WASHINGTON — The $44 billion KC-46 program is at risk of further schedule delays, the Government Accountability Office stated in a new report.
KC-46A manufacturer Boeing has struggled to meet key milestones throughout the duration of the program and is already at least one year behind by most measures. The company faces an uphill battle to keep the program on time, even as it continues to meet cost and performance goals, the GAO said.
The most important deadline on the horizon is the October 2018 target date for “required assets available,” which contractually binds Boeing to deliver the first 18 tankers and nine aerial refueling pods. The company has already slipped too far behind to meet its initial August 2017 benchmark.
Because of delays, Boeing will have to compress its original delivery timeline for those 18 aircraft from 14 months to 6 months.
“This delivery period assumes Boeing will deliver 3 aircraft per month, a greater pace than planned during full rate production,” the report stated. Twelve of those aircraft are already over 70 percent complete, GAO adds, but the company is far from being in the clear.
Two major challenges stand in the way. First, Boeing may not be able to conduct an electromagnetic effects test scheduled for May 2017. The test, which is held at a specialized facility, will evaluate whether the KC-46 creates any electromagnetic interference. However, because the Federal Aviation Administration has yet to approve the aircraft’s aerial refueling pod design, the Air Force will have to decide whether to test the aircraft and pods separately or risk pushing the test to a later date.
GAO also has questions about whether Boeing can finish developmental flight tests as quick as it plans, noting that the company “is projecting that it can complete test points … at a rate higher than it has been able to demonstrate consistently.”
Boeing must finish an average 1,713 test points per month to enable the first aircraft deliveries in September 2017, but it has exceeded that number only once, when it completed 2,240 test points in October 2016, the report said. When looking at data from March 2016 to January 2017, the agency found Boeing’s average completion rate was about 800 test points per month.
By other benchmarks, the program is performing admirably. For instance, the aircraft is meeting its performance goals, and costs are lower than expected — a feature virtually unheard of in major defense programs. The GAO notes that the KC-46 program’s total estimated acquisition cost has dropped by about $7.3 billion since the initial estimate, a 14 percent decrease.
Much of that success can be attributed to the fact that there have been no alterations to the tanker’s requirements and few engineering changes, the agency stated. But another key factor is the Air Force’s fixed-price contract with Boeing, which holds the company responsible for cost growth. Boeing has already paid more than $2 billion for overruns.
But during an earnings call earlier this year, Boeing CEO Dennis Muilenburg struck an optimistic tone on the program.
“While we still have flight testing to go, it’s very clear now that we’re not discovering new testing risks,” he said. “It’s now about getting the first 18 aircraft delivered.”
The KC-46 program was approved for low-rate, initial production in August, about a year later than expected. Boeing plans to deliver the first tanker this year.