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AF would protect tanker contract 'no matter what'


If given the choice, the Air Force would protect the KC-46 tanker fixed price contract over other modernization priorities, the Air Force's top acquisition officer said Tuesday.

Air Force leaders have celebrated the fixed price development contract the service landed with Boeing for its KC-46 tanker. However, those same leaders have said that sequestration and the continuing resolution puts that contract in danger.

Without the appropriate funding levels, the Air Force would potentially have to renegotiate the contract and there are no guarantees Boeing would again agree to a fixed price deal. The fixed price portion of the contract is key because it stipulates that any increases in costs are funded by the contractor, not the government.

Just like sequestration, an extension of the continuing resolution would put the tanker contract in danger, explained Lt. Gen. Charles Davis, the Air Force military deputy for acquisition. He spoke Tuesday at the defense conference in Washington D.C. sponsored by Credit Suisse and McAleese and Associates.

The continuing resolution freezes appropriations to 2012 levels. In 2013, the Air Force is slated to pay $1.8 billion toward the tanker -- a considerable boost to the $870 million it paid in 2012. If Congress can not agree to a federal budget for the remainder of 2013 and the continuing resolution is extended, the Air Force will not be able to pay the $1.8 billion that Boeing is due.

The House of Representatives has issued a budget that includes defense appropriations for 2013, but those budgets have been shot down in the Senate before. Davis said having the appropriations would give the Air Force and the other services a data point in which they could have flexibility to protect certain programs.

Even if sequestration is not averted, eliminating the continuing resolution would provide the Defense Department additional funding and flexibility.

"Once you give them just one data point in the equation, they can do some very miraculous things on a case-by-case basis, but they need to know what that data point is," Davis said.

With that data point, Davis said Air Force acquisition officials would protect the tanker "no matter what."

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