With questions still surrounding the future of the C-5 fleet, the Department of Defense should apply “careful planning” to ensure that C-17 production is not ended prematurely and then restarted at a substantial cost, says the Government Accountability Office in a new report on strategic airlift. In the Nov. 21 report, GAO states that the Air Force’s $9.1 billion budget to modernize the avionics on all 111 of its C-5s and re-engine 52 of them “may be understated” due to DOD’s lack of proper risk and uncertainty analysis. Moreover, it says, the engine upgrade portion, known as RERP, is “underfunded by almost $300 million” and may be unachievable if the engine production schedule is not met. The Air Force’s current plan is to acquire 205 C-17s to operate along with the C-5s. But this mix may change, GAO notes, based on the results of a new mobility capabilities study, the findings of which are expected around May 2009. The current C-17 production schedule calls for line termination in September 2010. “Both the manufacturer and Air Force agree that shutting down and restarting production would not be feasible or cost effective due to the costs to reinstate a capable workforce, reinstall tooling, and reestablish the supplier base,” GAO writes. Even if C-17 production is extended somewhat, the line will eventually shutter and DOD needs to budget for the shutdown costs, GAO states. While Boeing pegs the termination costs at about $1 billion, the Air Force places them at about $465 million, according to GAO. The disparity is in large part because “the manufacturer’s estimate included assumptions about demolishing facilities and environmental remediation, while the Air Force’s did not,” GAO writes.
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.