Air Force Cancels Boeing Chopper Contract

WASHINGTON (AP) -- The Air Force said Tuesday that it is formally terminating a contract with Boeing Co. for work on a new fleet of helicopters to rescue downed pilots, part of Defense Secretary Robert Gates' plan to reassess troubled programs.

The termination covers a $712 million systems development and demonstration contract that was awarded to Boeing in 2006 when the Air Force first selected it to build the new combat search and rescue helicopter. The initial award was part of what could have been a $15 billion deal.

Rivals Lockheed Martin Corp. and United Technologies Corp. division Sikorsky Aircraft protested the award, and the Government Accountability Office found fault with the way Boeing was chosen. The Air Force then sought revised bids from the three companies.

But Gates said in April that he wanted to terminate the program because of its difficult history and take another look at whether it was needed.

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