Boeing Wins Aerial Tanker Contract

By on Monday, February 28th, 2011

The Boeing Co. has won the contract to produce the Air Force’s KC-46A aerial refueling aircraft, replacing the Eisenhower-era KC-135s and the Reagan-era KC-10s.

Deputy Defense Secretary William J. Lynn III said the competition for the contract was fair, open and transparent and he believes it will survive any possible challenge. “What we can tell you is Boeing was a clear winner,” Lynn said.

Air Force Secretary Michael B. Donley made the announcement at the Pentagon this evening. Both offers –- by Boeing and EADS -– met all 372 mandatory requirements under the competition, he said. The contract signed today is for $3.5 billion for engineering and manufacturing. This portion of the contract will yield four aircraft.

Under this award Boeing will build 179 aircraft. Overall the contract is worth $30 billion with a final amount depending on the options exercised, Donley said.

“I am pleased that this process has produced an outcome after an exhaustive effort by hundreds of the department’s very best people, that we will get about delivering a capability that’s long overdue and we can stop talking about it,” Air Force Chief of Staff Gen. Norton A. Schwartz said.

The first 18 aircraft will be delivered by 2017.

Lynn said warfighters defined the requirements for the aircraft, and this is a fixed-price contract. “This competition favored no one, but the taxpayer and the warfighter,” he said.

Donley called the tanker buy the service’s No.1 need. He said he and Schwartz “are confident that when our young pilots, boom operators and maintainers receive this aircraft, they will have the tools they need to be successful at what we ask them to do.”

Boeing will use a version of the 767 aircraft for the new tanker. EADS based its submission on the Airbus A330.

Donley said Boeing’s submitted cost for the contract will provide “substantial savings to the taxpayer.”

This was the third time this contract has been awarded. In 2003, the Air Force agreed to lease aerial tankers from Boeing, but the deal fell through due to illegal acts that had involved some Boeing and Pentagon officials.

In February 2008, EADS won the reconfigured contract, but that was voided after the Government Accountability Office ruled that Boeing was treated unfairly.

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