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April 30, 2020 | International, Aerospace

The new Air Force One just racked up its first cost overrun

By: Valerie Insinna

WASHINGTON — Boeing will have to pay $168 million out of pocket to cover increased costs on the VC-25B Air Force One replacement program, the company said Wednesday.

Boeing attributed the overrun to “engineering inefficiencies” caused by the impact of COVID-19, but Chief Financial Officer Greg Smith said the program remains on schedule with a projected delivery of the first VC-25B in 2024.

However, Boeing's quarterly report to the Security and Exchange Commission noted future risk to the program's cost and schedule as a result of the engineering challenges. “We believe these inefficiencies will result in staffing challenges, schedule inefficiencies and higher costs in the upcoming phases of the program,” the company stated in the report.

It was not immediately clear how work on the VC-25B program had been disrupted.

“That charge was really associated with COVID-19,” Smith told reporters in an April 29 phone call. “As we have folks working virtually — particularly on the engineering side — as well as that's gone, we certainly experienced some inefficiencies that has caused us to re-evaluate our estimates to complete those efforts. And that's essentially what you saw today in our results and the charge associated with that.”

Smith added that although the program team has done a “good job” of managing the program in the face of changes caused by the novel coronavirus pandemic and is “executing very well on many fronts,” Boeing could not mitigate the added cost to the program this financial quarter.

Air Force acquisition executive Will Roper said he spoke with Boeing Defense CEO Leanne Caret last night about the problem, but because the issue was “late breaking,” he referred detailed questions to the program office.

On Wednesday night, the Air Force released a statement that — like Boeing — attributed the cost increase to “engineering inefficiencies.”

Just two weeks ago, Roper praised the progress of the program, which used virtual tools to complete its critical design review in March and wrap up a modification readiness review in April. At the time, the program was on schedule with no disruptions due to COVID-19, he said then.

The Air Force One replacement drew considerable attention in 2016 after then-President-elect Donald Trump tweeted that the program was too expensive and should be cancelled unless the cost—then projected as more than $4 billion—came down. In 2018, the Air Force awarded Boeing a $3.9 billion fixed-price contract to modify two 747s into the VC-25B configuration.

" There has not been an increase to the $3.90B firm-fixed price contract with Boeing or the $5.3B VC-25B total acquisition cost," said Air Force spokeswoman Ann Stefanek.

Although the total price of the program is estimated to hit $5.3 billion once ancillary costs such as new hangars and revised technical manuals are included, the fixed-price ceiling on the $3.9 billion deal ensures that Boeing will have to pay for any cost growth incurred while building the two new Air Force Ones.

In February, Boeing began making structural changes to two Boeing 747s at its facility in San Antonio, Texas — paving the way for those jets to become VC-25Bs. The jets will also receive upgrades including enhanced electrical power, specialized communication systems, a medical facility, a customized executive interior and autonomous ground operations capabilities.

“As planned in the baseline schedule, the next phase of modification is on course to begin in June 2020,” Stefanek said.

https://www.defensenews.com/air/2020/04/29/the-new-air-force-one-just-racked-up-its-first-cost-overrun/

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  • Contract Awards by US Department of Defense - May 28, 2020

    May 29, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - May 28, 2020

    ARMY Ad Hoc Research Associates LLC,* Havre De Grace, Maryland (W91CRB-20-D-0017); Beshenich Muir and Associates LLC,* Leavenworth, Kansas (W91CRB-20-D-0018); Digiflight Inc.,* Columbia, Maryland (W91CRB-20-D-0019); Integrated Defense Applications LLC,* El Paso, Texas (W91CRB-20-D-0020); Joint Research and Development Inc.,* Stafford, Virginia (W91CRB-20-D-0021); Man-Machine Systems Assessment Inc.,* El Paso, Texas (W91CRB-20-D-0022); and Science and Technology Corp.,* Hampton, Virginia (W91CRB-20-D-0023), will compete for each order of a $249,000,000 hybrid (cost-plus-fixed-fee, firm-fixed-price) contract to provide engineering and test support services across all directorates and divisions within the U.S. Army Evaluation Center, Aberdeen Proving Ground, Maryland. Bids were solicited via the internet with seven received. Work locations and funding will be determined with each order, with an estimated completion date of May 27, 2025. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity. James Construction, Baton Rouge, Louisiana, was awarded a $55,050,170 firm-fixed-price contract for the Comite River Diversion Project. Bids were solicited via the internet with three received. Work will be performed in East Baton Rouge, Louisiana, with an estimated completion date of Dec. 31, 2021. Fiscal 2018 civil construction funds in the amount of $55,050,170 were obligated at the time of the award. U.S. Army Corps of Engineers, New Orleans, Louisiana, is the contracting activity (W912P8-20-C-0023). Jabez-Absher Small Business JV,* Orting, Washington, was awarded a $42,743,158 firm-fixed-price contract for a 22 Special Tactics Squadron operations facility at Joint Base Lewis-McChord (JBLM), Washington. Bids were solicited via the internet with two received. Work will be performed at JBLM with an estimated completion date of July 7, 2022. Fiscal 2020 military construction, defense-wide funds in the amount of $42,743,158 were obligated at the time of the award. U.S. Army Corps of Engineers, Seattle, Washington, is the contracting activity (W912DW-20-C-0005). PRIDE Industries, Roseville, California, was awarded a $20,281,403 firm-fixed-price contract to provide repair and maintenance support to the real property assets of the Joint Readiness Training Center and Fort Polk, Louisiana. Bids were solicited via the internet with one received. Work will be performed in Leesville, Louisiana, with an estimated completion date of May 31, 2021. No funds were obligated at the time of the award. The U.S. Army 418th Contract Support Brigade, Fort Hood, Texas, is the contracting activity (W91247-18-C-0011). General Electric Co., Lynn, Massachusetts, was awarded a $9,451,807 firm-fixed-price contract for maintenance and overhaul of the Stage 1 Nozzle. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of May 27, 2025. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity (W58RGZ-20-D-0036). NAVY R.A. Burch Construction Co. Inc.,* Ramona, California (N62473-17-D-4626); Bristol Design Build Services LLC,* Anchorage, Alaska (N62473-17-D-4627); I.E.-Pacific Inc.,* Escondido, California (N62473-17-D-4628); Barnhart-Reese Construction Inc.,* San Diego, California (N62473-17-D-4629); and Bilbro Construction Co. Inc.,* Escondido, California (N62473-17-D-4630), are awarded $58,000,000 to increase the aggregate capacity of the previously awarded suite of firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple award construction contracts. The maximum dollar value including the base year and four option years for all five contracts combined is increased from $240,000,000 to $298,000,000. The contracts are for new construction, renovation and repair of general building construction projects at various government installations located in California, Arizona, Nevada, Utah, Colorado and New Mexico. All work will be performed at various federal sites within the Naval Facilities Engineering Command (NAVFAC) Southwest area of responsibility. No funds are being obligated on this award and they will not expire. Future task orders will be primarily funded by military construction (Navy) funds; operations and maintenance (O&M) (Navy) funds; O&M (Marine Corps) funds; and Navy working capital funds. The original contract was competitively procured via the Navy Electronic Commerce Online website and 20 proposals were received. The NAVFAC Southwest, San Diego, California, is the contracting activity. Metron Inc.,* Reston, Virginia, is awarded a $32,199,767 ceiling increase and 36-month period of performance extension modification to previously awarded, cost-plus-fixed-fee contract N65236-17-C-8000 for research and development of a mission planning and execution aid tool to support strategic fleet operations. Work will be performed in Reston, Virginia (81%); and San Diego, California (19%), and is expected to be complete by May 2023. This modification brings the total cumulative value of the contract to $52,574,968. Fiscal 2020 research, development, testing and evaluation (Navy) funds in the amount of $4,362,374 will be obligated at time of award and will not expire at the end of the fiscal year. The Naval Information Warfare Center Atlantic, Charleston, South Carolina, is the contracting activity. Kings Bay Support Services LLC, Alexandria, Virginia, is awarded a $23,589,660 indefinite-delivery/indefinite-quantity modification (N69450-11-D-7578) for the exercise of the option to extend services for base operations support services at Naval Submarine Base Kings Bay, Georgia. The work to be performed provides for all labor, facilities management, supervision, tools, materials, equipment, incidental engineering, environmental services and transportation to effectively execute base operations support services. Work is expected to be complete by November 2020. After award of this option, the total cumulative contract value will be $365,830,721. No funds will be obligated at time of award. Fiscal 2020 operations and maintenance (Navy) contract funds in the amount of $15,831,705 for recurring work will be obligated on individual task orders issued during the option period. The Naval Facilities Engineering Command Southeast, Jacksonville, Florida, is the contracting activity. Vectrus-J&J Facilities Support LLC, Colorado Springs, Colorado, is awarded a $23,274,230 indefinite-delivery/indefinite-quantity contract (N62470-20-D-0011) for base operations support (BOS) services at Naval Support Activity, Annapolis, Maryland, to include services at the U.S. Naval Academy. Work will be performed in Anne Arundel County, Maryland. The BOS services to be performed include general information, management and administration, facility management, facility investment, pest control, integrated solid waste management, pavement clearance, special events, utility management, electrical, natural gas, wastewater, steam, water, chiller plant and transportation. Work is expected to be complete by August 2027. The maximum dollar value, including the base period and six option periods, is $154,100,049. No funds will be obligated at time of award. Fiscal 2020 operations and maintenance (Navy) contract funds in the amount of $15,172,106 for recurring work will be obligated on an individual task order issued during the base period. This contract was competitively procured via the Navy Electronic Commerce Online website, and nine proposals were received. The Naval Facilities Engineering Command, Atlantic, Norfolk, Virginia, is the contracting activity. Sikorsky, a Lockheed Martin Co., Stratford, Connecticut, is awarded a $17,916,867 modification (P00286) to previously awarded cost-plus-incentive-fee contract N00019-06-C-0081. This modification provides logistics, program management, training, configuration management and sustaining engineering support for the H-53K system demonstration and test article aircraft. Work will be performed in Shelton, Connecticut (57%); New River, North Carolina (35%); Patuxent River, Maryland (5%); and Bohemia, New York (3%). This modification includes pre-initial operational test and evaluation scheduled and unscheduled maintenance and software updates as well as product support packages, repair of repairable analysis and identification and interim supply support provisioning. Additionally, various pieces of peculiar support equipment and common support equipment may be identified and procured under this modification. Work is expected to be complete by December 2024. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $7,500,000 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Vectrus Systems Corp., Colorado Springs, Colorado, is awarded a $15,827,023 indefinite-delivery/indefinite-quantity (IDIQ) modification (N62742-16-D-3552) for the exercise of Option Two under an IDIQ contract for base operations support services at Naval Station Guantanamo Bay, in the Naval Facilities Engineering Command Southeast area of responsibility (AOR). Work will be performed in Guantanamo Bay, Cuba. The work to be performed provides for base operations support services to include facility investment, other (swimming pools), utilities management, electrical, wastewater, steam, water, base support vehicles and equipment, and environmental. Work is expected to be complete by November 2020. After award of this option, the total cumulative contract value will be $61,744,502. No funds will be obligated at time of award. Fiscal 2020 operations and maintenance (Navy); fiscal 2020 operations and maintenance (Army); and fiscal 2020 Defense Health Program contract funds in the amount of $12,228,731 for recurring work will be obligated on modifications to the task order during the option period. The Naval Facilities Engineering Command Southeast, Guantanamo Bay, Cuba, is the contracting activity. BAE Systems Land and Armaments LP, Sterling Heights, Michigan, is awarded an $11,038,019 modification for cost-plus-fixed-fee Contract Line Item Number 8101 to previously awarded contract M67854-16-C-0006 for Phase Two of the design and development for the Amphibious Combat Vehicle (ACV) medium caliber cannon mission role variant. The ACV program is managed within the portfolio of Program Executive Officer Land Systems, Quantico, Virginia. Work will be performed in York, Pennsylvania (85%); and Aiken, South Carolina (15%), and is expected to be complete by March 2021. Fiscal 2020 research, development, test and evaluation (Marine Corps) funds in the amount of $3,885,873 will be obligated at the time of award and funds will not expire at the end of the current fiscal year. This contract modification was not competitively procured, in accordance with Federal Acquisition Regulation 6.302-1 and 10 U.S. Code 2304(c)(1). The Marine Corps Systems Command, Quantico, Virginia, is the contracting activity. Kellogg Brown and Root Services Inc., Houston, Texas, is awarded a $9,885,077 indefinite-delivery/indefinite-quantity (IDIQ) modification (N62470-14-D-6012) for the exercise of bridge Option Two under an IDIQ contract for base operations support services at Isa Air Base, Kingdom of Bahrain. Work will be performed at Isa Air Base, Kingdom of Bahrain, and provides for but is not limited to all management, supervision, tools, materials, supplies, labor and transportation services necessary to perform galley services, bachelor quarters and laundry services, facility management, emergency service requests, urgent service, routing service, facilities investment, custodial, pest control service, integrated solid waste, grounds maintenance, wastewater, operate reverse osmosis water treatment system and base support vehicles, environmental, fire emergency services and explosive safety officer services. Work is expected to be complete by August 2020. After award of this bridge option, the total cumulative contract value will be $181,834,599. No funds will be obligated at time of award. Fiscal 2020 operations and maintenance (Navy) contract funds in the amount of $9,885,077 for recurring and non-recurring work will be obligated on individual task orders issued during the option period. The Naval Facilities Engineering Command Europe, Africa and Central, is the contracting activity. DynCorp International, Fort Worth, Texas, is awarded an $8,774,725 modification (P00007) to previously awarded firm-fixed-price, cost reimbursable, indefinite-delivery/indefinite-quantity contract N61340-19-D-0905. This modification increases the flight hour capacity on base year two of this contract by 1,100 flight hours per month, increasing the total flight hours from 6,500 hours per month to 7,600 hours per month in support of the TH-57 aircraft. Work will be performed in Milton, Florida, and is expected to be complete by May 2023. No funds are being obligated at time of award; funds will be obligated on individual orders as they are issued. The Naval Air Warfare Training Systems Division, Orlando, Florida, is the contracting activity. DEFENSE LOGISTICS AGENCY Interior Fusion LLC, Largo, Florida, has been awarded a maximum $45,000,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for medical equipment and accessories for the Defense Logistics Agency electronic catalog. This was a competitive acquisition with 115 responses received. This is a five-year contract with no option periods. Location of performance is Florida, with a May 27, 2025, performance completion date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE2DH-20-D-0041). Varec Inc., Norcross, Georgia, has been awarded a maximum $9,584,428 firm-fixed-price task-order (SP4702-20-F-0048) against a four-year blanket purchase agreement (SP4702-19-A-0504) for FuelsManager defense deployments and on-site support. This was a sole-source acquisition as stated in Federal Acquisition Regulation 8.405-6 (a)(1)(i)(B). This is a one-year contract with no option periods. Locations of performance are inside and outside the continental U.S., with a May 31, 2021, performance completion date. Using military services are Army, Marine Corps, Navy and Air Force. Type of appropriation is fiscal 2020 defense working capital funds. The contracting agency is the Defense Logistics Agency Contracting Services Office, Columbus, Ohio. Genesis Vision,* doing business as Rochester Optical, Rochester, New York, has been awarded a maximum $9,000,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for optical frames. This was a competitive acquisition with one response received. This is a three-year base contract with two one-year option periods. Location of performance is New York, with a May 27, 2023, performance completion date. Using customers are Army, Navy, Air Force, Marine Corps and federal civilian agencies. Type of appropriation is fiscal 2020 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE2DE-20-D-0013). Varec Inc., Norcross, Georgia, has been awarded a maximum $8,829,339 firm-fixed-price task order (SP4702-20-F-0049) against a four-year blanket purchase agreement (SP4702-19-A-0505) for FuelsManager defense software maintenance services. This was a sole-source acquisition as stated in Federal Acquisition Regulation 8.405-6 (a)(1)(i)(B). This is a one-year contract with no option periods. Locations of performance are Georgia and Virginia, with a May 31, 2021, performance completion date. Using military services are Army, Marine Corps, Navy and Air Force. Type of appropriation is fiscal 2020 defense working capital funds. The contracting agency is the Defense Logistics Agency Contracting Services Office, Columbus, Ohio. AIR FORCE Thomas Instrument, Brookshire, Texas, was awarded a $25,334,400 five-year, indefinite-delivery/indefinite-quantity contract for remanufacture of B-1B left/right-hand hydraulic heat exchanger. Work will be performed in Brookshire, Texas, and is expected to be completed by Sept. 21, 2025. This award is the result of a competitive acquisition and two offers were received. Fiscal 2020 working capital funds in the amount of $1,679,680 will be obligated at the time of award. Air Force Sustainment Center, Tinker Air Force Base, Oklahoma, is the contracting activity (FA8118-20-D-0010). Northrop Grumman Systems Corp., has been awarded a $19,354,527 firm-fixed-price requirements contract for the repairs, spares and engineering services relating to the electronic systems test set, ALQ-155 power management system, ALQ-161 defensive avionics system (DAS) and Band 6/7/9 of B-1B ALQ-161 DAS. Work will be performed in Rolling Meadows, Illinois, and is expected to be completed by Sept. 9, 2028. This award is the result of a non-competitive acquisition. Fiscal 2020 defense working capital funds are being used and no funds are being obligated at the time of the award. The Air Force Sustainment Center, Robins Air Force Base, Georgia, is the contracting activity (FA8524-20-D-0011). M1 Support Services L.P., Denton, Texas, has been awarded a $12,533,445 firm-fixed-price modification (P00101) to contract FA8106-13-C-0008 for C-21 contractor logistics support services. This modification provides for the exercise of Option Seven, which includes maintenance and repair support of the C-21 fleet. Work will be performed at various locations worldwide, and is expected to be completed by Dec. 31, 2020. This modification brings the total cumulative face value of the contract to $138,119,030. Fiscal 2020 operations and maintenance funds in the full amount are being obligated at the time of award. Air Force Life Cycle Management Center, Tinker Air Force Base, Oklahoma, is the contracting activity. Dynetics Inc., Huntsville, Alabama, has been awarded a $10,452,506 indefinite-delivery/indefinite-quantity (IDIQ) contract for the Laboratory Intelligence Validated Emulator (LIVE) Virtual Constructive (LVC) production and sustainment. The work involved with this effort includes production, test and delivery of LIVE LVC test systems and sustainment of those systems for the Electronic Warfare and Avionics Integration Support Facility, Robins Air Force Base, Georgia, and other Department of Defense agencies. Work will be performed in Huntsville, Alabama, and is expected to be completed by May 27, 2030. This award is the result of a sole-source acquisition. Fiscal 2020 operations and maintenance funds in the amount of $824,186; and fiscal 2020 aircraft procurement funds in the amount of $3,191,926 are being obligated at the time of award. Air Force Life Cycle Management Center, Robins AFB, Georgia, is the contracting activity (FA8523-20-D-0004). Northrop Grumman Systems Corp., Azusa, California, has been awarded a $7,304,322 firm-fixed-price and cost-reimbursement modification (P00013) to contract FA8823-17-C-0001 for Defense Meteorological Satellite Program sensor sustainment. This contract modification provides for the exercise of an option for sensor sustainment of the Defense Meteorological Satellite Program on-orbit constellation being provided under the basic contract. Work will be performed in Azusa, California; Baltimore, Maryland; Boulder, Colorado; and Dallas, Texas, and is expected to be completed May 31, 2021. The total cumulative face value of the contract is $29,309,850. Fiscal 2020 operations and maintenance funds are being obligated at the time of award. The Space and Missiles Systems Center, Peterson Air Force Base, Colorado, is the contracting activity. U.S. SPECIAL OPERATIONS COMMAND Leidos Inc., Reston, Virginia (H92238-20-C-0001) was awarded a $22,699,935 cost-plus-fixed-fee contract for a De Havilland Canada Dash 8 aircraft, with modifications in support of U.S. Special Operations Command (USSOCOM) requirements. The contract is multi-year and funded with fiscal 2020 procurement, defense-wide appropriations. The majority of the work will be performed in Bridgewater, Virginia. This is a non-competitive award and in accordance with Federal Acquisition Regulation 6.302-1. USSOCOM, Tampa, Florida, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2200874/source/GovDelivery/

  • Swiss issue second RFP for fighter/GBAD replacements

    January 14, 2020 | International, Aerospace

    Swiss issue second RFP for fighter/GBAD replacements

    Gareth Jennings, London Switzerland has issued a second request for proposal (RFP) for its Air2030 requirement to procure new combat aircraft and ground-based air defence (GBAD) systems. The supplementary solicitation, which came about 12 months after the first RFP, was issued by the country's Armasuisse defence procurement agency on 10 January. As noted by the Federal Department of Defence, Civil Protection, and Sport (VBS [previously DDPS]) that announced the new RFP, the second request builds on data already gathered from tests and evaluations of the five candidate fighter aircraft and two GBAD types. For the requirement to replace the Swiss Air Force's current Northrop F-5E/F Tiger II and Boeing F/A-18 Hornet fleets, Air2030 is considering the Eurofighter Typhoon, Dassault Rafale, Boeing F/A-18E/F Super Hornet, Saab Gripen E, and Lockheed Martin F-35A Lightning II Joint Strike Fighter (JSF). For the GBAD requirement, Air2030 is considering the Eurosam SAMP/T and Raytheon Patriot. For the fighter aircraft element, the companies contacted via the government authorities are requested to submit the most advantageous offer for Switzerland. The proposal should include prices for 36 and 40 aircraft (including logistics and weapons), as well as other defined industrial aspects of the bid including offsets. "The starting point for determining the number of fighter aircraft are the requirements to cope with a situation of increased tension. In such a situation, the Swiss Air Force must be able to permanently conduct air patrols with at least four aircraft for at least four weeks in order to preserve air sovereignty, prevent unauthorised use and violations of Swiss air space, and thus contribute to keep Switzerland out of armed conflict. In addition, the Swiss Air Force will use the new fighter aircraft for air policing around the clock, and, in case of armed attack, defend the air space for a limited period of time and support the ground forces," the RFP said. https://www.janes.com/article/93660/swiss-issue-second-rfp-for-fighter-gbad-replacements

  • US Space Force wants funding for a new mission '€” tracking ground targets

    January 20, 2022 | International, Aerospace, C4ISR

    US Space Force wants funding for a new mission '€” tracking ground targets

    The ongoing, SWAC-led analysis is weighing options for a space-based GMTI program that could be funded as soon as fiscal 2024.

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