AF would protect tanker contract ‘no matter what’

AF would protect tanker contract ‘no matter what’

If given the choice, the Air Force would protect the KC-46 tanker fixed price contract over other modernization priorities, the Air Force’s top acquisition officer said Tuesday.

Air Force leaders have celebrated the fixed price development contract the service landed with Boeing for its KC-46 tanker. However, those same leaders have said that sequestration and the continuing resolution puts that contract in danger.

Without the appropriate funding levels, the Air Force would potentially have to renegotiate the contract and there are no guarantees Boeing would again agree to a fixed price deal. The fixed price portion of the contract is key because it stipulates that any increases in costs are funded by the contractor, not the government.


Just like sequestration, an extension of the continuing resolution would put the tanker contract in danger, explained Lt. Gen. Charles Davis, the Air Force military deputy for acquisition. He spoke Tuesday at the defense conference in Washington D.C. sponsored by Credit Suisse and McAleese and Associates.

The continuing resolution freezes appropriations to 2012 levels. In 2013, the Air Force is slated to pay $1.8 billion toward the tanker — a considerable boost to the $870 million it paid in 2012. If Congress can not agree to a federal budget for the remainder of 2013 and the continuing resolution is extended, the Air Force will not be able to pay the $1.8 billion that Boeing is due.

The House of Representatives has issued a budget that includes defense appropriations for 2013, but those budgets have been shot down in the Senate before. Davis said having the appropriations would give the Air Force and the other services a data point in which they could have flexibility to protect certain programs.

Even if sequestration is not averted, eliminating the continuing resolution would provide the Defense Department additional funding and flexibility.

“Once you give them just one data point in the equation, they can do some very miraculous things on a case-by-case basis, but they need to know what that data point is,” Davis said.

With that data point, Davis said Air Force acquisition officials would protect the tanker “no matter what.”

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Saw that happening all along. However even before Sequestration these was cut down. Once it was the KC-46 to replace all KC-135s and possibly all KC-10s. Then it was just CK-135s. Now its just a portion of KC-135s. So the program has been scaled down. The KC-135 will fly alot longer in USAF service now as well.

Let’s see what project in the USAF’s budget gives out first: the funding for the F-35A, the Tanker contract, or the next generation bomber. They can’t afford all three. Something has to give.

Fixed price contracts are a great idea. Boeing are really sweating to not have any flaky nonsense happen on the KC-46 program, because they know they’ll be on the hook for cost overruns.

So why did the services not insist on such a fixed price contract for the F-35?

Instead we have a situation where LockMart make design and fabrication mistakes on the F-35, and then even more public money gets handed out to LockMart to fix those mistakes that they made.There is no disincentive for them to work carefully and avoid error.

Yeah, especially when they decide to build the plane and design it at the same time. (Gee, who would have thunk that would be a problem?)

The AF says they need tankers and they need them now, and we’re already too far into the F-35 to cut that…so it’s gotta be the NGB that takes the hit.

Actually, a fixed price contract is not abnormal in other, more rational, parts of the globe. As one example, the UK MOD does it right. They set the requirements and the cost. If costs go up, the manufacturer eats it. If requirements aren’t met, the contract is cancelled. So what happens is the contractor “over builds” the product to a higher set of requirements to reduce the risk of falling short. So in the end the MOD gets a better product (the MBDA Meteor missile is an excellent example).

I would argue that no sane military would enter into a ‘cost-plus’ agreement…!!!

You can’t blame Lockheed, et al. They’ve suckled on the swollen teat of Pentagon procurement for so long that their milk mustache is permanent…

Easy solution for the bean-counters and, more importantly, the so-called “leadership:” Get rid of the Air Force Uniform Board and all the DoD Uniform Boards and put a moratorium on all actions on uniforms and personnel clothing/wear accessories unless an URGENT need arises.

The UK MOD has it right? Are you serious? I do not have the discipline or the background to compare military equipment procurement contracts. I’m sure the attorneys want it that way. However, I know a fixed price contract requirement will have the effect of restricting improvements in performance we have grown to expect from US aerospace companies. No new designs would be proposed under such a system. Modest (i.e. sure thing, already commercially developed) improvements to existing aircraft and weapons would be the result. Unless potential enemies are similarly restricted, the USAF will quickly become disadvantaged. The proper thing to do is have sensible people defining reasonable requirements. Keep the pie-in-the-sky visions to a minimum and you’ll be OK. Now, I have this idea for an anti-gravity machine I’d like to sell you.

The NGB is a priority for Air force beacuse its the credibility of the Air force who is in the game , you go nowhere now with B-52 or B1-b

I hope it’s the F-35A, but I think you’re right. The NGB does look like the most probable target.

Being a procurement officer, I can tell you that that is not the way to draw the best out of industry. They can give you pie in the sky all they want but ultimately, once requirements are validated, defined, and transcribed into a contract, they need to be met. The kind of development you speak of needs to be verified in a prototypical stage. In the F-35’s case, at the end of the competitive selection LM won against Boeing. That’s where the pie in the sky ends. No issues with cost plus there. But once we start building airplanes in LRIPs, cost plus is a wonderful way for business to accept no responsibility for their promises or pathetic lack of project management skills.

Let’s face it, contractors have been milking DOD for years under cost plus agreements and it needs to be severely curtained or our weapons programs will become unaffordable. How will our enemies like that?

Boeing has the greatest Business Plan of all Federal Contractors. With business and/or support production of parts and materials in all 50 states, it is easy to have our “Honest and Ethical” elected officials obligated to Boeing. All of the talking-heads discussing the pro’s and Con’s of contracting are missing the point. Boeing is between a rock and a hard spot with this one because they’ve bought and paid for “Honest and Ethical” elected officials who are now fearing that their constituents and are trying to figure out how they can save their A** and through Boeing under the bus.

1) They won’t cancel the F-35A because that’s what more than half of the foreign customers are buying. Without the F-35A, the entire program begins the death spiral that killed F-22.

2) There were mistakes made on BOTH sides, contractor and government, some of which resulted in expensive retrofit and rework. To hold the contractor team solely liable when mistakes were made on both sides would be totally unethical and probably wind up in a lawsuit for compensation.

3) Don’t forget, the KC-46 is based on a known, tested platform, the 767. The JSF STOVL technology is still being tested and proven, hence the significantly higher risk factor.

I think in the end, the F-35A will share some of the burden along with some of updates of legacy programs like F-15s, F-16s, and F-22s. The government can’t afford to restructure the tanker contract.

NGB wouldn’t be so much of a need if we had built more B-2s, or at least B-1s.

F-35 is to expensive, build the F-22 line again, its proven now that the bugs are out, and give the plans to Boeing to build more on a fixed price basis. Build some F-35’s for the Navy and Marines. We are broke people, so cut some more fat from LockMart!

It’s ok you can say it twice.. lol

AS ONE WHO FLEW B-47S AND B-52S AND HAS “SUCKED” A LOT OF JP-4 , THE WHOLE MILITARY, ARMY, MARINE CORPS, AIR FORCE AND NAVY, DEPEND ON THE TANKERS TO GET SOME PARTS OF THEM TO FAR OFF DISTANCE PLACES. NO TANKERS –NO WORLD WIDE DEPLOYMENTS — IT IS AS SIMPLE AS THAT.

Mike, I do not see the value in “prototyping” that you do. My observation is that it enourages bigger technology leaps and lengthens time to develop and deploy. The F-35 was prototyped wasn’t it? I could make the case that it was prototyped twice, as the AA-1 first flying jet was an overweight orphan configuration. The facts are that the decision to proceed with such an ambitious program was based on faith. Didn’t you see that little triangle in the master schedule that was labeled “and then a miracle happened”?

Affirmative OJJ. Let me examine the the reverse logic of your statement. If the civilian administration decides there should not be world wide deployments any more; that the USA should be kinder, gentler and less threatening for a change; having fewer tankers (or no tankers) is just the ticket. Since the USAF is on track to be half the number of planes they had in 2005 by 2020, I’d say tankers are expendable. Protect them no matter what? Puh-leeze! Where is the general who said something similar about the F-22? He eventually decided that he “needed to resign to spend more time with his family” after a few phone calls from powerful people.

Reminds me of the F-16. The F-15 and F-16 were being developed at approx. the same time. The F-15 came out first as the fighter/intercepter aircraft. The F-16 came out as an inexpensive lightweight fighter/bomber. The F-16 was to be used the ground support roll, yet be able to protect itself, thus not requiring an escort by F-15’s. WELL fighter “Jocks” were having none of that. After the first run came out of those inexpensive lightweight fighter/bombers came out, they kept them until the “UPGRAD” model could made. These upgrades were trying to turn the F-16 into a small F-15 and the price exploded and the aircraft began to crash into the ground. The one that is used today is a slightly less upgraded model and very expensive. The cost was not from the manufactures but from the fighter “Jocks” “want” not need of unneeded extras. One ironic twist to all of this, at the time the F-16 was being developed another manufacture was developing an aircraft called the F-17. The F-16 was picked over the F-17 even though the F-17 beat the F-16 in all the fly off tests. It was found later that the because the F-16 would be build in Taxes the political pressure exerted on the Air Force made the F-16 the winer. HOWEVER the Navy took the F-17 made some minor adjustments for carrier landings and called it the F-18 their primary fighter and bomber and tanker aircraft. HOW ABOUT THAT THE NAVY GOT THE BETTER AIRCRAFT.

Great discussion, guys. Thank you.

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