Saudi Sale

The Pentagon late this afternoon formally announced the award of an $11.4 billion foreign military sales contract to Boeing for 84 new F-15 fighter aircraft for Saudi Arabia. The agreement to sell the F-15s to the Saudi government was struck last December.

"This particular undefinitized contract action covers development efforts for the new aircraft and retrofit as well as procurement of the 84 new production aircraft," according to a Defense Department statement. "The locations of the performance are El Segundo, CA, Ocala, FL, and Cedar Rapids, Iowa. Work is expected to be completed October 2020. ASC/WWQ, Wright-Patterson Air Force Base, OH, is the contracting activity."

Last month, InsideDefense.com reported that DOD hopes to ratchet up foreign sales of U.S. weapons, seeking new deals that could advance numerous policy aims including higher procurement rates that would aid the U.S. military as it braces for a prolonged period of fiscal belt-tightening. Further:

Acting DOD acquisition chief Frank Kendall told Wall Street investors and defense industry executives that he is working with the Pentagon's top policy official -- who guides decisions about foreign military sales in cooperation with the State Department -- to find ways to facilitate more overseas deals.

"We've always been supportive of FMS but I think we can up our game a little bit," Kendall said at an aerospace and defense conference organized by Cowen and Company, an investment bank. "And maybe in some cases take a look at taking a little bit more risk then we've been willing to take in the past."

Government-to-government sales of U.S. military equipment totaled $28.3 billion in fiscal year 2011, with Afghanistan, Taiwan and India accounting for more than 50 percent of the total, according to the Defense Security Cooperation Agency, which manages foreign sales for the Pentagon (DefenseAlert, Dec. 5).

DSCA estimates it will secure foreign military sales worth $30.5 billion this fiscal year, which ends Sept. 30, a Pentagon official told InsideDefense.com today. If realized, that estimate would reflect a 2.1 percent increase over FY-11.

The $30.5 billion "baseline" forecast does not include the $29.3 billion sale to Saudi Arabia of F-15 fighters and combat helicopters finalized in December. Once the Saudi deal -- an unusually large arms package -- is factored in, the Pentagon estimates foreign military sales in FY-12 will total $59.8 billion, a previously unreported figure.