Tanker in Trouble

By Gabe Starosta / November 6, 2013 at 3:50 PM

The Air Force's senior civilian acquisition official informed Congress two weeks ago that the service came within 24 hours of having to break a fixed-price contract during the recent government shutdown, without naming the program. An Air Force spokesman today confirmed the program in question was the KC-46 tanker development effort, making this the second time in two years the service has warned it came close to losing the good deal it got from Boeing in 2011.

The first time, in 2012, occurred because the combination of sequestration and a continuing resolution threatened to leave the Air Force without enough money to pay for the program's planned increase in expense from fiscal year 2013 to FY-14. This time, the 16-day government shutdown that ended Oct. 17 with the signing of a continuing resolution put the service in an uncomfortable contractual position, according to Bill LaPlante, the Air Force's principal deputy acquisition executive. He testified before the House Armed Services tactical air and land forces subcommittee on Oct. 23.

"The program in question was KC-46," service spokesman Ed Gulick said in a statement this morning. "We were facing unique challenges trying to meet contractual obligations with no appropriations budget or continuing resolution. The resulting CR allowed us to meet these obligations."

LaPlante told InsideDefense.com after the hearing, "It was a particular contract where it was very simple in that we needed to have money to pay the contractor, and we did not have [FY-14] money because we had no budget, so we were within, I think, 24 hours. It was nothing certain that it would have breached the contract, but it put us at significant risk, just because they have to be paid.

"If you're not paid, the contractor can say . . . I need compensation for not being paid. It was not a little contract, either. I can't tell you what contract it was, but it was one of the big contracts, so this is real."

LaPlante has since been nominated by the White House to take over the long-vacant and Senate-confirmed Air Force acquisition executive position.

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