The Air Force on Thursday awarded Boeing a $2.8 billion contract for 19 KC-46A tankers, just days after the company received the green light for low rate initial production.

The award covers the first two lots of LRIP aircraft —seven aircraft in the first batch and 12 in the second — as well as spare engines and refueling pod kits. Boeing is expected to deliver 18 aircraft to the Air Force by January 2018.

KC46“The KC-46 tanker will provide the Air Force unprecedented refueling capabilities, operational flexibility and combat readiness,” Leanne Caret, president and CEO of Boeing Defense, said in a statement. “It’s an important day for the company and program. We’re excited about building low-rate initial production aircraft.”

The Pentagon cleared the KC-46 for low rate initial production last week after a Defense Acquisition Board review, the Air Force announced late last Friday. Pentagon acquisition chief Frank Kendall was responsible for making the Milestone C decision.

Under the 2011 engineering, manufacturing and development contract reached by the Air Force and Boeing, the service was responsible for funding up to $4.9 billion of development costs. During that contracting period, the company produced four aircraft — two 767-2Cs, which did not include refueling capability, and two KC-46A tankers — which flew more than 1,000 flight hours and conducted aerial refueling with F-16, F/A-18, AV-8B, KC-10, C-17 and A-10 aircraft.

Boeing also experienced technical challenges that forced the company to eat $1.9 billion in cost overruns. In the latest incident, the aircraft struggled to refuel heavier aircraft like the C-17. Testing resumed and was successfully concluded after Boeing made alterations to the refueling boom’s software and hardware, including the introduction of a new bypass to regulate the flow of fuel.

Pegasus_refuels_Globemaster_(2)Unfortunately, those problems contributed to schedule delays that pushed back the Milestone C decision from June to August. Boeing’s contractual obligation to deliver the first 18 certified KC-46s was also delayed from August 2017 to January 2018.

Those aircraft will be delivered to McConnell Air Force Base, Kansas, and Altus Air Force, Oklahoma, the Air Force said last week. Deliveries will begin in 2017, according to the Boeing statement.

The US Air Force’s current program of record includes 179 KC-46 aircraft to replace its aging KC-135 fleet. International customers and the service’s future KC-Y and KC-Z programs offer additional sales opportunities for Boeing.

Source: Defense News