Wednesday , March 14, 2018 - 5:51 AM
(c) 2018, Bloomberg.
Air Force Secretary Heather Wilson says President Donald Trump deserves the credit he’s taking for helping to push down the cost for two new Air Force One jets.
“The president was directly involved with negotiations with the CEO of Boeing,” Wilson said in an interview, referring to the aerospace company’s Chief Executive Officer Dennis Muilenburg. “It’s always a good day when the president cares about your program.”
Trump, who’s scheduled to visit a Boeing plant in St. Louis on Wednesday, complained even before he took office about the cost of the two planes that gain the Air Force One designation whenever the president is on board. The converted 747 passenger planes are costly in part because they serve as a flying command post and fortress, outfitted with advanced communications technology and defensive capabilities.
The White House announced last month that Trump had managed to save $1.4 billion by getting the cost for the fixed-price contract down to $3.9 billion. Public estimates suggest the savings will be far less -- perhaps a few hundred million dollars.
“Our job is now to finish up the contract provisions with Boeing,” which “probably should be finished this summer,” Wilson said. The Air Force is requesting $673 million next year and $739 million in fiscal 2020 for the Air Force One project.
On another Boeing contract, Wilson said the Air Force plans to negotiate with the Chicago-based company to compensate the service for the latest delay in meeting the key milestone for its KC-46 aerial refueling tanker.
Boeing’s program schedule continues to show that it plans to deliver the first 18 tankers, two spare engines and nine sets of wing-mounted refueling pods by October, which would be 14 months later than the initial date of August 2017.
But the Air Force said last week that the required deliveries “are more likely” to be completed “in late spring 2019.”
“We want Boeing to deliver aircraft that are suited to purpose and that are in good shape and ready to go,” Wilson said in the interview. “The taxpayer is paying no more money for this program. The schedule has slipped. We still think that Boeing is optimistic on when they’re going to start to deliver aircraft. They haven’t been hitting their dates.”
Boeing is required to use its own funds under its “fixed priced-incentive fee” contract, which caps the Air Force’s liability at $4.9 billion. The Air Force estimates Boeing will complete the contract for $6.3 billion, or $1.4 billion over budget. Boeing estimates it will complete the development work for $5.9 billion.
Asked about Wilson’s remarks, Boeing spokesman Chick Ramey said in a statement that the “men and women building, testing and certifying tanker aircraft are working extremely hard alongside our U.S. Air Force teammates to ensure the KC-46 is a game-changer. While there is always risk on any development program, Boeing stands behind our commitment to provide warfighters with the most advanced refueling capability in the world as quickly as possible.”
Wilson is likely to be pressed about the tanker delays and compensation from Boeing when she testifies on the fiscal 2019 budget proposal Wednesday before the House Defense Appropriations subcommittee.
The Defense Department’s fiscal 2019-2023 budget calls for spending $20 billion buying and modifying 75 tankers. That includes $15 billion in procurement spending.
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