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Boeing receives first contract of Air Force One recap

One year after being announced as prime contractor, Boeing is formally on contract to replace America’s 747-200-derived "Air Force One" fleet with up to three modified 747-8 widebodies.

The US Air Force announced the sole-source selection of the 747-8 in January 2015, ending any chance of an upset victory by the only Western-built four-engine alternative, the Airbus A380 manufactured in Toulouse, France.

On Friday, Boeing received its first contract under the US Air Force’s Presidential Aircraft Recapitalisation (PAR) programme. According to the contract notice, the $25.8 million deal aims to reduce risk before the programme launches an engineering and manufacturing development phase in 2017.

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“This is the start of our contractual relationship with Boeing,” says PAR programme chief Col Amy McCain. “This initial effort is about reducing risk, really understanding where the tough work will be, finding affordability opportunities, and getting the best value for the taxpayer, while continuing to meet the needs of our commander in chief.”

Senior leadership at Boeing has rejected several requests by the Pentagon to sell 747-8 technical data to third parties wanting to compete for the prime system integrators position, essentially locking out rivals.

One unnamed company offered to reverse-engineer the 747-8 to obtain the necessary technical data and certifications, but this has been deemed too expensive compared to sole-sourcing Boeing, the air force says in justification and approval document accompanying the award.

The air force maintains that it made every effort to facilitate competition, but introducing a third-party prime contractor could have imposed “$200-400 million in duplicative costs” and delayed initial operational capability by three years. Instead, the service hopes to obtain technical data to the “maximum extent possible” and compete for future requirements, such as upgrade and sustainment.

The contract constitutes Phase 1 of “pre-milestone B” efforts, running through April 2017 – at which point the air force intends to transition to development. Two 747s will be purchased initially, with an option to buy a third aircraft.

The contract comes just days after Boeing disclosed its fourth rate cut in two years at the 747-8 factory in Everett, Washington, along with an $885 million pre-tax charge. By September, Boeing will produce just one 747-8 every other month, down from 1.3 aircraft per month currently.

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Department of Defense

Replacing two ageing VC-25A presidential aircraft stationed at Andrews AFB is a high priority for the air force. It will attempt to keep two of its future aircraft on standby at all times to support the president, while the third undergoes depot maintenance. The air force says this concurrent availability rate “could fall to 28% in the 2025 timeframe” compared to projections of 56% concurrent availability for modern 747-8s.

Delaying replacement by one year could add $255 million in otherwise unnecessary maintenance and modification costs, or $510 million for a two-year delay, the air force says.

“The presidential aircraft is one of the most visible symbols of the United States at home and abroad,” says air force secretary Deborah Lee James. “We will ensure the next Air Force One meets the necessary capabilities established to execute the presidential support mission while reflecting the office of the president of the [USA] consistent with the national public interest.”

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