Defense Secretary Robert Gates has decided to terminate the current KC-X tanker competition and leave it in the hands of the next Administration to decide how to replace the Air Force’s fleet of Eisenhower-era KC-135s, the Pentagon announced Wednesday morning. Based on talks with senior defense and Air Force officials and with Boeing and Northrop Grumman representatives, Gates said it is no longer thought possible to complete the solicitation process and award a contract by January, especially given the “highly charged environment” surrounding the multi-billion-dollar tanker contest. Rather than hand over “an incomplete and possibly contested process,” the best course of action is “to provide the next Administration with full flexibility regarding the requirements, evaluation criteria, and the appropriate allocation of defense budget” for the new tanker, he said. In making this decision, Gates said DOD had determined that the KC-135 fleet “can be adequately maintained” to satisfy Air Force missions in the near term. Budget adjustments will be made in Fiscal 2009 and beyond “to maintain the KC-135 at high mission capable rates,” according to the announcement. But funding for the KC-X program will remain for the period from Fiscal 2010 to Fiscal 2015 in the budget presently under review.
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.