Tue, Jul 15, 2003
Air Force Sends Tanker Recommendation to Capitol Hill
As Congress initiates review of the U.S. Air Force’s
report on the 767 Tanker lease, Boeing issued the following
statement:
"We commend (Air Force) Secretary
(James) Roche and the entire U.S. Air Force leadership for their
vision and work over the last 18 months. They have addressed
critical needs of the men and women who protect our nation. In
doing so they also have provided the best value to the American
taxpayer," said Jim Albaugh, president and CEO, Boeing Integrated
Defense Systems.
"We committed ourselves to providing the Air Force with the
quickest and most cost-effective way of putting modern, safe tanker
aircraft into the hands of the warfighter," Albaugh said. "There is
no question that as people study this program and understand it,
that they will agree – it satisfies a critical need, and
it’s a fair deal."
"In a dollar-to-dollar comparison of
leasing versus a traditional annual procurement, purchasing the
aircraft might save the taxpayers one percent," Albaugh said.
"However, the difference in price is eclipsed by the $5 billion
taxpayers would save by not having to pay maintenance costs
associated with the 100 oldest KC-135’s in service
today."
The agreement itself is unprecedented in several ways. Boeing is
paying all up-front costs associated with the development of the
aircraft. Boeing also agreed to cap its profits at standard DoD
levels while taking on all the risk of a firm fixed-price
development and production program. The U.S. government will
independently audit those profits. Under this arrangement there is
no risk to the government of an overrun and they have assurances
that Boeing will not make profits above stated guidelines.
The Air Force also has received most-favored customer
pricing so the taxpayers will receive a rebate if Boeing sells
anyone a 767 aircraft for less than the combined lease/purchase
price agreed to by the Air Force. The combined lease/purchase price
is the lowest offered by Boeing to any 767 customer in 17 years and
the lowest ever at these production rates.
Boeing also offered a more-detailed explanation of this unique
lease.
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