The Air Force has released Boeing from future cost-growth liability on the KC-46A tanker, altering the fundamental terms of a 2011 contract that capped government costs at $4.9 billion and forced the defense contractor to pay out-of-hide for remedial work that so far totals $5.5 billion -- a move that comes as Boeing saddles the Air Force with a new major milestone delay.
Federal auditors revealed these and other new developments in a report on the $43.8 billion KC-46A program, notably finding an April 2020 plan by the Air Force and Boeing to overhaul the Remote Vision System is comprehensively deficient.
“In October 2021, Air Force officials said they plan to assume financial responsibility of the new RVS design without ensuring the program takes key steps to mature the system’s critical technologies,” according to the Government Accountability Office report released today.
This action was taken in accordance with the terms of an April 2020 agreement between Boeing and the Air Force that stipulated the government could bear costs for design changes to RVS after a preliminary design review, according to GAO.
“This arrangement, effectively, reversed the original terms of the firm-fixed-price contract that aimed to hold Boeing fully responsible for delivering a system that would work in any lighting conditions,” the report states.
During developmental testing in 2018, a major deficiency was identified.
The aerial refueling operator seated in the forward part of the KC-46 and reliant on the Remote Vision System to see receiver aircraft was not -- in certain circumstances -- able to make contact with the receiver aircraft. It turned out the RVS’ camera and processor were overwhelmed by direct contact with the sun, washing out the screen for the operator. In addition, the system didn’t provide sufficient depth perception in all lighting conditions, testing determined.
As a result, the Air Force and Boeing agreed on a complete redesign, dubbed RVS 2.0 -- incorporating upgrades to cameras and processors as well as new display systems.
GAO found, however, that, the new RVS still does not work in changing lighting conditions.
While the KC-46 program has suffered many schedule delays, the Air Force’s financial risk has been generally limited as a result of the terms of the fixed-price contract.
GAO notes, however, that the Air Force is poised to let Boeing off the hook for potential future cost growth on its proposed RVS 2.0 without “assessing the system’s technology readiness level,” without “developing a plan to bring the system’s immature technologies to appropriate technology readiness levels” and without “integrating and testing the system prototype in an operational environment."
GAO recommends the Air Force secretary direct an independent technical readiness review of critical technologies in the redesigned RVS before completing the preliminary design review. In addition, congressional investigators recommend the Air Force develop technical maturation plans for RVS 2.0 critical technologies and also test a full RVS 2.0 prototype on a KC-46 in an operational environment prior to completing preliminary design review.
The Air Force, in a memo accompanying the GAO report, disagreed with all three recommendations, arguing these recommendations would further delay the KC-46 program schedule.
“The Memorandum of Agreement signed between the Air Force and Boeing established a non-standard acquisition framework to deliver an improved RVS on an accelerated timeline,” states the Defense Department response.