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.