Lost in the din: Good news in the KC-46 tanker program

A video on the Boeing web site shows a KC-46A tanker built from sheet metal to test flight in three minutes. In reality, the program is three years behind schedule.

The Air Force awarded Boeing the contract to build 175 new aerial refueling tankers back in 2011. In some ways the KC-135 replacement program dates back to the turn of the century. Anyhow, one selling proposition was that Boeing would refit it’s tried-and-true 767, still flying in the second-tier airlines. Boeing still makes a freight version.

But plain-Jane freighter to military tanker? That’s like converting a house into a dental office. The outside appearance may not change, but inside pretty much everything is altered. Still, to save costs, the planes start out in the existing 767 factory.

The Air Force finally started accepting the first few production copies of the KC-46 earlier this year. The Government Accountability Office reports the Air Force will have accepted — conditionally — 19 KC-46s by the end of August. Some 50 are in different degrees of construction.

Based on my reading of the GAO report, this is one weird program, but weird in some good ways. On the challenging side:

  • The KC-46 is designed to be two planes in one. Some refueling takes place using a sort of flying nozzle called a drogue at the end of a flexible hose. Some takes place using a rigid, fixed-length boom. In the KC-135 program, a given plane does one or the other. In the KC-46 program, the plane has three drogues plus a boom, so in theory Air Force and Navy planes can be refueled simultaneously. The old tankers have a window in the bottom, and the refueling operators look through it as they guide the nozzle to the target plane. In the KC-46, they sit up front and guide things while watching on a video screen.
  • Yes the plane is late. Those ’60s era KC-135s aren’t getting better with age. The Air Force will shift $57 million next year from the KC-46 program to keep some ancient KC-135s going.
  • As they get delivered, they’ll come with the need to retrofit their refueling booms. In their current state the booms can scrape stealth aircraft, which reduces stealthiness. The solution and refitting will take another three years, maybe four. One reason is that the remote vision system for controlling the refueling apparatus gives a poor picture in some lighting conditions. Also its fixed-length boom is too stiff, making for some hair-raising situations for the planes receiving fuel from it.

GAO report author Jon Ludwigson agreed that the Air Force concluded the utility of the planes as delivered outweighs the cost of waiting until every requirement is met. Air Force staff will conduct operational testing on two non-stealth aircraft, like the B-52 and the F-15.

Late and needing post-development work — such conditions are hardly unknown in Defense contracting. But this is also worth noting:

  • The average acquisition cost has dropped by 17 percent since the initial 2011 estimate, taking into account the entire 175-count production run.
  • The Air Force reduced its development costs by $1.3 billion, and its procurement cost estimates by $6 billion.

How is this possible? Ludwigson says it’s because of the way the Air Force went about the procurement. It insisted on a fixed cost deal to limit its own risk and shift more to the supplier, held its requirements steady, and included a price hold-back for unmet specifications. That’s known to have a correction of deficiencies clause. It is in fact holding back 20 percent of the agreed-to price for those initial 19 copies.

It’s not perfect. For instance, GAO wishes the Air Force had tied progress payments to performance, rather than incurred costs. The government isn’t free of risk.

The famed Paris Air Show starts today. Boeing, a company with more than a couple of headaches, will be showing several products. Those don’t include the troubled 737 MAX, which the company is still working to get re-certified. But it will be showing the Pegasus, as the KC-46 is also called. Pegasus was a white flying horse, not a white elephant.

Development of a machine like a brand new tanker is a dizzyingly complex engineering and managerial challenge. But given the numbers, and the ultimate capabilities of the plane, it’s a relatively good procurement tale.

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