Defense

March 30, 2012

KC-46 program may experience delays

Only one year into its development, the Air Force’s KC-46 program may experience delays and technical challenges as they try to incorporate three advanced military technologies into the commercial Boeing 767 airliner, which is the basis for the new KC-46 refueling air tanker.

The Government Accountability Office, an investigative arm of Congress, recently stated in a congressional report, “There is broad agreement that the KC-46 schedule risk is a concern.”

“While designing a new tanker using a modified commercial platform is not as technically challenging as a more revolutionary weapon system, the program still faces some technical risks, including technologies that have not yet been demonstrated during flight,” said GAO officials.

The technologies identified by the GAO include a new three-dimensional display for crewmembers that operate the aircraft’s refueling boom and other software. It also raised concerns about the plane’s weight, which is already near its limit, and instability of the hose used on new refueling pods.

The Air Force and Boeing have assessed the overall schedule risk as moderate, citing concerns about risks to the development, the test schedule for the aircraft due to a tight flight testing schedule, work on the commercial Boeing line to prepare the aircraft for military modifications, the need for two Federal Aviation Administration certifications, and software challenges.

Further, the Department of Defense’s chief testing official finds the testing schedule, “not executable as currently planned.”

In the GAO’s assessment, significant concurrency, or overlap, among development and production activities add risk to the program.

Not to mention, Boeing’s recent decision to close its Wichita, Kansas, facility where it planned to militarize the planes add further complications.

The KC-46 program has established its acquisition strategy for development and production, including total cost, procurement quantities, and key milestone dates.

The Air Force initiated the $51.7 billion KC-46 program to begin replacing the current fleet of KC-135 Stratotankers. Boeing plans to produce 18 tankers by 2017 and 179 aircraft through 2027. Other follow-on procurements are anticipated to replace all of the current KC-135 fleet.

The program is using a $4.4 billion fixed-price incentive development contract, which also provides Boeing with incentives to control costs and limits the government’s liability to cover 60 percent of overruns up to a $4.9 billion ceiling. Boeing would cover any costs above that ceiling, unless the government changes its requirements for the tanker and renegotiates its contract.

“Even with these safeguards, it is important to note that one year into development, Air Force and contractor development cost estimates exceed the development contract amount and significant schedule risks have been identified,” the GAO wrote in an annual report on the program required by Congress.

At present, estimated development costs are $900 million higher than the initial February 2011 contract award amount and $400 million over the contract ceiling.

“Given that the KC-46 is one of only a few major programs in recent years to use a fixed-price incentive contract and the importance of tanker replacement to national security, rigorous monitoring of the program’s progress will be essential,” said GAO officials.

The National Defense Authorization Act for fiscal year 2012 requires the GAO to annually review the KC-46 program through 2017.

The DOD waived the requirement for a preliminary design review before the program began system development and demonstration, but this design review is planned for March 2012.

“Although the program’s three critical technologies have not yet achieved the level of maturity indicated in best practices, they have reached a level of maturity consistent with DOD policy,” said GAO officials.

Only about 60 percent of the flight-testing will be completed when the Air Force plans to start low-rate production of the new tankers in August 2015.

According to the Air Force, the initial flight of the KC-46A aircraft is scheduled for late calendar year 2014.

The GAO recommends that DOD leadership monitor the progress and outcomes of this contract to provide lessons learned for future acquisition programs, and that the program fully implements metrics to track achievement of key performance parameters. The DOD fully agreed with these recommendations.

All involved agree that aerial refueling is essential to global U.S. military operations.

The KC-135 Stratotanker, referred to as the “backbone of the nation’s tanker forces,” is more than 50 years old on average, with age-related problems and increasing support costs, these factors could ground the fleet.




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