U.S. Tightens Terms on Boeing Army Program

Boeing Co.’s profit to manage the $17.4-billion development phase of the Army’s Future Combat Systems program is being more closely tied to performance, the Government Accountability Office said.

Boeing’s fixed fee will now be 7% of the contract, down from 10%, and its potential “incentive fee,” or bonus, rises to 8% from 5%, Paul Francis, the GAO’s director of acquisition and sourcing management said in remarks prepared for congressional testimony. The change is aimed at keeping costs down on the Pentagon’s second-most-expensive program.