KC-135: Old as the hills…
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DID’s FOCUS articles cover major weapons acquisition programs – and no program is more important to the USAF than its aerial tanker fleet renewal. In January 2007, the big question was whether there would be a competition for the USA’s KC-X proposal, covering 175 production aircraft and 4 test platforms. The total cost is now estimated at $52 billion, but America’s aerial tanker fleet demands new planes to replace its KC-135s, whose most recent new delivery was in 1965. Otherwise, unpredictable age or fatigue issues, like the ones that grounded its F-15A-D fighters in 2008, could ground its aerial tankers – and with them, a substantial slice of the USA’s total airpower.

KC-Y and KC-Z buys are supposed to follow in subsequent decades, in order to replace 530 (195 active; ANG 251; Reserve 84) active tankers, as well as the USAF’s 59 heavy KC-10 tankers that were delivered from 1979-1987. Then again, fiscal and demographic realities may mean that the 179 plane KC-X buy is “it” for the USAF. Either way, the stakes were huge for all concerned.

In the end, it was Team Boeing’s KC-767 NexGen/ KC-46A (767 derivative) vs. EADS North America’s KC-45A (Airbus KC-30/A330-200 derivative), both within the Pentagon and in the halls of Congress. The financial and employment stakes guaranteed a huge political fight no matter which side won. After Airbus won in 2008, that fight ended up sinking and restarting the entire program. Three years later, Boeing won the recompete. Now, they have to deliver.

KC-X: The Program

A March 2012 GAO report summed up the risk driving the KC-46A program, and the current state of the USAF’s tanker fleets:

“According to the Air Force, the national security strategy cannot be executed without aerial refueling… the KC-135 Stratotanker, is over 50 years old on average and costing increasingly more to maintain and support. With… more than 16,000 flight hours on each aircraft, the KC-135s will approach over 80 years of age when the fleet is retired as projected in the 2040 time frame. In 1981, the Air Force began supplementing its fleet of KC-135s with [59] KC-10s… that transport air cargo and provide refueling. Much larger than the KC-135, the KC-10 provides both boom and hose and drogue refueling capabilities[Footnote 4] on the same flight and can conduct transoceanic missions. The KC-10s now average about 27 years of age with more than 26,000 flight hours on each, and their service life is expected to end around 2045.”

The $7.2 billion October 2012 development cost estimate includes $4.9 billion for the aircraft development contract and 4 test aircraft, $0.3 billion for the aircrew and maintenance training systems, and $2 billion for other government costs and some risk funds. The total procurement cost estimate of $40.4 billion buys 175 production aircraft, initial spares, and other support items as priced in contract options.

The KC-X Competitions

“US Debating Aerial Tanker Types, Mix” offers in-depth coverage of the lead-up to the KC-X RFP, explaining many of the military & policy issues in play as the USA contemplates its own choices. Then came the contractor decisions, and responses. What would Boeing propose? The KC-767, the KC-777, or both? Would Northrop and EADS elect to play, bringing their Airbus KC-30/A330 MRTT?

In the end, Round 1 was Team Boeing’s KC-767 Advanced (767-200 derivative) vs. Team Northrop Grumman’s victorious KC-30B (Airbus A330-200 derivative). Each aircraft system has its strengths, and each system also had risk factors as lobbying continued right down to the wire. Boeing claimed lower KC-767 operating costs, and received a union endorsement. EADS promised to open production of A330F civilian jets in the USA if it won.

The Airbus A330 MRTT was picked as the “KC-45A”, but an explosive GAO decision brought the competition to a halt.

USAF articles took pains to emphasize that: “…the department has gone through a rigorous review process for KC-X and has validated that the RFP accurately reflects the requirements as laid out by the warfighter… The RFP includes specific factors for assessing the capability contribution of each offeror” along a set of 9 weighted performance parameters.

That did not stop the contract protests, of course, and subsequent revelations that the USAF had not even followed its own guidelines destroyed the decision.

The clock ran out on the Bush administration’s tenure, and Secretary of Defense Gates decided to give his new employers in the Obama administration an opportunity to chart their own course on this issue. The KC-X v1.0 competition was canceled. A v2.0 RFP was released in February 2010, but the decision took until February 2011.

Boeing’s 767-based “KC-46A” won that competition, and the way they did it was simple: they underbid on a fixed-price contract by several hundred million dollars below cost. In exchange, they avoided a dent in their prestige, kept their 767 production line open, opened the door to more KC-767 exports, ensured a lucrative stream of future “KC-46A” maintenance revenue, and prevented Airbus from gaining a major industrial foothold in the USA.

The KC-46A Development Phase

The Pentagon’s latest Selected Acquisition Report estimates a total KC-46A development cost of $5.615 billion, which would actually be $1.221 billion over the KC-X EMD phase’s original Target Cost of $4.394 billion. Fortunately for the USAF, they structured the contract so they can’t pay more than $4.7 billion, and the overall bid cost to the US government for development plus production remains below Airbus’ bid.

Here’s how it works:

Up to the $4.898 billion ceiling, the contract split for amounts over $4.394 billion is 60/40. The difference is $504 million, so the government pays about $302.4 million more ($4.696 billion total), and Boeing pays about $201.6 million.

Costs above the $4.898 billion ceiling are all Boeing’s responsibility.

Current estimates show that there’s almost no chance of coming in under the ceiling. Boeing’s current cost estimate is $5.164 billion, which would raise its private liability for the cost increases to $467.5 million (201.6 + all 265.9 over the ceiling). If the government program manager is right, Boeing’s liability rises to $918.6 million (201.6 + all 717 overage). The difference matters to Boeing, but the Pentagon doesn’t have to care which EMD Phase figure is correct, or how much higher EMD costs go. Their costs are set, at $4.7 billion.

That’s if, and only if, the USAF doesn’t start asking for design changes. If they do, that would trigger a cycle of charges over and above the agreed contract.

As of December 2012, schedule planning for KC-X looks like this:

Concurrence concerns

The USAF has maintained its Q4 FY 2015 (fall 2014) goal for a successful Operational Assessment and Milestone C decision, and this remains the official target as of April 2013. That would clear the way for 2 firm-fixed-price Low-Rate Initial Production (LRIP) lots to deliver the initial 19 test aircraft.

Successful Initial Operational Test and Evaluation (IOT&E) from Q3 FY 2016 – Q1 2017 will launch Full-Rate Production options beginning in FY 2017, as a firm-fixed-price contract with some adjustments for outside circumstances, and a not-to-exceed cap. The USAF will be assessing the possibility of breaking out the engines as a separate government procurement in FRP, instead of having Boeing provide them.

Initial Operational Capability (IOC) is due in August 2017, with Full Operational Capability (FOC) expected by August 2019.

Those dates are somewhat problematic for export orders, because the USAF will be Boeing’s sole focus until the eMD Phase is done in 2017 – or later. Countries that need aerial tankers before 2019-2020 will need to look elsewhere. As of June 2013, Boeing was pursuing prospects for up to 20 aerial tanker exports.

The KC-46A Production Phase

The current program calls for Boeing to begin delivering KC-46As to the USAF by 2015. Unfortunately, the KC-46A is too different from previous KC-767A models sold to Japan and Italy, so it will need its own development, testing, and certification time. That’s why Airbus and program skeptics have always doubted that Boeing could deliver 18 certified, fully developed and tested planes by 2017. Boeing disputes this, but the Pentagon’s own DOT&E office added weight to those concerns in its 2011 reports, which declared the KC-46A’s test program “not executable.”

Beyond basic integration and certification considerations, a March 2012 GAO report cites 6 key technical risks to the program:

1. Weight limits. The KC-46A is close to its limit, and any more growth will start to take away fuel capacity, while increasing fuel burn rate.

2. New wing refueling pods. The KC-46′s pods will be redesigned to reduce buffeting of the aircraft’s wing, and changes to the way the refueling hose exits the pod.

3. 3-D display for the boom operator.

4. Threat Correlation Software. Used to help plot safe routes, along with the

5. ESTAR software.

6. ALR-69 Radar Warning Receiver integration. Issues like figuring out precise placement, and antenna design, make fitting a large aircraft more challenging than many people expect.

Problems with these or other systems could delay the program, and some of these issues could also make certification harder or longer. Fortunately, plotting even a 3-year production delay against planned deliveries and KC-135 retirements never drops the medium tanker fleet much below present levels. The initial drop is slight, and the same final figure is reached in 2030 instead of 2027. On the other hand, RAND’s 2006 Analysis of Alternatives for KC-X highlighted a very different risk, which needs to be understood:

“The current (December 2005) assessment of the flight-hour life of the KC-135 fleet and the expected future flying-hour programs together imply that these aircraft can operate into the 16 2040s. It cannot be said with high confidence that this is not the case, although there are risks associated with a fleet whose age is in the 80- to 90-year range. It can also not be said with high confidence that the current fleet can indeed operate into the 2040s without major cost increases or operational shortfalls, up to and including grounding of large parts of the fleet for substantial lengths of time, due to currently unknown technical problems that may arise. The nation does not currently have sufficient knowledge about the state of the KC-135 fleet to project its technical condition over the next several decades with high confidence.”

In English, nobody knows if an airplane fleet that’s already 50 years old will remain safe, or avoid unforeseen mechanical or structural problems, because there’s no previous example of what they’re trying to do. Those kinds of sudden “age-out” problems recently grounded the USAF’s F-15A-D fleet for several months, and led to the unexpected need to retire almost 1/4 of the fleet. If anything similar happens to the KC-135, the USAF’s planned number of aerial tankers may not resemble its actual future fleet.

This is exactly why the KC-X program has been the USAF’s #1 priority. On the other hand, it’s an equally good reason not to trust the USAF’s own rosy projections for its future fleet size. The graph below shows how this kind of scenario could play out. In DID’s hypothetical example, we use actual data to the present day, plus all planned reductions in the USAF’s 2011 plan. Fleet problems lead to the forced retirement of 1/3 of the remaining fleet in 2021 over safety and cost-to-fix issues, followed by a second mechanical issue or budget crisis that grounds another 55 planes in 2029. The USA’s looming fiscal entitlements crisis will begin to bite in earnest post-2020, and the pattern of cuts in the USA and in other countries shows a marked tendency to simply retire platforms with significant maintenance costs. KC-135 per-hour flight costs are already increasing, and a fleet that also needed expensive refits or fixes would be a prime target for future cuts. Here’s what it looks like:

Finally, DID believes that there will be no KC-Y or KC-Z, so the timing of KC-135 problems and retirements isn’t critical. Any serious problems in the KC-135 fleet could create a similar end-point, even if they happened after 2030.

Boeing’s KC-46A, and Its Team

KC-46A & B-1B
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There are still a number of things we don’t know about Boeing’s KC-46A, though more details have emerged since Boeing won the competition. Its base airframe is a 767-2C freighter, which has added a flight deck derived from the Boeing 787. Boeing’s refueling boom is derived from the KC-10′s AARB, but adds 3-D viewing and a slightly higher fuel offload rate of 1,200 gallons/min.

Pratt & Whitney’s 62,000 pound thrust PW4062s remain their engine choice, but the centerline and wing-mounted refueling pods will now come from Cobham plc’s Sargent Fletcher, who was also partnered with Airbus for this feature. Unlike the A330 MRTT’s systems, however, the KC-46A’s wing refueling pods still need to finish testing on the 776-2C. The USAF will buy 46 wing sets for its fleet, which will allow multi-aircraft (multipoint) aerial refueling when installed.

Cargo capacity lists as 65,000 pounds, in a mix of up to 18 cargo pallets, 114 passengers, and/or 58 medical stretcher slots.

Fielding a tanker built after the 1960s allows the USAF to include a number of new systems, which would be too costly to retrofit into the existing KC-135 fleet. The net effect is to make its KC-46As front-line refuelers. The cockpit and exterior lighting are night-vision compatible for covert rendezvous. Advanced communications and secure datalinks are big steps forward for the fleet, and their classified feeds will be used by specialized ESTAR and TCS systems designed to route the tanker away from threats. NBC(nuclear, biological, chemical) protection will allow the planes to operate in contaminated environments, while EMP hardening reduces the effects of high-frequency radiation bursts on all those new solid-state electronics. On a more prosaic level, radar warning systems, infrared defensive systems, cockpit armor, and fuel tank ballistic protection will all be welcome.

Boeing’s industrial team has slowly announced itself over many months since the award. American KC-46A content has been touted as high as 85%, with British firms picking up much of the balance. Boeing reportedly looked hard for supply chain savings in Round 2, though, in order to lose less money with its under-cost bidding strategy:

Production takes place in 2 phases: the 767-2C, and then the militarized KC-46A modifications.

Boeing’s KC-X 1.0 Team

That KC-46A design is a big change from KC-X round 1, whose KC-767 Advanced used a 767-200ER fuselage; a 767-300F freighter wing, landing gear, cargo door and floor; and a 767-400ER’s flaps and flight deck (derived in turn from the 777). A new design fly-by-wire boom with remote viewing would expand the tanker’s effective refueling airspace, and offload more fuel. Engines would be 2 Pratt & Whitney PW4062s, with 62,000 pounds of thrust each, instead of the KC-767A/J’s 60,200 pound CF6-80C2s.

Some of the suppliers also changed, as Boeing progressed from the canceled KC-767 lease deal, to KC-X, to its final design in Round 2:

Boeing’s production line had also progressed. Near the end of the KC-X bidding, Boeing added civilian 767 orders to keep its production line going. That was enough to create a cushion if KC-X faced further challenges and issues, but the reality is that civilian 767 production looks set to end soon. The US military will become the 767 production line’s sole support in the very near future.

Once the KC-46As enter service, they will join Italy’s KC-767A (4) and Japan’s KC-767J (4) small KC-767 fleets. Both customers have experienced long delivery delays while Boeing has worked to iron out technical problems, and their KC-767s will have a number of key differences from the KC-46A. Japan’s boom-equipped KC-767s were delivered form 2008-2010, but Italy’s aircraft with hose-and-drogue systems were only accepted in February 2011, after long delays.

The American order may make further 767 tanker exports difficult for Boeing in the near term, because of the amount of attention and production commitment KC-46A requires. Boeing declined to bid on India’s aerial tanker RFP, for instance and hasn’t yet formally committed to Singapore’s. There’s also a customer commitment issue. Should they accept the KC-767A, which is certified and in service, or ask customers to wait for the KC-46A, and hope it’s on time?

Airbus sees this lock-up as an opportunity to add to its A330 MRTT customer list, of course. Ironically, the other big beneficiary may by Israel’s IAI Bedek, whose inexpensive KC-767 MMTT conversion of used Boeing freighters already has customers in Colombia and Brazil.

KC-X: Contracts & Key Developments

FY 2013

Design finalized after CDR; State of the program reports; Sequester threat; Basing competition; Training aids picked.

KC-46A and B-2
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Sept 4/13: Boeing announces that the USAF has validated the final design elements of the KC-46A, concluded that it meets requirements, and frozen the plane’s configuration. That clears the way for production and testing.

Design is set.

Aug 7/13: South Korea. Yonhap reports that South Korea may acquire 4 aerial refueling tankers by 2019. It seems to be at the discussion level rather than a firm decision. If it proceeds, Boeing’s KC-46A and Airbus Military’s A330 MRTT are seen as the logical contenders, and the 2019 date makes the KC-767 a viable possibility.

The A33′s challenge is that, unlike Australia, South Korea’s zone of action doesn’t really need the A330′s range and size. That will make the extra expense problematic. It’s also worth noting that South Korea already has significant defense relationships with Israel’s IAI. That could create an opening for IAI’s much cheaper K-767 MMTT option, which is also on offer to Singapore. Sources: Yonhap News, “Air Force to acquire 4 aerial refueling tankers by 2019″.

July 10/13: CDR. KC-46A Weapon System Critical Design Review takes place, and is successful. Source: Boeing, Sept 4/13 release.


July 3/13: Sub-contractors. Fleet Canada Inc. in Fort Erie, ON receives its 1st order from Boeing, for sub-assemblies of the KC-46A Camera and Boom Fairings. The contract is issued as part of Boeing’s industrial offset requirements for various Canadian defense buys, including the C-17A airlifter and CH-47F Chinook helicopter. Fleet Canada.

June 26/13: production. Boeing announces that production of the first aircraft has begun.

The Air Force’s Critical Design Review (CDR) will start in July 2013, as announced last year. Beyond that, the company is forecasting the following milestones:

First aircraft assembly: Nov. 2013-January 2014

First flight: 2015

First delivery: 2016

Delivery of the first 18 aircraft by August 2017

June 16/13: Exports. Boeing told reporters that Boeing is engaged in talks with several export prospects in Asia and the Middle East, for a total of 20 potential units. The company’s defense and civilian arms are working together to be able to make the aircraft available for sales abroad by 2017. Bloomberg | DoD Buzz.

May 31/13: Certification process. Boeing will seek FAA certification in 2 phases: first there is one for the commercial 767-2C aircraft, then a supplemental one for the military modifications to the commercial aircraft. In March 2012 the GAO had listed as a risk factor the fact that Boeing planned to pursue some parts of these 2 certifications in parallel. John Howitt, the program deputy manager, told AIN that this is addressed with joint technical planning and work, even though the 2 certifications are separate from an administrative perspective.

May 1/13: Berkshire Hathaway company FlightSafety Services Corp. in Centennial, CO wins a $78.4 million fixed-price-incentive-firm and firm-fixed-price contract to design, develop, and build the KC-46 aircrew training system, including delivery of courseware and simulator-based training systems. FlightSafety will design and manufacture the KC-46, Boom Operator, and Part Task Trainers at its 375,000 square foot simulation facility in Oklahoma; the first device is scheduled for delivery in February 2016.

FlightSafety is no newcomer to this role, with operations at 15 U.S. Military bases that include Flight School XXI; Training systems for the KC-10 Extender, C-5 Galaxy, C-17 Globemaster, AFSOC’s HC-130P Combat King, and the V-22 Osprey tiltrotors; and Contractor Logistics Support for the T-6 JPATS and T- 37/38 trainers. The KC-46A contract pays $1 million initially, with the rest to be paid over time, including additional production and operations options that could raise its value beyond $78.4 million. Warren Buffett will be glad to hear that.

Work will be performed at Broken Arrow, OK and St. Louis, MO and is expected to be complete by 2026 if all options are exercised. This award is the result of a competitive acquisition, with 5 offers received by USAF Life Cycle Management Center/WNSK’s Simulators Division (FA8621-13-C-6247). See also USAF | FlightSafety International.

April 17/13: Sub-contractors. ITT Exelis announces a contract from Raytheon Company (NYSE: RTN) to supply its anti-jam N79 CRPA (Controlled Reception Pattern Antenna) GPS antennas, for use with Raytheon Navshield and Advanced Digital Antenna Production equipment on the KC-46A. Work will be performed in Bohemia, NY.

April 13/13: Restructure at peril. USAF AMC commander Gen. Paul J. Selva reiterates the KC-46A’s #1 priority status for the Air Force, and warns about the effects of restructuring this contract:

“…because we have a firm fixed-price contract for the development of that airplane, if we allow ourselves to get into the position where we don’t have the funds to pay for the initial development of the airplane, that contract gets reopened…. We’ll pay more…”

Probably. Boeing bid hundreds of millions of dollars below development cost to win KC-X, but 2 years into the contract, the US military’s ability to switch to Airbus is more limited. They’d have to delay their #1 priority program, while creating a lot of opposition in Congress. There are creative ways to charge more in total, and Boeing would be well placed to negotiate a few in any restructuring.

April 10/13: FY 2014 Budget. The President releases a proposed budget at last, the latest in modern memory. The Senate and House were already working on budgets in his absence, but the Pentagon’s submission is actually important to proceedings going forward. See ongoing DID coverage. For KC-X, it’s pretty much steady as she goes, hewing more or less to previous plans.

Total reductions from FY 2014-2017 are around $182 million compared to FY 2013 plans, but a fixed-price contract is going to have to reach the agreed total regardless. Current budgets show just $3.173 billion allocated for RDT&E from FY 2011 – 2018, but the USAF is near-certain to owe $4.7 billion for the EMD phase.

April 7-10/13: Basing. As the USAF prepares to make decisions about where to base its KC-46s, communities are competing. The catch is that there are really 2 initial competitions, and they’re mutually exclusive (q.v. Jan 9/13 entry). Grand Forks Herald | Lawton Constitution | Wichita Eagle.

Feb 27/13: GAO Report. The GAO’s annual in-depth look at the KC-46 program is out. The good news is that after 28% ($1.4 billion) in development work, the program costs and schedule haven’t changed much. The CDR is still scheduled for July 2013, albeit with some risks. The USAF and Boeing are evaluated as managing the project well, and have added the ability to track progress toward key aircraft performance goals.

Concerns fall into 3 areas: financial reserves, weight, and software. The GAO is one of several agencies that think flight testing and certification will need to take about 6 months longer, and the boom refueling system is changing a bit, but those are secondary risks right now.

The development contract set aside about 7% ($354 million) in reserves, and 2 years into a 7-year development program, 79.6% of those reserves have been spent, leaving less than $72 million to cover an expected $3.5 billion in work. Some of the issues driving this spending aren’t resolved yet. As we explained above, the government’s costs won’t change if this problem isn’t solved, but GAO is worried about technical problems growing and creating schedule issues.

Projected weight is now expected to exceed the KC-46′s target weight, and each pound above target reduces fuel payload by 1 pound. Extra weight could also affect operating requirements for takeoff, mission radius, and landing. The program has a mitigation strategy in place, and further weight reduction initiatives can create tradeoffs in areas like durability and cost.

Software is a good news/bad news story. They’ve cut total software development by 40%, but code reuse will be less than planned (52% vs. 76%), which means new and modified software has doubled to 48% from 24%. That means more work overall and more testing, though program officials are claiming that schedules won’t be affected.

Feb 22/13: KC-135Rs retiring. After more than 50 years of service and 22,500 flying hours, the 1st operational re-engined KC-135R Stratotanker retires from service, and heads to AMARG’s “boneyard” at Davis-Monthan AFB, AZ. KC-135R #61-0312 first flew as a KC-135A on Aug 14/62, and was re-engined into a KC-135R on June 27/85.

The retirement is budget-driven as 1 of the 16 scheduled KC-135 retirements in FY 2013. On the other hand, the KC-135 Program Office at Tinker AFB, OK used the Fleet Health Analysis Tool to pick the aircraft. Joey Dauzat, 97th Maintenance Directorate KC-135R sortie generation flight chief, discusses KC-135 usage patterns, which will become much more relevant if something happens to the KC-X program:

“[KC-135Rs] assigned to Altus Air Force Base fly approximately 1,820 sorties per fiscal year, which averages out to 91 sorties per aircraft…. Flight hours are approximately 7,030 hours per fiscal year, which averages out to 351 flight hours per aircraft. All sorties are required to have [refueling booms] on them, so every sortie flown is a boomer training sortie.”

Feb 2/13: A USAF presentation to Congress says that if sequestration takes effect, the KC-46A program may need to be restructured, along with the F-35 fighter and MQ-9 Reaper Block 5. Flight International.

Feb 2/13: High Usage. The USAF is planning to use KC-46As more intensively than their KC-135 counterparts. That makes sense on several levels: (1) As a way to save money by flying the more expensive-to-operate KC-135s less; (2) As a way to build in surge capability for the KC-46As if the KC-135 fleet has a problem; and (3) As a pre-conscious recognition that KC-X is probably the USAF’s entire future aerial tanker fleet.

The KC-135′s average of 2.5 aircrews per plane will rise to 3.5 aircrews for the KC-46A, adding about 60 full aircrews to the force, and costing about 11.2% more for KC-46A lifetime operations and maintenance because they will be flying more often. Total operations and support costs are now predicted to be approximately $103 billion, but the $10 billion or so rise would be offset by any savings from fewer flights of the more expensive KC-135Rs. USAF.

Higher usage planned

Jan 17/13: DOT&E testing. The Pentagon releases the FY 2012 Annual Report from its Office of the Director, Operational Test & Evaluation (DOT&E). The USAF has bought 2 767-200s for live fire testing, and is planning the survivability assessment, including LAIRCM tests. They do have one major concern:

“The ALR-69A RWR [radar warning receiver] was selected as Contractor Furnished Equipment by Boeing; however, integration and performance on the KC-46A are high risk. DOT&E recently completed an assessment of the ALR-69A RWR on the C-130H1 and assessed it as not effective, but suitable, in a separate classified report dated October 22, 2012. Not only do these effectiveness problems require correction, but the system is required to improve its geo-location capabilities as compared to the demonstrated C-130J capability.”

DOT&E also has some technical issues with the overall testing plan. The 750 hours of operational testing over 5.5 months can establish effectiveness, but getting 76% confidence of suitability (maintainability) would need 1,250 hours. This was also pointed out in last year’s report, and it will need to be worked out one way or another.

Jan 9/13: Basing. The USAF announces KC-46A initial basing candidates, while stressing that losing bases will continue to operate KC-135s. The USAF doesn’t mention this, but the FTU and MOB1 awards are mutually exclusive: you can win one, but not both. There’s no overlap with MOB2 anyway, so that takes care of itself. Candidates include:

Formal Training Unit: Altus AFB, OK vs. McConnell AFB, KS. Altus already performs the FTU role for the KC-135. Winner begins receiving planes in 2016.

Active Duty Main Operating Base (MOB 1): One of Altus AFB, OK (KC-135 FTU); Fairchild AFB, WA (2 KC-135 squadrons resident); Grand Forks AFB, ND (1 KC-135 squadron resident), and McConnell AFB, KS (4 KC-135 squadrons resident). Winner begins receiving planes in 2016.

Air National Guard MOB 2: One of Forbes Air Guard Station, KS; Joint-Base McGuire-Dix-Lakehurst, NJ, Pease Air Guard Station, NH; Pittsburgh International Airport Air Guard Station, PA; and Rickenbacker Air Guard Station, OH. Winner begins receiving planes in 2018.

Oct 16/12: Industrial. Boeing opens the KC-46 Boom Assembly Center on schedule at Boeing Field in Seattle, WA. Boom assembly marks the program’s shift to production from design activities, and the 1st fly-by-wire boom is scheduled to enter testing during Q3 2013 at Boeing Field’s System Integration Labs. Boeing.

FY 2012

Basing plans; Preliminary Design Review; Industrial decisions.

‘Paper airplane’ risks?
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Sept 12/12: Industrial. Boeing opens System Integration Lab 0 at Boeing Field, 3 weeks ahead of schedule. SIL 0 will be used to test commercial avionics and software for integration into the KC-46A Tanker. Another 3 SILs will open at Boeing Field and a 5th will open in Everett, WA by the end of 2013.

Boeing Field is also slated to house the program’s Boom Assembly Center, and the Finishing Center. The Finishing Center is scheduled to open in late 2013, and will be used to install military hardware and software onto the commercial 767-2C airframe. Boeing.

July 27/12: Sub-contractors. Eaton Corp. announces a supplementary contract from Boeing, which adds the aerial refueling pump system, the aerial refueling boom nozzle, and various airframe and aerial refueling system valves and fuel/ actuation components. See also June 18/11 entry.

June 13/12: Industrial. Boeing VP and KC-46 program manager Maureen Dougherty talks about moves Boeing is making since the announcement that it was closing the Wichita, KS facility. That closure creates added risk, but Boeing is sticking to its estimates and trying to offset it.

Three systems integration laboratories (SILs) will be located at Boeing Field in the southern part of Seattle, WA, but they won’t be operational until fall 2012. Flight testing, a full lab replica of the entire KC-46 fuel architecture, and the finishing center’s 2 workstations will also be there. They’ve also begun wind tunnel testing with Cobham regarding the shape of the plane’s refueling pods, a move that underlines the developmental nature of key items. Aviation Week.

May 14/12: Initial bases. The USAF decides that the KC-46A’s formal training unit (FTU) and first main operating base (MOB 1) will be led by active duty units, while MOB 2 will be led by an Air National Guard (ANG) unit. That may be one way to ease the transition. Many ANG pilots fly for commercial carriers, and many of those carriers already operate 767s.

Exact basing decisions will be based on location, capacity, environmental issues, and cost. The USAF plans to table a preferred base and shortlist for the active-duty FTU and MOB 1 in December 2012, so the environmental impact grind can begin and the base can begin receiving aircraft in FY 2016. The ANG-led MOB 2 is expected to get its preferred base and shortlist in spring 2013, and receive aircraft in FY 2018. USAF.

May 8/12: Sub-contractors. BAE Systems announces a contract from Boeing to develop and build the KC-46A’s Actuator Control Unit (ACU), which processes commands to control the aerial refueling boom.

Engineering and development work on the program will be conducted in Endicott, NY with manufacturing at the BAE Systems facility in Ft. Wayne, IN.

March 21 – April 27/12: PDR. Boeing’s KC-46 Tanker completes its Preliminary Design Review (PDR), confirming that it seems to meet system requirements and is ready to proceed with detailed design. In addition to the successful PDR, the Boeing KC-46 team has completed a System Requirements Review, Integrated Baseline Review, a PDR for the base 767-2C freighter, and Firm Configuration Reviews for the 767-2C and the KC-46A Tanker.

The program’s next major milestone is a Critical Design Review that will take place in the summer of 2013, and demonstrate that the KC-46A is ready for manufacture. Boeing.


March 27/12: Engine contract. Boeing formally signs a contract with Pratt & Whitney’s Military Engines division for up to 368 PW4062 engines (179 planes + 10 spares). It’s a private sub-contract, however, and the parties won’t discuss its value. Suffice to say that the cost of modern jet engines makes this a 10-figure contract, once all engines are ordered.

The 62,000 pound thrust PW4062 is the highest thrust model in Pratt & Whitney’s PW4000-94″ commercial engine family, which powers MD-11, early-model 747, and 767 aircraft. It’s offered for commercial freighter and military tanker applications. Pratt & Whitney.

March 26/12: GAO Report. The US GAO audit office releases report #GAO-12-366, “KC-46 Tanker Aircraft: Acquisition Plans Have Good Features but Contain Schedule Risk.” It cites “broad agreement that KC-46 schedule risk is a concern,” and especially cites overlap among development and production work. The USAF disagrees, citing FAA certification for the First Flight of the baseline 767-2C in June 2014, and promising 60% of FAA certification and military developmental flight testing before Milestone C production approval in August 2015. On the other hand, the GAO has usually been right about these risks, and the USAF has been wrong – most recently in the F-35 program.

Key information has been fed into other parts of this article, but this excerpt deserves especial attention:

“According to program officials, a change in system requirements, although unlikely… could increase the Air Force’s exposure to additional costs… the biggest risk to the KC-46 program is the Department’s ability to minimize changes to the contract… DOD has demonstrated limited ability to maintain stable requirements and limit changes to program technical baselines on previous complex weapon system programs, and that minimizing such change is essential to the success of the KC-46… any engineering or contract changes affecting system requirements or having the potential to impact program cost, schedule, and performance baselines must be approved by the Air Force Service Acquisition Executive in consultation with the Secretary and the Chief of Staff of the Air Force… Program officials maintain that… pricing will likely stay intact as long as the contract is not opened to negotiate modifications. [...]

Boeing has to correct any deficiencies in the KC-46 discovered during the development program… on the four development test aircraft and all production aircraft… at no additional cost to the government. In addition, there is a special contract provision that requires each aircraft to demonstrate a certain fuel usage rate before the government accepts the aircraft. If any aircraft burn fuel above this rate, Boeing is required to propose a corrective action at no cost… if Boeing cannot meet the required usage rates, there are contract provisions allowing for a decrease in the amount paid to Boeing.”

March 7/12: Air Mobility Command chief General Raymond Johns at a House Armed Services Committee hearing:

“We continue to execute the program to cost and schedule baselines we established, along with Boeing.”

A Preliminary Design Review is scheduled later this month. Bloomberg.

March 7/12: Basing plans. From the USAF’s FY 2013 Force Structure Changes [PDF]:

The Air Force is currently developing requirements for the first two KC-46 bases, and expects to approve basing criteria in Spring 2012, identify candidate installations in Summer 2012, select preferred and reasonable alternatives by the end of calendar year 2012, and make final decisions in 2013.”

The Air Force expects aircraft deliveries to these first 2 bases in FY16. The next round of basing decisions is planned for FY14 at the earliest.

Feb 13/12: RDT&E budget. The Air Force asks for $1.8 billion in RTDE funds for fiscal year 2013 as part of the President Budget. This would be the peak of planned research and development spending on the program over 2011-2017, at 27% of the total. Air Force budget justification [large PDF].

Air Mobility Command (AMC/CC) has not yet determined an Initial Operational Capability (IOC) date, while Full Operational Capability (FOC) is expected approximately 24 months after IOC. The Air Force schedule as of December 2011 plans to reach Milestone C in Q4 FY15. These plans have been incorporated into the program briefing, above. See next entry below on the various risk assessments made about that schedule.

Jan 17/12: DOT&E doubters. When Airbus lost the contract, they placed 2 markers. One was that Boeing couldn’t deliver to their claimed price, and that has proven true (vid. Nov 27/11 entry), though their bid remains lower than Airbus. The other was that Boeing wouldn’t be able to make the delivery schedule, and the US Defense Department’s Director of Operational Test and Evaluation’s FY 2011 Report adds weight to that belief. The report backs their position up with hard numbers, and bluntly concludes that “the KC-46 test program is not executable.”

To support that claim, DOT&E notes that military testing with past large aircraft averages under 30 flight hours per plane, per month. The Boeing/USAF TEMP schedule plans 42 FHPM, for flights that are “more specialized, higher risk, and more resource-intensive than FAA certification.” Worse, their planned 15% re-fly rate for military test items is even farther off; the 737-derivative P-8A, which is considered to be a successful program, has a current re-fly rate of 45%. Correcting to past averages adds 4 months to the 17-month testing schedule. DOT&E believes that even then, the 750 operational flight test hours aren’t enough, and 1,250 would be more realistic. That takes the testing schedule from 21 to 25 months.

Other serious omissions cited include no time for correction of discrepancies and/or deficiencies discovered during developmental testing, and no provision for the refueling boom control algorithm changes and/or procedural modifications that have been required for other new aerial refuelers. The report doesn’t say so, but the net takeaway is that Boeing is very likely to be late with its promised 2017 delivery. The USAF responded to Gannett’s Air Force Times with partial disagreement:

“The Air Force respects the opinions of the Office of the Director, Operational Test & Evaluation, but does not agree with its assessment that the KC-46 test program is ‘not executable’… The Air Force does acknowledge that Boeing’s overall KC-46 program schedule is considered medium risk, in part due to its aggressive flight-test schedule.”

Jan 4/12: Wichita lineman, farewell. Boeing confirmed it’s going to close its Wichita, KS plant by the end of 2013. Wichita is currently the base for the company’s Global Transport & Executive Systems business, and its B-52 and 767 International Tanker programs. The facility also provides support for flight mission planning and integrated logistics.

Some of the 2,160+ Wichita jobs will be moved; others will be cut, beginning in Q3 2012. The move rankles hard in Kansas, as Boeing touted the jobs and state economic benefits if they won the tanker contract, and secured hard lobbying from state and federal representatives. Who now feel somewhat betrayed. The company counters that it isn’t entirely betraying those promises, as it spent more than $3.2 billion with approximately 475 Kansas suppliers in 2011, making it the 4th largest state in Boeing’s supplier network. That prominence is not expected to change, and the 24 Kansas KC-46A suppliers will still be providing elements of the aircraft as originally planned.

Once the Wichita plant closes, engineering work on the KC-46A will be placed at the Boeing facility in Oklahoma City, OK, instead. Work to convert 767s to KC-46 tankers will now be performed right on the 767 production line in Puget Sound, WA, copying a model first used with the 737-derived P-8A Poseidon sea control aircraft. Future aircraft maintenance, modification and support work will be placed at the Boeing facility in San Antonio, TX, which currently handles KC-135 and KC-10 maintenance and upgrade work. Boeing | NY Times | Congressman Mike Pompeo [R-KS-4, not happy].

Boeing closing its Wichita plant

Nov 27/11: EMD Overage rises again? Maybe. Media reports tout a figure of $500 million over maximum cost, but a breakdown says otherwise. The Pentagon’s latest Selected Acquisition Report reportedly gives a program manager’s estimate of $5.3 billion, which would actually be $1.2 billion over the KC-X EMD phase’s original target cost. Up to $4.9 billion, however, the government pays $600 million more, and Boeing pays $400 million. Costs above that are all Boeing’s responsibility. Boeing’s current estimate is $5.1 billion, which would raise its liability to $600 million (400 + all 200 overage). If the government program manager is right, Boeing’s liability rises to $800 million (400 + all 400 overage), while its overall bid cost to the US government for development plus production remains below Airbus’.

The SAR report in question appears to be an advance copy, as there has been no public release yet. It allegedly says that KC-46A engineering, manufacturing and development are “progressing well with no significant technical issues.” Given the figures above, that must be a relief to Boeing’s management. As for the Pentagon, it doesn’t have to care which EMD Phase figure is correct, since their costs are now known: $4.5 billion ($3.9 billion + $600 million). Above $4.9 billion total split costs, they aren’t paying for anything, and the estimate spread shows that there’s almost no chance of coming in under $4.9 billion. Bloomberg News.

FY 2011

Boeing wins round 2. Interim baseline review. Suppliers and components.

KC-X options
(click to view full)

Sept 13/11: AmSafe Industries, Inc. announces that it will supply 9g-rated barrier nets, and stationary and movable smoke barriers, specifically designed for the USA’s new KC-46A 767 aerial tankers. AmSafe is a global leader in this sort of technology; they’re also known as the makers of Tarian cloth armor that can stop enemy rockets.

Deliveries of the KC-46A internal barrier systems are expected to begin in 2015, and could be worth more than $45 million for all 179 planned aircraft.

Sept 13/11: BAE Systems’ Attendant Control Panel (ACP) for Boeing’s new civilian 737 interior will be migrating to the KC-46A. The touch-screen, networkable panel is designed to control a variety of interior functions such as lighting, drinking water, and waste tanks. Prices were not revealed. Work on the KC-46A tanker touch-screen cabin control systems will be conducted in Johnson City, NY, and Fort Wayne, IN. BAE Systems.

September 2011: Vol. 16, #4 [PDF] of Rockwell Collins’ internal Horizons magazine, whose “Refueling Innovation” article discusses their development of the KC-46A’s flight controls and refueling systems.

The stereoscopic Remote Vision System, which will display the refueling operation on both standard and 3-D screens, apparently drew on internal experience that included the Mars Rover, UAVs, and a remotely-operated bomb-disposal robot. Overall, the article cites ruggedization of components, and information fusion from the wide array of sensors and datalinks, as the 2 key engineering challenges. TSAS, which emerged from the latter challenge, is even being tested on Android OS smartphones and tablet computers.

Aug 24/11: The U.S. Air Force completes an interim baseline review (IBR) for the KC-46A.

IBRs provide mutual understanding of risks inherent in contractors’ performance plans and management systems, and outline what resources are needed to achieve program goals. This IBR had to be complete within 7 months of contract award, which would be Sept 24/11. The next major milestone is the Critical Design Review, which is scheduled to happen by September 2013. Aviation Week.

July 14/11: Sen. John McCain [R-AZ], the ranking Republican on the Senate Armed Services Committee, sends a letter to the Pentagon that calls Boeing’s KC-X EMD bid “completely unacceptable”. His issue is that any increases between KC-X’s EMD target cost (revealed as $3.9 billion), and the $4.9 billion ceiling cost are split between Boeing (40%) and the USAF (60%). The net result is that Boeing’s lowball bid costs taxpayers an extra $600 million beyond their bid, and Boeing itself $700 million. Even that reported bid price still leaves Boeing lower than Airbus’ overall price, however, which was $2 billion higher for the combined EMD phase and subsequent production of 13 initial jets.

On the other hand, the practice of lowballing bids in order to secure contracts, then raising the real costs afterward, is correctly seen as toxic. The result is grave difficulty in budget planning, as other programs are sacrificed or compromised in order to pay for widespread overcharges.

In fairness to Boeing, it’s worth going back to the original contract bids. Reports right after the February 2011 award had EADS Airbus bidding $3.5 billion for the EMD phase, while Boeing had bid $4.4 billion for the EMD phase alone. That means the USAF knew of about $500 million beyond its target costs from the outset, for an aircraft that had not been fielded or tested yet, and involved more development work than EADS’ offering. That means added risk of future increases, but the swiftness of these cost revisions strongly suggests that they were known beforehand. Actual costs for Boeing’s EMD phase are currently $5.2 billion, and the amount of the cost breach tends to lower confidence in Boeing’s ability to meet the contract schedule, a point that was also raised by Airbus after the award.

The question is whether Sen. McCain’s opposition will have any effect at this point in time. That may seem unlikely, but then, it also seemed unlikely when he opposed the original KC-767 lease deal post-9/11. McCain release | Bloomberg.

June 24/11: Bloomberg reports that Boeing’s KC-X bid is going to be $300 million over the KC-X cost ceiling, which it reveals as $4.9 billion. Because it’s a fixed-price contract, Boeing is solely responsible for those extra costs.

According to Bloomberg, a USAF statement from Lt. Col. Jack Miller said that the USAF was told after the contract award that: “it proposed a ceiling price that is less than its actual projected cost to execute the contract… There is no legal barrier that prohibits pursuing a below-cost proposal strategy and Boeing’s met all rules.”

Recall that the Feb 24/11 contract award said only that Boeing’s Engineering & Manufacturing Development (EMD) phase contract was “over $3.5 billion.” Subsequent reports had Boeing’s EMD phase bid at $4.4 billion, vs. EADS Airbus’ $3.5 billion. On the other hand, the total bids for EMD + 4 planes, and another 14 planes of initial production, was reportedly $20.6 billion for Boeing, vs. $22.6 billion for Airbus – who called Boeing’s bid an “extreme lowball.” If Bloomberg’s report is true, we now have an idea what Boeing was willing to pay, in order to prevent Airbus from setting up a production line in America, and to keep the 767 alive as a military export and commercial option.

June 22/11: After months of refusing to divulge details, Boeing announces major suppliers for its KC-46A team, and confirms the tanker’s fuel capacity at 212,000 pounds, with an offload rate of 1,200 gallons per minute. The KC-46 Tanker team will include more than 800 suppliers in more than 40 states and support approximately 50,000 total U.S. jobs. Major suppliers have been added to the article’s industrial teams section.

June 19/11: Raytheon announces orders from Boeing supply digital radar warning receivers, and digital anti-jam GPS receivers, for the KC-46 tanker. Its AN/ALR-69A is an all-digital radar warning receiver designed to work with both fighters and large aircraft, and its technical architecture will speed up signal identification amidst cluttered environments.

The digital anti-jam GPS receiver, with its multielement controlled reception pattern antenna, integrates both reception and high performance digital anti-jam capabilities into a single product.

June 18/11: Sub-contractors. Eaton Corp. <a href="http://www.eaton.com/Eaton/OurCompany/NewsEvents/New

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