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Boeing Co. and two subcontractors might stop development work and lay off employees working on the manned vehicle portion of the Army's Future Combat Systems program because it has run out of money, the Army said.

A Boeing order to stop work on the manned armored ground vehicles program would result in BAE Systems and General Dynamics Corp. laying off as many as 1,300 employees unless two congressional committees that oversee the defense budget approve a transfer of $295 million, the Army said Monday, according to Bloomberg News.

"That money has now been exhausted and must be restored," Army Lt. Col. William Wiggins said in an e-mail. Wiggins said he did not know when a stop-work order or layoffs might begin.

London-based BAE System's North American unit and Falls Church-based General Dynamics are the primary companies developing eight models of manned tactical and support vehicles for the Army's $164 billion Future Combat Systems program.

A General Dynamics spokesman referred all comment to the Army, and a BAE Systems spokesman had no immediate comment.

But a Boeing spokeswoman said that "reports of imminent layoffs on the FCS program due to funding issues are incorrect.

"It is our understanding that a funding reprogramming request was submitted to the congressional defense committees and is proceeding through approvals," she wrote. "The reprogramming approval needs to occur in a timely fashion, however, to allow the FCS program to continue to execute on plan."

Both the House and Senate Appropriations committees this month approved the funding transfer. The House Armed Services Committee has reviewed the request and is expected to approve it this week, Wiggins said in his e-mail.

Although Wiggins said the Senate Armed Services Committee "has taken no action to date," a spokesman for the committee said it "is currently reviewing the request," which was submitted July 11.

"Typically, the committee takes around three weeks to review and consider requests before making a decision," the committee spokesman said. "We will have a decision as soon as possible in line with our established timeframe."

The Army proposed transferring the $295 million from Army radio and medium tactical vehicles programs, according to a June 30 request to Congress.

The transfer was necessary to "prevent a stop-work order and layoffs of the ground vehicle contractors and their partners," that request said.

The Future Combat Systems program is a new family of faster manned and unmanned battle vehicles linked by high-speed, digital communications, unmanned drones and new combat radios organized into brigade-combat teams lighter than today's Army.

COMMENTS

• If the contract has run out of money and not produced the results desired, why would they keep it going? This appears to be another bottomless money pit that Congress keeps throwing my money into. Congress must stop this foolishness and let contracts that run out of money expire and go away. The 1,300 government employed workers freed up would go to other areas in the economy and pressure wages to be lower than would otherwise be the case. This would hold down inflation and reduce the deficit. Taxpayer Posted July 26, 2006 7:06 AM