U.S. Air Force Releases $882 Million for Boeing KC-46As Over COVID-19 Concerns

a bomber aircraft is refueled midair above snow-capped mountains

A KC-46 refuels the B-2 for the first time during developmental testing in April 2019. – U.S. Air Force/Christian Turner

The U.S. Air Force will release $882 million that was being withheld over Boeing KC-46 production problems.  The decision was made to provide Boeing with additional cash flow because of concerns about the impact of COVID-19 on the industrial base.

New tankers have been experiencing a number of technical problems, which is why funding was originally withheld.  The Air Force is able to hold back a maximum of $28 million per delivery, or about 20 percent of the total cost.  Typically the funds would only be released once the problems have been addressed.

The Air Force and Boeing also recently announced an agreement on fixing issues with the Remote Vision System, one of the aircraft’s main technical issues.  Under the agreement, Boeing will be responsible for both incremental fixes and a complete redesign of the system, including new cameras, processors, and computers.

The Air Force maintains the option to withhold future funding if problems persist.

About Shaun McDougall

As editor of International Military Markets, North America, Shaun has cultivated a deep understanding of the vast defense markets in the United States and Canada. Shaun's perspective on defense procurement and budget issues has been cited in a variety of defense periodicals, including Defense News and National Defense Magazine. Further, Shaun played an integral role in the development of Forecast International's U.S. Defense Budget Forecast product, which offers an unprecedented level of insight into the Pentagon's acquisition budget. In addition to providing original analytical content for the U.S. Defense Budget Forecast, Shaun oversees an internal defense budget forecasting process involving Forecast International's team of skilled systems analysts following release of the DoD's annual budget request. Shaun is also in charge of managing Forecast International's Weapons Inventory database.

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