The Air Force may have to re-open the next-generation aerial refueling tanker contract if sequestration forces across-the-board budget cuts, according to its chief of staff.
Gen. Norman Schwartz told an audience yesterday at a Credit Suisse conference in Arlington, Va., that the acquisition of Boeing’s [BA] KC-46A is “on schedule and on task,” but asserted that sequestration could ruin the “good deal” the service has in its firm fixed-price contract.
“If we get sequestration that requires a proportional decrease in the program, it introduces the potential of having to re-open the contract, which is not something we look forward to doing,” Schwartz said of the mandatory half-trillion dollars in Defense Department budget cuts that could take place if Congress doesn’t ratify a deficit reduction package.
The sequestration cuts could come as a result of the failure of a congressional “super committee” to craft a plan last year to cut the federal deficit by $1.2 trillion. Under the Budget Control Act of 2011, if Congress could not agree to such a plan last year, which it did not, the sequestration process would trigger $1.2 trillion in long-term cuts starting in January 2013, with half coming from the Pentagon. The roughly $500 billion in defense cuts would be in addition to a $450 billion reduction to DoD’s 10-year spending plans already approved by law (Defense Daily, Feb. 9).
Boeing said in November that the KC-46A is scheduled to meet its next milestone in the spring while the Air Force said it expects the tanker to make its first flight in 2014. Boeing won the $3.5 billion contract over rival European Aeronautic Defense and Space (EADS) in February 2011. The initial contract is for the first 18 planes while the overall program calls for 179 aircraft and a total value at upward of $30 billion (Defense Daily, Nov. 7).