Professionalism/Ernest Fitzgerald and the Lockheed C-5A

The C-5A Galaxy

The C-5A Galaxy is a large military transport aircraft, contracted to Lockheed by the U.S. Air Force in 1965. The aircraft was primarily designed to transport heavy loads across the globe on short notice . The Army was developing capabilities for rapid deployment but their equipment was significantly heavier and bulkier than the current cargo carriers could handle. In supporting the Army in rapid deployment, the Air Force was responsible for developing a new state-of-the-art carrier to transport troops and massive equipment like the Bradley Fighting Vehicle and HUMVEE. As the largest airlifter in the U.S. Air Force, the C-5A was constructed with the ability and expectation of transporting such cargo. However, when the promising aircraft started with a $1.9 billion proposal by Lockheed for a fleet of 115 C-5As at $16 million per plane and later jumped to $40 million per plane, individuals like Ernest Fitzgerald could not sit in silence while it happened .

The Key Concerns of the C-5A Galaxy

The primary concern with the C-5A was the extreme costs due to development, maintenance, and renovations over time. The aircraft experienced several design flaws that gained attention from both a performance perspective and cost perspective.

Cost

From the beginning, the C-5A was influenced by money as five companies made proposals for the aircraft’s design. However, while Boeing’s design was deemed the best by an Air Force evaluation team, officials gave the contract to Lockheed whose proposal was a lower total cost . The C-5A contractor decision came at a time when the production of the Lockheed C-141 Starlifter, the smaller generation of the Galaxy, was coming to a close at the Marietta Air Force Base dominated by Lockheed . If Lockheed did not receive the contract, the base was likely to close and impact the Georgia economy. The decision to go with a lower cost model was the deciding factor in selecting Lockheed, according to United States Air Force Chief of Staff General John P. McConnell, but the $400 million in saving turned into a cost overrun of fives times that figure .

In January 1966, a civilian named Ernest Fitzgerald, first discovered the cost overruns in a routine trip to Marietta. The following table shows the increase in the cost overrun within a two-year period:

Date	Overhead Cost Above Contract
January 1966	Fitzgerald discovers excess costs
August 1966	$10 million
October 1966	$18 million
December 1966	$212 million
Summer 1968	> $1 billion
January 1969	$2 billion

In November, Fitzgerald returned to Marietta where Lockheed denied overrun costs yet refused to provide cost figures. Overrun costs had reached $212 million by December. When the Comptroller of the Defense Department received a copy of the cost summary in January of 1967, it showed no overrun costs. A request for the accurate costs followed as the Office of Secretary of Defense knew about the overrun costs .

Performance

The C-5A’s long struggle for success can be attributed to a combination of cost overrun and failure to meet high performance standards. When Congress heard of the potential increases in costs, the only justification was the unchanging performance standards of the aircraft. In June 1969, Fitzgerald revealed three contract changes that degraded the plane's performance. The Air Force refused to provide additional information until after the Congressional hearings on the plane's concern had ended. After the hearings, Fitzgerald received a complete summary that uncovered 46 changes in the plane's design and 789 specification changes . Fitzgerald claimed that the specifications appeared to be written based on the plane rather than vice versa.

Despite all of these contract changes, aircraft tests in June 1969 yielded cracked wings from the stress of the cargo weight, which was lighter than the contract requirements mandated. A wing fix was designed to mitigate the problem, and the planes that were already built or under construction would have to be re-winged. The cost of this fix was not revealed to Congress, nor was it successful in testing. According to Representative Moorhead, Congress became frustrated with the decreased standards of the Galaxy's performance. In June 1970, the first operational C-5A approached a welcoming crowd at Charleston Air Force Base, where upon landing, the aircraft blew a tire and another tire popped off down the runway . While the plane was undamaged, it later went back to Marietta, where a fuel cell exploded during further testing, killing one mechanic, injuring another mechanic, and burning the entire plane. Lockheed estimated the loss of one plane at $23 million whereas the Air Force estimated $60 million. The event was not only a major monetary loss, but also a harsh reality of the program's failure.

Ernest Fitzgerald: Whistle Blower to Congress

At the time of the C-5 Galaxy controversy, Ernest Fitzgerald was the deputy for management systems for the Office of the Assistant Secretary of the Air Force for Financial Management and Comptroller. Under this title he was responsible for the development of improved management controls, specifically including management information control systems, economic cost effectiveness analysis, statistical programs and analysis, cost estimating and analysis, and productivity enhancement and measurement . Fitzgerald was a mid-level civilian employee in the Pentagon whose values were shaped by harsh economic times growing up during the Great Depression in Birmingham, Alabama. Having served in the U.S. Navy during World War II and completed his bachelor’s of science in industrial engineering, he established himself as a pioneer in the field of defense industry cost control . The wasteful spending he observed in the Galaxy program bothered him, and ignored by Air Force management, he took his concerns to Congress.

Fitzgerald's largest ally in Congress was Senator William Proxmire, who fought against wasteful government spending . Senator Proxmire first called Ernest Fitzgerald to testify before the Joint-Economic Committee in the fall of 1968. Disturbed by the prospect of Fitzgerald's Congressional testimony, the Air Force initially refused to allow him to testify and intercepted a personal letter addressed to Fitzgerald from Senator Proxmire . Eventually, in January 1969, Fitzgerald revealed the deceptive practices by the Pentagon, contradicting claims that the project's continued funding would result in an aircraft with enhanced military capabilities. During the January hearings, Fitzgerald mentioned that Air Force officials were ignoring spare part and other costs; accounting for these costs had increased the 1965 cost projections from $300 million to over $1 billion only four years later .

Furious about the disclosure, the Nixon administration felt that Fitzgerald had to leave. Fitzgerald later found the Nixon administration had gone to lengths to attempt to discredit him and have him terminated for having divulged ‘classified’ information; in his book, he claims that officials went so far as falsifying documents to establish this . Fitzgerald was ultimately fired in fall 1969 in what the Nixon administration called “reorganization,” but apparently there is some indication that Representative Gerald Ford’s office had been notified that Fitzgerald had “made it difficult” for Air Force Assistant Secretary .

A Special Relationship between Industry and Government

Fitzgerald had not divulged any classified information, nor broken any laws. Ultimately, Nixon officials secretly felt that Fitzgerald was not a team player and had undermined the chain of command. Cost overruns accompanied by a cozy relationship between the Air Force and Lockheed bothered Fitzgerald about the C-5A project. Fitzgerald's testimony threatened to do more than pull a plug on a wasteful and poorly managed program, but also shed light on the massive growth of the military industrial complex whose demise would harm the economic interests of very powerful interests - namely the defense industry.

Once it became evident that the costs for the C-5A were severely underestimated, Lockheed raced to improve the aircraft and modify contract requirements to speed up the delivery. At the ceremony for the first finished C-5A in March 1968, taxpayers dollars were used to fly government officials, including members of the House and Senate Armed Services Committee and hundreds of other government personnel. Lockheed employees distributed hefty press kits that announced the plan was meeting cost and production plans .

Whether the Air Force's mismanagement stemmed from political and economic interests or from a genuine pressure to allow Lockheed's excessive expenditures to persist because of sunk costs is unclear. Nevertheless, the Air Force was determined to prove that the C-5A program was progressing according to plan. To invalidate Fitzgerald’s testimony, Air Force officials altered their cost estimates. The tampering with official documents was later determined in a hearing when true cost estimates were revealed. The resulting scandal during the Nixon administration contributed to an era “notoriously fraught with suspicion and distrust, anyone who instigated scandals that might threaten the image of the presidency was considered persona non grata” . According to an account in The Pentagonists, the White House reaction was that "Mr. Fitzgerald had transcended the normal bounds of an executive branch employee." White House officials were "concerned about the leaks that had occurred and the detrimental effect this was having on the image of the military overall” . Fitzgerald’s actions raised awareness and increased the role of Congress, and indirectly the American taxpayer, in defense spending.

Conflicting Perceptions of Ernest Fitzgerald

Fitzgerald embodied frugality and prudence when it came to financial matters, and disagreed with the mentality of many defense-contracting authorities. To the advocates of monitoring abuses in government financial management, Fitzgerald is regarded as an individual who prioritized truth over profit. Victories over Nixon and the Pentagon made Fitzgerald a legend or, as the New York Times called him, "a folk hero to federal employees." Fitzgerald also received bipartisan support and admiration from Congressmen during his long-running appearances in trials. Senator Charles Grassley (Republican, Iowa) attributed Fitzgerald's efforts as "one of the "few major victories the taxpayers have had this decade." Senator William Proxmire (Democrat, Wisconsin), applauded Fitzgerald for telling the truth "about how the government spends the taxpayers' money." Advocates also included members of the House of Representatives who shared their appreciation for Fitzgerald. Representative Barbra Boxer (Democrat, California) went so far as to call Fitzgerald "a true American hero" for guiding Congress to effective reform .

However, Air Force officials and several of Fitzgerald's colleagues disagreed with some of those meritorious statements. The assistant secretary for financial management and Fitzgerald’s boss, Richard Carver described a familiar attitude regarding Fitzgerald’s reputation. He said, "Ernie has the capacity to really irritate people.He has a kind of antagonistic way of doing things.” He also added that "the average guy in the Air Force is persuaded that Ernie is more interested in headlines and raising heck than he is in getting the job done."

Conclusion

Fitzgerald would contend that the explosion in defense spending along with the lack of transparency and accountability in defense procurement are features not necessarily unique to one administration or one instance. Fitzgerald was very uncomfortable with the vast growth of the military-industrial complex and the fraudulent accounting that took place at the Pentagon during his tenure. It is difficult to tell whether Fitzgerald truly acted genuinely on ethical concerns regarding cost overruns or whether he was simply protecting himself. It is certainly genuine to ask whether he would have blown the whistle if the plane was under budget, ahead of schedule, but under-performing. Furthermore, it is reasonable to expect that the Air Force and Lockheed look at the Galaxy project as they would any project: the first iteration or attempt at design is not satisfactory, and it is only with multiple iterations and investment of resources that engineering success can be attained. Ultimately, each actor in this case had a different perspective, so the ensuing question is what to do when confronted with a problem, like Fitzgerald, where there are competing ethical perspectives?

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