Cost overruns on the U.S. Air Force’s KC-46A Pegasus tanker have climbed to $6.9 billion from more than $5 billion last December.
Under the terms of Air Force’s February 2011 contract with Boeing [BA] for the tanker, the company has been responsible for picking up development costs exceeding $4.9 billion for the first four planes and any overruns thereafter in production lots (Defense Daily, Dec. 3, 2021).
Boeing has delivered 62 KC-46As to the Air Force thus far out of a planned 179.
Given that Boeing’s fixed-price contract for the KC-46A Pegasus tanker is more than a decade-old, the Air Force will almost assuredly not alter the arrangement to cost-plus, but the service is looking to apply lessons learned from the contract to future ones, Air Force Secretary Frank Kendall has said.
Before his nomination as Air Force secretary in April last year and his confirmation three months later, Kendall favored considering changing the KC-46 contract from fixed-price to cost-plus.
“On its surface, designing and building a tanker variant of a commercial transport would not seem to be all that high risk,” Kendall wrote in a column for Forbes in March last year. “Boeing started with a proven commercial design and had built tankers before, although not recently. From the outset, however, the program has encountered problems. It may be time to reconsider fixed-price development, even in cases like this.”
In Kendall’s view at the time, a cost-plus arrangement would have allowed DoD to exercise better program oversight, direct contractor risk reduction efforts, “and potentially avoid costly mistakes.”
The Air Force said this month that it foresees a delay of 19 months in fielding the Remote Vision System 2.0 (RVS 2.0) for the KC-46A Pegasus (Defense Daily, Oct. 7). The service and Boeing agreed on a redesign of the original RVS on April 2, 2020 to fix faulty RVS depth perception, which may lead to scraping of the boom on aircraft being refueled.
“After thoroughly evaluating all the data and assumptions that went in to the current RVS 2.0 schedule during a Program Management Review (PMR) last week, the joint team determined that an additional 19 months will be required to achieve an Operational Military Flight Release (MFR) for the RVS 2.0 upgrade, resulting in fleet release being delayed from March 2024 to October 2025,” the Air Force said on Oct. 7. “This change in schedule is primarily driven by sub-contractor development timelines, but also includes updates related to FAA [Federal Aviation Administration] airworthiness process alignment, and USAF airworthiness policy/process integration.”
The end of KC-46A initial operational test and evaluation and a full-rate KC-46A production decision may not come until fiscal 2024 or fiscal 2025 because of Category I deficiencies with the aircraft’s RVS and the actuator for the refueling boom.
In 2020, the Air Force said that its goal was to field RVS 2.0 by 2023. RVS 2.0 is to have 4K color cameras, operator stations with larger screens, a laser ranger for refueling aircraft distance measurement and boom assistance augmented reality.
On Oct. 26, Boeing attributed the increase in charges on the KC-46A program to supply chain constraints, labor instability, and the RVS 2.0 fielding delay.
The Air Force Life Cycle Management Center (AFLCMC) has not responded to email questions on Sept. 21 on any specific technical issues behind the predicted RVS 2.0 delay; specific lighting and weather conditions under which the refueling boom is liable to scrape paint off aircraft being refueled; and whether the Air Force is considering buying Airbus A330 tankers that have not had remote vision system refueling problems.
In addition to RVS 2.0 and the refueling boom actuator, the KC-46A program has faced issues with the long-wave infrared (LWIR) cameras for detecting aircraft coming in for refueling.
According to a Government Accountability Office (GAO) report in January this year, “the RVS program manager noted concerns that the LWIR panoramic cameras, though not a critical technology of the new RVS, will not meet requirements to detect and recognize fighter sized aircraft within required distances absent significant hardware changes.”
“Without a plan outlining a path forward towards maturing the critical technologies before the preliminary design review [for RVS 2.0], the program is at risk of facing additional cost increases to mature the new RVS, as well as encountering delays in developing a solution for refueling covert aircraft,” GAO said.