The Air Force does not plan to split the initial contract for 179 replacement tankers between offerors Boeing and Northrop Grumman-EADS, per the service’s top acquisition official and her military deputy. Sue Payton told the Financial Times that the Air Force could not afford to split the buy. Despite the view by some respected defense analysts—including Jacques Gansler, the Clinton Administration’s DOD acquisition guru—that a split buy might save money in the long run. (Gansler espoused that view in a new study, first reported by Reuters news service.) According to Payton, the Air Force currently is engaged in a “balancing act” with recapitalization that prohibits such a move; she says, “We can’t afford to put all the money in tankers that it would take to do something like that.” Military acquisition deputy, Lt. Gen. Donald Hoffman, briefed a House Armed Services panel in a closed door session last week on the same cold hard KC-X tanker replacement program facts. And, according to the briefing slides we obtained, the KC-X contract award has indeed slipped from this fall to the end of the year because of its change in strategy to the one winner-take-all approach.
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.