Report: Supplier is a drag on Boeing KC-46 tanker program

  • By Dan Catchpole Herald Writer
  • Thursday, March 31, 2016 4:37pm
  • Business

EVERETT — The Boeing Co.’s new KC-46 aerial refueling tanker continues to be hampered by late supplier deliveries, according to a federal oversight report released Thursday.

“A key supplier is not delivering aerial refueling systems on time, which could affect the timely delivery of aircraft,” the Government Accountability Office report says.

Boeing already is racing to deliver the first 18 combat-ready tankers to the U.S. Air Force by August 2017, as required by a fixed-price development contract that capped the cost to taxpayers at $4.9 billion. The delays have driven actual costs well past that mark. So far, the company has paid more than $1.2 billion in cost overruns.

Boeing might have to pay more to finish developing the tanker, which is based on the 767 and assembled at its plant in Everett. Based on the GAO’s program review in January, $924.3 million more is needed to complete research and development, the report says.

Due to the ongoing supplier problem and previous development delays, the Air Force has pushed back when it will tell the airplane maker to go to full-rate production — from October 2017 to March 2018, according to the Government Accountability Office’s report.

Boeing is expected to start making money on the program after it is in full-rate production. In all, the Air Force plans to buy 179 of the multi-role tankers, an order estimated to be worth about $49 billion.

The aerospace company still expects to deliver the first batch of tankers on time and is working with suppliers to “improve processes” and make sure they meet deadlines, Boeing spokesman Chick Ramey said.

The Air Force did not immediately respond to a request for comment.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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