Air Force Floats Multiyear Globemaster Buy To Defense Lawmakers

April 21st, 2007  
Team Infidel

Topic: Air Force Floats Multiyear Globemaster Buy To Defense Lawmakers

Inside The Air Force
April 20, 2007
Pg. 1

Air Mobility Command chief Gen. Duncan McNabb and other top-ranking Air Force officials have outlined an ambitious procurement plan that calls for the retirement of 30 C-5 aircraft from the service’s fleet and replacing those planes with a new C-17 multiyear buy, Inside the Air Force has learned.
The plan, dubbed the “30-30 proposal” by AMC officials, would call upon congressional lawmakers to authorize the unrestricted retirement of 30 “A” models of the venerable C-5 Galaxy airlifter, a congressional staffer told ITAF.
Once retired, the air service would then enter into a multiyear acquisition contract with C-17 prime contractor Boeing for 30 new Globemasters, which would be procured in 10-plane blocks over a three year period to fill the empty billets left behind by the C-5A retirements, the staffer noted.
McNabb and other AMC officials laid out details of the plan to congressional staff during an April 5 briefing on Capitol Hill, the staffer added.
To that end, Boeing officials outlined cost figures and other procurement issues related to a possible C-17 multiyear plan to service officials as part of an unsolicited bid submitted to the Air Force on April 13, shortly after McNabb’s congressional briefing, staffers say.
“Their rationale behind that is the fact that they did a life-cycle comparison cost of modernizing those 30 C-5As . . . versus procuring 30 C-17s and flying them for their life cycle,” the staffer said. “Essentially it is equivalent by roughly a couple hundred million dollars. So that is kind of the basis of their argument for 30-30.”
In addition, the operating cost for a C-5 averages out to roughly $23,000 per flying hour compared to the $11,000 to operate a C-17, even though the Galaxy’s cargo capacity is double that of the Globemaster’s, the staffer said.
While the focus of the new C-17 buy will proceed as a multiyear, the procurement date for the initial batch of 10 C-17s has not been discussed, the staffer noted.
“I think the 190-aircraft program of record ends . . . around April or June of 2009. So essentially, new aircraft would start rolling out right around them,” the staffer said, adding that the initial cost of that first batch is estimated at $2.4 billion.
The Air Force does, however, have the authority to enter into a new C-17 multiyear plan with Boeing after congressional authorizers gave service officials the green light on a 42-plane multiyear Globemaster buy as part of the Fiscal Year 2006 National Defense Authorization Act, according to the staffer.
“They already have the authority to enter into a multiyear,” the staffer said. “Remember, a couple of years ago, we gave them [multiyear] authority for up to 42 [C-17s] so they already have authorization to do it.”
Service officials could not comment on the specifics of the C-17 multiyear plan, since the effort is still under review by the Air Force, command spokesman Roger Drinnon said.
“AMC is reviewing the fleet mix of C-17s and modernized C-5s necessary to meet strategic airlift requirements,” he added in an April 18 e-mail. “Our focus is to support the joint war fighter with improved flexibility, responsiveness, reliability and equal economy.” A Boeing spokesman declined to comment on either the air service’s multiyear plan or the subsequent 30-plane bid submitted to the Air Force.
While the Air Force does have the authority to enter into a new multiyear buy for the C-17, the service’s plan also hinges on the fact that lawmakers must approve the C-5A retirements. In FY-07, Congress signed off on a handful of the service’s platform retirement requests, but required the Air Force to maintain those planes at a level where they could be re-deployed at a moment’s notice.
But that move was more of a defense mechanism legislators put in place to block potential closures of C-5 bases, suggested by the Base Realignment and Closure Commission, the staffer pointed out.
“That freaked out a lot of members, so they slapped on the restrictions,” the staffer said. “But I think AMC and the Air Force have basically told members in the districts that would be affected that even though you are losing your C-5A aircraft, we are going to backfill them with C-17s, so I think that kind of eased their concern.”
With such concerns quelled, “now you have members that were vocal last year about still enforcing the C-5A retirement . . . have kind of reversed course,” the staffer added.
The Air Force had planned to cap its fleet of C-17 airlifters at 190 aircraft and use modified versions of the C-5 to fill its air mobility needs. That assumption weighed heavily into the high-profile 2005 Mobility Capability Study, the department-wide study that helped Pentagon officials determine that 292 airlifters could perform anticipated future missions.
To that end, service budget officials excluded funding for Globemaster procurement in their budget proposal for FY-07. Subsequently, Boeing officials announced in March that it would no longer procure parts and items related to C-17 production, as part of the company’s preparations to shutter the line.
But significant cost overruns and subsequent schedule delays to the C-5 Avionics Modernization and Re-Engining and Replacement programs reinvigorated calls by C-17 proponents on Capitol Hill to nix a number of C-5s and replace them with Globemasters.
Most recently, House Armed Services Committee members Reps. Jim Marshall (D-GA) and Jim Saxton (R-NJ) called for the unfettered retirement of “hard broke” -- or unrepairable -- C-5As and replacing them with more Globemasters.
The plan proposed by Marshall and Saxton coincided with a Boeing-led effort to corral legislative support behind an additional C-17 buy of 16 to 18 planes in FY-08. A buy that would allow the defense giant to keep C-17 production humming well past the anticipated FY-09 shutdown date.
In an attempt to clarify the air service’s options for its C-5 modernization programs and to see whether or not a possible C-17 buy would be viable, Air Force acquisition czar Sue Payton issued a request for proposals to industry on the ongoing AMP and RERP efforts (ITAF, April 13, p1).
Noting that the option to retire a number of C-5As and replace them with new C-17 tails was “in the tradespace” of possible solutions, should the new RFP show that the Galaxy modification did not warrant continued investment, Payton declined to comment on specific numbers until the completion of the RFP in June.
But with Air Force officials already briefing congressional staff on the merits of the “30-30 proposal” a month-and-a-half before the RFP was set to wrap up shows that development of the plan had occurred long before the proposal was issued, staffers say.
“It was always going to come to this at some point, I mean it was pretty predictable,” another congressional source opined. “At the 11th hour in a smoke-filled room, [the C-17s] will be stuck in there. . . . It is like [the Air Force] has no problem with the As, then all of a sudden we have huge problems with the As. It is very dramatic.”
Consequently, Air Force and Boeing officials “have been looking at various cost proposals over the last two to three months” regarding a new C-17 buy, the staffer told ITAF.
To that end, top Air Force officials had already handed down the order to develop some sort of new C-17 procurement strategy “the same day” as Boeing’s announcement that they had ceased parts procurement for the Globemaster line, Loren Thompson of the Washington-based Lexington Institute said this week.
“Literally on the same day that Boeing [told] its suppliers that it was getting ready to shut down the [C-17] line, McNabb was being tasked on coming up with a rationale for 30 more,” he said during an April 18 interview.
To that end, Air Force Secretary Michael Wynn had assured Boeing officials that the air service intended to request funding for more C-17s in its FY-09 amended program objective memorandum, Thompson added.
“I think that the broader story here is that Air Force leadership is souring on modernization of aging transport planes,” he added. “That may very well mean that two years from now, we are talking about replacing the entire C-5 fleet with C-17s.”
While the Air Force’s procurement strategy for a C-17 multiyear buy has been in the planning for some time, service officials have yet to articulate a funding strategy for the 30-plane purchase.
Even with the potential savings garnered from not having to modify 30 C-5As, the money will not be available in the near-term to offset spending for a Globemaster buy.
“All the C-5A money for modernization is out in 2013, it is not like they can move it forward,” the congressional staffer said. “Basically they do not have an offset for it. They do not want to sacrifice anything within their current program of record to find the $2.4 billion to basically start with the [initial] 10 C-17s.”
Further evaluation of Air Force procurement accounts show even less opportunities for funding, Thompson added.
“There is no real money in [the long-range bomber], so you cannot save the money there. They are planning on keeping the F-22A line open beyond the current three-year MYP, so it is not coming from there. They cannot change the F-35 without screwing up the other two services that are participating, so there is no money there,” he said. “You just go right down the line -- they are going to have to find some other way of funding it.”
He added that the only viable way for the air service to generate enough funding to finance a C-17 multiyear would be strict management of their fleet.
“If the AF has the discretion to efficiently manage its aging airframes, it could free up a substantial amount of money for buying new planes,” he said. “[We] just do not know in what years and what amounts.”
-- Carlo Munoz

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