Recently we had occasion to comment on the end of the 23 year-long termination of the Navy’s A-12 stealth fighter program. Now we’ve come across another termination that seems worthy of comment. It’s the VH-71 Presidential Helicopter program, known as the “Kestral.”

The development contract was awarded by the US Navy to Lockheed Martin and Augusta Westland in 2004. As Flight Global reported in 2009—

The aircraft was marketed as a relatively simple adaptation of the successful EH101 helicopter. However, new requirements imposed on the programme after contract award forced the USN to launch a major re-design. The delays and cost overruns plaguing the VH-71 Kestral have become a rallying cry for reforming the DOD acquisition system.

Sound familiar?

Defense Industry Daily reported—

… the total amount paid to Lockheed over the entire contract ends up costing the taxpayer about $2.2 billion. The biggest reason for all that waste is a President’s own office that couldn’t stop adding requirements, but enforcing Navy certification requirements on a helicopter designed to commercial aviation standards wasn’t helpful, either.

Inside Defense reported that the final Termination Settlement payment was $91.1 million. That final payment included “$38.5 million for completed work and $51.6 million in termination fees.” According to the same source, “that brings the termination total to about $203 million.” Thus, it seems that the termination settlement expenses were roughly nine percent of ITD program costs.

Remember that longish article we wrote about Boeing and its inability to get the government to reimburse it for its settlement expenses, because Boeing had exceeded the Limitation of Funds ceiling? Well, when you are tracking your costs for compliance with the LoC/LoF clauses, we suggest you add another eight to ten percent on top of those costs, to cover your termination settlement expenses.

Just a thought ….