The Army is going to re-examine the Boeing Co.-led Future Combat System program to better contain costs and ensure stronger oversight, according to defense officials familiar with the situation.

Army Secretary Francis Harvey will meet Sen. John McCain, an Arizona Republican who has urged the Army to transform the FCS contract so that would perform in compliance with normal Pentagon auditing regulations. In Senate Armed Services subcommittee hearings last month, the senator expressed concern about FCS’s atypical contract terms, which give Boeing extensive power and make it free from certain cost and auditing requirements. Initially, the contract type, called an "Other Transaction Authority," was established for non-defense companies.

It is unclear if the changes under consideration would force the Army to rebid some provisions of FCS, a prospect that neither the Pentagon nor Boeing would welcome. The potential impact of the changes on Boeing’s share of the program also remain cloudy. Boeing defense executives have said FCS is one of the Chicago aerospace company’s most profitable contracts.

Reminding that the Army recently modified the FCS program and cut a new contract with Boeing, spokesman Randy Harrison said that "if the Army wants to change the contract, we’ll change the contract" again. Boeing believes the issues raised by Sen. McCain will be satisfied with modifications to the existing contract, without negotiating a new pact.