mounting Pentagon and congressional scrutiny of its work running a $100 billion modernization program for the Army, with a new report highlighting the risk of conflicts raised by the company's wide-ranging role.

The Future Combat System, or FCS, is the centerpiece of the Pentagon's drive to create nimbler and more-lethal ground forces to handle everything from conventional warfare to the type of guerrilla insurgency shaking Iraq. The program envisions an array of swift manned and robotic vehicles, pinpoint-accurate cannons able to hit targets over the horizon, unmanned spy planes and even advanced satellites.

The ambitious scope of FCS is matched by the unprecedented authority granted to Boeing, the project's main contractor. With technology growing increasingly complex and the Pentagon short of experts capable of overseeing sprawling programs, the Army has effectively outsourced many management functions to Boeing. Under a novel arrangement the Pentagon hopes to use more to acquire its biggest weapons systems, the Chicago aerospace giant is supposed to shed its typical supplier role. Instead, it acts as an "honest broker," says Dennis Muilenberg, Boeing's top FCS executive, helping decide not only what the Army buys but then choosing subcontractors and riding herd on them until the work is finished.

But a recently completed study commissioned by the Army highlights the risks of giving a single contractor -- particularly one embroiled in recent ethical lapses -- such wide latitude. The report by the Institute for Defense Analyses, a Pentagon-supported research group, warns that the "Army should adopt a policy of 'Trust but Verify' with regard to the ethics programs of the FCS industry participants."