Aerospace Daily & Defense Report
April 3, 2012
Pg. 1
By Amy Butler
Boeing’s decision to close down its Wichita facility, which was slated to handle military modifications for the KC-46A aerial refueler, has added some uncertainty and risk into the development effort, according to Maj. Gen. Christopher Bogdan, who oversees the U.S. Air Force program.
The risk, though manageable, is being closely watched in three key areas, Bogdan says. They include the transfer of work to build the refueling boom, shifting oversight of the FAA supplemental type certification (STC) and moving the military modification and finishing center from Wichita to Everett, Wash., where the 767-2C will be assembled. Wichita has been the traditional site for this type of work at Boeing for decades and was “very well suited” for the work, he says.
“The move from Wichita in the early phase of this program introduces some risk. [Boeing has] shown us some mitigation plans, [and] we are adding some oversight in terms of manufacturing readiness assessments… to make sure they mitigate that risk appropriately,” Bogdan tells Aviation Week. “Without a doubt, closing Wichita is a change to the plan, and any change on a program like this is going to introduce some uncertainty and some risk.”
The government has asked Boeing for details on how it plans to ensure the STC can be handled from Everett, Bogdan says. Though this is not specifically a part of the preliminary design review now under way, he says that the plan is needed to provide clarity to both FAA and the Air Force.
“The fact that they chose to close Wichita was not part of the original plan. And so, quite frankly, we are going to hold them accountable to make sure that the risks don’t manifest themselves. To do that I’ve got to make sure they have plans in place and we are involved in the oversight of that move… under the same cost structure, under the same schedule with the same requirements,” Bogdan says.
Boeing opted to close the facility by the end of 2013 due to a lack of “sustainable business on the horizon to create an affordable cost structure to maintain and win new business,” according to the company’s Jan. 4 statement.
The move, however, isn’t all bad news for the KC-46A program, Bogdan says.
“If Boeing can make this transfer from Wichita to [Everett]… and they can do that without introducing any risk in cost or schedule…we think overall the program will be less risky because they are going to build the boom in the same place where they build all of the other military stuff,” Bogdan says. “The consolidation of all of those elements in one place is really a good thing… The problem is they have got to make that transition now while they are designing the airplane.“
The risk to the government, however, is not financial, owing to a fixed-price, incentive-fee contract structure. Financial risk would only be introduced if the government and Boeing opted to change requirements or reopen negotiations for an unforeseen reason.
The greater risk is that snags in development will prolong deliveries, forcing the Air Force to keep aging and maintenance-hungry K-135s in service longer than planned. This is especially true should “problems be discovered late in development or while production is under way,” according to auditors with the U.S. Government Accountability Office (GAO).
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