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Boeing Gets $2.8B Air Force Contract Modification for Lot 1 & 2 Tankers

KC46ABoeing (NYSE: BA) has been awarded a potential two-year, $2.81 billion contract modification to deliver a total of 19 KC-46A Pegasus low-rate initial production aircraft to the U.S. Air Force.

The service branch made the award for the first two LRIP lots after the aircraft received Milestone C approval from the Defense Department on Aug. 12, DoD said Thursday.

DoD acquisition chief Frank Kendall issued the Milestone C decision after Boeing and the military branch demonstrated the aircraft’s aerial refueling function with several planes, such as F-16 Fighting Falcon and C-17 Globemaster III.

The modification covers pre-priced options for the procurement of seven Pegasus aircraft under LRIP lot 1 and 12 planes for lot 2.

The company will also supply a total of 4 spare engines and 10 wing refueling pod kits for the first two LRIP batches.

Work will occur at the company’s Seattle, Washington-based facility through Aug. 24, 2018.

The Air Force Life Cycle Management Center will obligate the full contract amount from aircraft procurement funds for fiscal 2015 and 2016 at the time of award, DoD said.

KC-46A Pegasus is designed to replace the service branch’s fleet of KC-135 Stratotankers and works to perform aerial refueling, cargo transport and aeromedical evacuation missions.

The aircraft has two Pratt & Whitney-built 4062 turbofan engines and is designed to lift off at a maximum weight of up to 415, 000 pounds.

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