WASHINGTON — Boeing could deliver the first VC-25B Air Force One replacement in 2025, a year later than originally anticipated, a top Air Force acquisition official said Tuesday.
The Air Force is currently assessing a revised plan proposed by Boeing after the company fell behind schedule building two new presidential transport aircraft, said Darlene Costello, principal deputy assistant secretary for Air Force acquisition.
The service and Boeing could also negotiate raising the ceiling on the $3.9 billion fixed-price contract the parties agreed to in 2018, due to unforeseen costs created during the COVID-19 pandemic and its impact on the airline industry, she said.
“Boeing has informed us that they believe it will be a 12 month [delay] beyond their original schedule. That doesn’t mean that we agree with that yet,” Costello told lawmakers at a House Armed Services seapower and projection forces subcommittee hearing. “Our program team is looking at what they have assumed in their schedule and is doing … a schedule risk assessment.”
The service plans on finalizing all changes to the VC-25B schedule by September.
“I wouldn’t expect that [delay] to be more than what Boeing is saying,” Costello said, adding that the service could need to add another maintenance cycle to keep the two legacy VC-25A aircraft operational until the VC-25B is delivered and operational.
As part of the Air Force’s assessment, the service will evaluate what Boeing has said is the root cause of the delays: the impact of the COVID-19 pandemic, as well as the bankruptcy of GDC Technics, which was under contract to create the VC-25B interiors.
Boeing canceled its contract and filed suit against Texas-based GDC Technics in April, alleging that the company had fallen more than a year behind schedule on designing the VC-25B interiors. GDC then countersued Boeing, claiming that Boeing had mismanaged the program.
In May, Lt. Gen. Duke Richardson, the military deputy for the Air Force’s acquisition enterprise, said that Boeing had identified a supplier to continue work on the VC-25B interiors.
Boeing has also filed an intent letter to the Defense Department for a “request for equitable adjustment,” which lays out the financial impact COVID-19 has had on Boeing’s work on the program, Costello said. That letter will pave the way for negotiations with the service about whether to raise the ceiling on the contract.
“We have had a couple of those [letters] come in at a smaller level on some other programs,” she said. “Typically they have been much, much smaller.”
It’s unclear how negotiations would impact the total price of the VC-25B program, which was estimated to clear $5.3 billion when including ancillary costs such as new hangars and revised technical materials.
The $3.9 billion firm, fixed-price contract includes the cost of two Boeing 747 airliners—which were previously built for a now-bankrupt Russian airline that never accepted the planes—as well as all of the engineering, manufacturing and development work needed to modify the aircraft with defensive systems, sensors, and communications gear meant to turn them into a flying White House.
Boeing began modifying the two 747s slated to become VC-25Bs in February 2020 at its facility in San Antonio. The company has declared $486 million in losses on the program, which it attributed to the pandemic.
The VC-25B program received $799 million in fiscal 2021. For FY22, the Air Force requested $681 million.