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Memorandum
U.S. Department of Transportation
United States Coast Guard | Subject: | LTS-101 POWER BY THE HOUR CONTRACT,
REQUEST FOR LEGAL OPINION REGARDING | Date: | 29 NOV 93 | | | Reply to: | | | From: | Chief, Aeronautical Engineering Division | Attn. of: | G-EAE-1 | | | | CDR Sechler | | | | 7-0184 | | To: | Chief, Procurement Law Division | | | | Ref: | (a) Mtg between CDR Sechler
(G-EAE) and CDR Roan (G-LGL) of 17 Nov 93 | | |
The Coast Guard and Textron-Lycoming entered into a very unusual, and successful, contract in 1990 for the complete support of the LTS-101. The LTS-101 is the formerly troubled turbine engine that powers the HH-65A helicopter. The contract was the end result of negotiations of criminal charges under the False Claims Act and allegations of contract breach. This process was described in reference (a) by CDR Sechler, who was the Coast Guard's negotiator at the time. The resulting contract, enclosure (1), has been a tremendous success. The agreement has dramatically reduced our cost of ownership, matured the engine and its support infrastructure, and allowed the Coast Guard to decapitalize tens of millions of dollars of LTS-101 material.
The Power by the Hour contract is so advantageous to the Coast Guard that I would like to explore alternatives to extend the agreement for the life of the HH-65A. The unusual terms and conditions of the contract result from its settlement of damages origin.
A review of enclosures (2) and (3) demonstrates that it was always the Coast Guard's intent to continue this support program if it was successful.
I request that you review the contract, the settlement Memorandum of Understanding, and the Project Officer's post negotiation memorandum to file so that you can advise us on alternatives to extend the agreement. (Start of Page 2)
The point of contact on my staff is CDR Sechler
at (202) 267-0184.The Contracting Officer, Ms. Gill, is available at (919) 335-6141.
_______(Signature)_______
THOMAS S. JOHNSON III
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