Nearly a decade of delays in the U.S. Air Force’s KC-46 tanker program are partially the Pentagon’s fault for insisting on a contract that made Boeing eat the costs of development problems, the military’s top acquisition official told lawmakers on Thursday.
“I fundamentally think that the root cause of this is the contract type that was awarded for this,” Ellen Lord, defense undersecretary for acquisition and sustainment, told the Senate Armed Services Readiness and Management Support subcommittee.
That came as something of a surprise, considering that Boeing, not taxpayers, has lost more than $4 billion on the project. Using another type of contact would in all likelihood cost taxpayers more money.
Flashback to 2011 when the Air Force chose Boeing over Airbus to build its new tanker. Both companies submitted designs that were considered “off the shelf.” because they were based on the Boeing 767s and Airbus A330s that airlines had been flying for decades.
Both bids were considered low-risk, but Boeing’s bid was much lower than Airbus, so the Air Force chose what is now the KC-46.
Boeing’s design combined parts from different versions of the 767, an approach that led to problems in wiring and other things. The plane has also suffered persistent problems with refueling gear, primarily the cameras and how their video is displayed.
On Thursday, Sen. Jeanne Shaheen, D-N.H., revealed that an electrical problem prevented Boeing from delivering a KC-46 to the New Hampshire Air National Guard last week.
Boeing played down the latest delivery delay.
“The situation that led to a delay in this week’s planned KC-46 delivery to Pease Air National Guard Base is a minor electrical problem on this airplane that was found by our rigorous acceptance testing process,” Larry Chambers, a company spokesman, said in an emailed statement. “It’s not a design or safety-of-flight issue. In flight, one of the radar warning receivers is indicating a fault through the plane’s fault management system.
“We think it may be a poor electrical connection that needs to be re-seated,” Chambers continued. “We are currently evaluating a fix. Resolving this has caused a minor delay to delivery of this single airplane. Boeing expects to conclude this activity within the next several days and is working with the Air Force on a new delivery schedule.”
Lord said it will take constant focus from top leaders at the Pentagon and Boeing to get the program on track.
You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Happy fiscal New Year! That government is funded through Dec. 11, so no threat of a government shutdown for next two months. Still, Congress must now pass appropriations bills after the November election. Send along your tips and feedback to email@example.com or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!
From Defense One
As Navy Pushes for More Ships, Experts Warn Repair Yards Are Crumbling // Marcus Weisgerber
One congressman suggests contracting ship maintenance work to private yards or even working with allies.
Defense Experts Throw Warning Flags As Congress Mulls Tighter Buy-American Rules // Marcus Weisgerber
The House NDAA would require major defense programs to be all-American by 2026.
DOD Pours Millions of Dollars into Print-on-Demand Drugs // Patrick Tucker
Four years after DARPA sought a better way to bring medicine to the battlefield, the technology may assuage broader concerns about foreign supply chains.
Report: Russia’s Military Strength Highest Since Soviet Days
That’s according to a new International Institute for Strategic Studies report. “Russia’s nuclear weaponry and the Russian Aerospace Forces have ... benefited most from a near-decade long increase in investment,” the report states. “The results for the navy and the ground forces have been patchier, but nonetheless also mark considerable improvements in capability. The re-equipment programme has been complemented by reforms to create a core of professional military, much of it held at a high state of readiness, rather than depend on conscription.”
Capital Alpha’s Byron Callan adds this analysis of the IISS numbers:: “Russia’s total military expenditures per IISS was RUB 4.0 trillion in 2015, fell in 2016-18 and then rose to RUB 4.2 trillion in 2019. IISS showed a range of projections for spending in 2020-29 in USD, which is $45 billion in 2020. Upside was to $51 billion by 2029 and downside was $29 billion. These figures are in current dollars. Russia spends ~40% of its budget on Procurement and R&D which is substantially higher than Europe and the U.S. Its purchasing power is higher than these figures suggest because its military pay, O&M and acquisition are paid in RUB, not USD.”
Army Links THAAD to Patriot
As part of the Pentagon’s quest to connect all of its weapons, the Missile Defense Agency and Army have used the AN/TPY2 radar from a Terminal High Altitude Area Defense, or THAAD, system to detect and track a target — and then send the data to a PAC-3 interceptor that shot down the target. "The success of [the test] validates the interoperability of the Patriot and THAAD weapon systems," MDA Director Vice Adm. Jon Hill said in an emailed statement. "This capability is vital to the Ballistic Missile Defense System to defend against rogue threats to our homeland, deployed forces and allies."
Tom Karako, a missile defense expert with the Center for Strategic and International Studies, called the test: “An important, long-awaited test to validate an urgent need for more interoperability. But it’s taken years to pull these programs together & deeper integration is still needed. Lesson for the future: integration across the operational architecture must be there from [the] beginning.”
Meanwhile, Israel Delivers Iron Dome to U.S. Israeli media reports saythe U.S. Army is buying two batteries of the all-weather air defense system, which is said to be able to down targets out to 70 kilometers.
Lockheed Agrees to Fix F-35 Parts Tracker
The “handshake” agreement “calls for Lockheed Martin to compensate the Government with Lockheed Martin investments toward improving [Electronic Equipment Logbook] compliance and accuracy,” Laura Siebert, a Lockheed spokeswoman said in an email. Something like electronic medical records for spare parts, Electronic Equipment Logbooks track components that can be repaired and reused on other F-35s: think display screens or landing gear struts. Defense News reports that as part of the deal, Lockheed will spend nearly $71 million to fix the part-tracking problems.
L3Harris’s New SIGINT Pod
Called RASISR (pronounced rasor) — which is an acronym for Rapid, Adaptable, Smart, Intelligence, Surveillance and Reconnaissance — the signals intelligence sensor is billed “the only pod with the capacity to host L3Harris’ full-spectrum SIGINT capability and other high-performance sensors for multiple platform types including high-speed aircraft and business jets.” Tankers, cargo planes and maritime patrol aircraft can also carry the pod. “The RASISR pod hosts a full-spectrum signals intelligence capability including communications intelligence, electronic intelligence and special signals.”
Switzerland Voters OK Fighter Competition
Just over half of Swiss voters said the country’s Air Force could spend $6.5 billion to replace its Boeing F/A-18 Hornets and Northrop F-5 Tigers. It will choose between the Boeing F/A-18E/F Super Hornet, Lockheed Martin F-35 Lightning II, Dassault Rafale, and Eurofighter Typhoon. Six years ago, Swiss voters rejected a plan to replace the F-5 with Saab Gripen fighters.
The U.S. State Department on Wednesday approved the export of F/A-18s and F-35s to Switzerland. The Super Hornet sale could be worth $7.5 billion and the F-35 sale could be worth $6.6 billion, according to the Defense Security Cooperation Agency, the arm of the Pentagon that oversees international sales. But don’t count on those being the prices offered by each company. “[I]t's not likely the final offering prices (which can be substantially lower than the DSCA case notification),” Cowen & Company analyst Roman Schweizer wrote in a note to investors this morning. “There's certainly of a lot of strategy and industrial factors that go into FMS pricing but the fact that the F-35 package has a USG sticker price $800M cheaper than the F/A-18E/F is pretty surprising. Again, these are not very likely the final prices that will be offered to the Swiss government, so they may not indicate a straight price advantage to Lockheed over Boeing. Of course, there are more than just cost and capability factors at play that could give Dassault and Eurofighter advantages as well.”
More on U.S. Weapon Exports
With fiscal 2020 in the rear-view mirror, the State Department approved $84 billion worth of U.S. weapons for export, according to Schweizer. But as always, that doesn’t yet mean the full amount will turn into actual sales. Take, for instance, the aforementioned Swiss fighter sale — one or neither of the U.S. companies could win. That would cut $14 billion immediately from those fiscal 2020 totals.
Thailand Buys T-6C
The Royal Thai Air Force has ordered 12 Textron T-6C turboprops training aircraft for $162 million. Thai pilots and maintainers will start training in Wichita, Kansas, in 2022. The planes will be delivered in late 2022 and early 2023, Textron said.
Boeing Moving 787 Production
Earlier this year, company leaders had hinted this might happen. Now Boeing says it will move all stop 787 Dreamliner production in Everett, Washington and move all production to a non-union factory in Charleston, South Carolina. Boeing says the move to a single factor in 2021 will “ improve operational efficiency as [the] company adapts to market downturn and positions for recovery and long-term growth.”
Germany Cancels Heavy-Lift Helo
Boeing and Sikorsky (that is, Lockheed Martin) have spent years vying for the heavy-lift helicopter contract. Now Germany says the project was too expensive, according to a defense ministry statement. Boeing had been pitching the CH-47 and Sikorsky the new CH-53K. Germany’s aging CH-53G helicopters are expected to reach the end of their flyable lives in 2030. “The realization of the [Heavy Transport Helicopter] project has a very high priority for the German Armed Forces, as the ability to air transport is of outstanding importance for the mobility and responsiveness of the armed forces as well as for aid and support services,” the defense ministry said. “The project will therefore be continued with changed specifications.”
Space Force to Reuse SpaceX Rockets
The Space Force will allow SpaceX to reuse its first-stage rocket boosters for national security launches beginning next year. SpaceX already reuses rockets for commercial launches.
Rafale Disrupts French Open
A French Air Force Dassault Rafale briefly disrupted play at the French Open Wednesday as it raced to intercept commercial flights that lost contact with air traffic controllers, Reuters reports. Communications were eventually reestablished with the civilian planes. Less unexpectedly, Spain’s Rafael Nadal advanced to the 3rd round with a straight-sets victory over American Mackenzie McDonald.
- Arnold Punaro, CEO of The Punaro Group, has been named chairman of the National Defense Industrial Association. He will lead NDIA’s board for the next two years. Michael Bayer, president and CEO of Dumbarton Strategies of Washington, has been named vice chair.
- President Trump on Wednesday has nominated Brian Davis, a retired Air Force officer, to be an assistant secretary of defense for manpower and reserve affairs.
- Elbit Systems of American has named Jeffery “Scott” Baum, former principal director at the Office of Industrial Policy for the under secretary of defense for acquisition & sustainment, vice president of strategy and growth.