Boeing poised for $15.6 billion in Air Force work

WASHINGTON — Boeing Co. may reap as much as $15.6 billion through 2020 from the U.S. Air Force for development and production of its KC-46 aerial refueling tanker, according to estimates by the service.

The Air Force is requesting $2.95 billion for the fiscal year beginning Oct. 1, up from $2.35 billion this year, for the project to modify the company’s 767 passenger jet to refuel warplanes in midair. The Pentagon’s five-year plan sent to Congress this week calls for $3.22 billion for the Boeing tanker in fiscal 2017 and then about $3.1 billion a year through 2020.

The tanker is among weapons programs that would get a boost under President Barack Obama’s proposed $543.3 billion Defense Department budget for fiscal 2016, which includes $177.5 billion for weapons research and procurement, a 13 percent increase from this year when adjusted for inflation. The increase assumes that Congress and Obama will reach an agreement to end the automatic budget cuts called sequestration.

Chicago-based Boeing was the second-biggest U.S. government contractor last year after Lockheed Martin Corp. and received about $19.4 billion in federal orders, according to Bloomberg Intelligence. That’s down from $30.1 billion in fiscal 2012 as defense spending declined.

The Air Force and the U.S. Government Accountability Office have praised Boeing’s progress on the $51 billion program to build 179 of the tankers, despite some delays in flight testing and flaws in wiring on the prototype aircraft.

While the five-year plan amounts to a vote of confidence in the plane’s future, the Air Force projected in a new estimate that Boeing will have to absorb $1.5 billion for exceeding a $4.8 billion ceiling to develop the first four planes. Boeing also is revising its master schedule for developing the tanker, adding to uncertainty.

William LaPlante, the Air Force’s acquisition chief, said in an interview Wednesday that the new schedule would be presented in the next month.

Boeing “is still going to hit, as best as they can tell, the major delivery milestone — the first tranche of airplanes” by August 2017, he said. Slips in flight tests last year have reduced the margin built into the schedule to absorb delays, he said. “And we have tough stuff still in front of us.”

A close look at the Pentagon’s new five-year plan also provided details on these prospective winners among defense contractors:

—Northrop Grumman Corp. would see would see almost $5.18 billion in spending on its Air Force Global Hawk and Navy Triton drone programs through 2020. That includes about $1.99 billion for Global Hawks and about $3.19 billion for Navy procurement of the MQ-4 Triton.

The Falls Church, Va.-based company lobbied Congress successfully in 2012 to stop the Pentagon from retiring one version of the Global Hawk and putting the drones it had already bought into storage.

—The Navy plans to complete spending next year on the USS Gerald Ford, the first in a new class of aircraft carriers, while increasing funding for the second, the USS John F. Kennedy, for a total of $2.73 billion. Over five years, the request for the Kennedy and the USS Enterprise, the third carrier, would total about $11.4 billion.

Huntington Ingalls Industries Inc., based in Newport News, Va., is a prime contractor for the carriers, with San Diego-based General Atomics providing the launch and recovery system.

—The Air Force plans to spend $1.1 billion through 2020 continuing to develop and then purchase improved tail kits made by Boeing for the upgraded B61 nuclear bomb, which is designed to be dropped from tactical aircraft such as the F-16 and F-35 as well as bombers. Procurement funding would start with $147 million in fiscal 2018. The Energy Department is managing the warhead portion of the bomb’s modernization.

—The Air Force budget also includes more than $5 billion in funding through 2020 to modernize other nuclear-weapon systems such as Minuteman III missiles, infrastructure and facilities and to increase manpower and incentive pay for the nuclear-weapons force.

At a NATO defense ministers meeting in Brussels on Thursday, departing U.S. Defense Secretary Chuck Hagel emphasized the “critical role” of allied nuclear forces to counter Russia’s assertiveness.

“Our discussions today were particularly important in light of Moscow’s violations of the intermediate-range nuclear forces treaty, its violations of Ukrainian sovereignty and its increasingly aggressive military actions, such as its recent flight of nuclear-capable bombers near British airspace over the English Channel,” Hagel told reporters after a meeting of the North Atlantic Treaty Organization’s nuclear planning group.

The Pentagon’s fiscal 2016 request would fund continued integration of the B61 bomb on the B-2 stealth bomber and the PA-200 Tornado jet flown by NATO allies including Italy and Germany.

—The Army and Marine Corps procurement requests for next year include a combined $388 million to buy 559 new Joint Light Tactical Vehicles, an increase from $227 million this year. Together, the two services would buy more than 10,000 vehicles from 2017 through 2020 for an additional $5.59 billion.

The service will select a contractor in July. Oshkosh Corp., based in the Wisconsin city of the same name, Lockheed, and AM General LLC, based in South Bend, Ind., are competing for the project.

—The U.S. Missile Defense Agency requested $591 million through 2020 for Israeli missile-defense systems, including the Iron Dome, Arrow and David’s Sling systems.