Boeing presses Congress to have Navy buy more Super Hornets

[tigershark]

Boeing presses Congress to have Navy buy more Super Hornets

 By Megan Scully  CongressDaily  April 29, 2008

The Navy is facing a strike-fighter shortfall and Boeing Co. officials believe they have the answer to the service's problems: Buy dozens more of the proven F/A-18E/F Super Hornets.

Despite no formal request from the Navy for more Super Hornets than they now plan to buy, the Chicago-based aerospace firm has been lobbying Congress to give service leaders the option to buy more of the fighters at a reduced price.

Doing so, Boeing officials say, will help the Navy avert the shortfall in its carrier-based fleet of strike fighters that the service expects to peak in 2017 at 69 aircraft and continue until Lockheed Martin's F-35C Joint Strike Fighter comes fully online in 2025.

Bob Gower, vice president of Boeing's F/A-18 programs, said that the company does not want to stand in the way of the Navy's purchases of the F-35C. The decision, he emphasized, isn't an "either/or" scenario.

But with the Pentagon's ever-increasing procurement budgets expected to flatten or even decline, Boeing's efforts could potentially set up a clash with F-35 advocates who fiercely guard that program's budget.

"The budget isn't going to grow, so this is coming out of the same pot of limited strike-fighter funding," said Richard Aboulafia, an aircraft analyst at the Teal Group.

The debate over the Navy's arsenal of strike fighters will almost certainly play out this week when the Senate Armed Services Committee marks up the fiscal 2009 defense authorization bill.

Boeing officials hope the panel adds language in the Pentagon policy bill that would allow the Navy to pursue a third multiyear contract for Super Hornets to begin in fiscal 2010 and last through fiscal 2013. A multiyear agreement would allow the Navy to sign a long-term contract for a fixed price, providing stability for Boeing and reduced prices for the Navy.

Although not necessary this year, congressional approval of a multiyear pact in the fiscal 2009 bill would allow Boeing and the Navy to maximize savings by redesigning parts and otherwise cutting costs, Gower said.

The Navy already plans to buy 89 Super Hornets through the traditional procurement process after the current multiyear contract expires. But Boeing has given the Navy an unsolicited offer for 170 aircraft at $49.9 million apiece - a 7 to 10 percent cost savings per aircraft, Gower said.

Several lawmakers, including Senate Armed Services Chairman Carl Levin and House Armed Services Chairman Ike Skelton, have raised concerns about the shortfall. Others, especially lawmakers representing areas with Boeing manufacturing plants, have suggested that buying more Super Hornets may be the best solution to bridging the fighter gap.

The Super Hornet "is under budget, on time, and it has been a great aircraft for its purpose," Sen. Claire McCaskill, D-Mo., said at a Feb. 28 Armed Services hearing. "And, frankly, having a few more of them around during this transition period of time, I think is not something that we should shy away from, particularly realizing the gap that's coming."

An aide to House Armed Services Oversight and Investigations Subcommittee ranking member Todd Akin, R-Mo., said the St. Louis congressman is weighing all options, including buying more Super Hornets.

But Boeing could encounter several procedural hurdles, not the least of which is stricter language in the fiscal 2008 defense authorization bill governing multiyear procurements. Lawmakers have been concerned these deals hinder congressional oversight and obligate future Congresses to pay for the programs.

The fiscal 2008 bill also states that multiyear contracts should yield a 10 percent cost savings. Multiyear proposals offering smaller savings "should only be considered if the [Defense] Department presents an exceptionally strong case," according to the conference report.

Meanwhile, the Navy will not complete a comprehensive assessment on the state of its current F/A-18 inventory until early this summer - well after the House and Senate panels mark up the fiscal 2009 bill. The analysis will provide more details on the impact and extent of the shortfall.

The Navy believes it can eek out 10,000 flying hours on its older Hornets, the precursor to the Super Hornets, a service spokesman said. Those aircraft initially were designed to fly for 6,000 hours, but later underwent overhauls to keep them flying for 8,000 hours.

But Gower said breathing new life into the older aircraft would require time-consuming and expensive maintenance and repairs. "That's part of the tradeoff they'll have to make as they go through the analysis," he added.

For its part, Lockheed Martin says it could accelerate the Navy's purchases of the JSF, but declined to provide details of how it would do so.

"Capacity does exist in the current program of record to increase procurement quantities in earlier production lots if the Department of the Navy decided to make that adjustment," Lockheed Martin officials said in an e-mail.

Source
http://www.govexec.com/story_page.cfm?articleid=39880&dcn=todaysnews

[tigershark]

The price seems too low to be real I can't see how the US Navy could pass that up.  Some where on some carrier or naval training center there are older C/D models or maybe even A/B models still flying where upgrading to E/F makes sense.   In a funny way I like how there kept the price below $50 million feels like your at a retail store shopping.   If it's true the US Navy shouldn't turn down Block-II Hornets at this price let some Naval reserve unit take them on eight/ten years from now.  There still a very modern mid range strike platform that carries every weapons under sun except naval mines and SEAL's mini subs.   

[Webmaster]

Good article.

On the one hand, I'd say, JSF will face delays, so yes, there's a gap appearing. Upgrading legacy Hornet may indeed not be the most cost-effective option, or only partially close the gap. The USN might not need the JSF so soon, i.e. the S. Hornet will be sufficient to meet operational demands and face potential threats for many more years.
However closing this gap with a large S. Hornet buy, budget problems will further effect the JSF delays. The F-35C might be done, but the USN only has funding and requirement for small batches per year. It's still more than 3 Billion additional spending. I'd say negotiate the deal with Boeing for a fixed price, but don't do a multi-year contract. Look each year how the old Hornets, and the JSF are doing, and the budget, then gradually increase the annual production orders if neccessary. It may be a bit more costly in the end, but it's better than threatning future procurement programs by locking into a deal that's even more expensive to get out of.
I think the strategical and economical importance of JSF success is more important than continuation of a Boeing product/production line. Boeing's timing is excellent though from a commercial point of view.

If I were a US tax payer, I'd be unsure whether to support this or not. But purely as a military aviation analyst, I'd say yes buy more S. Hornets (if you need them), just get those Growlers first please.

In a funny way I like how there kept the price below $50 million feels like your at a retail store shopping.   

LOL, well, I assume that it's derived from detailed cost analyses, so it's probably just a coincidence.

[Webmaster]

If it's true the US Navy shouldn't turn down Block-II Hornets at this price

It's only max 10% lower than it's paying right now though. I don't think too much importance should be placed on that. Each year the F-35C probably gets 5-10% more expensive to produce due to rising material prices and labour costs, so if this deal should mean you'd have to delay F-35C purchases due to lack of funding, you easily loose that price advantage again. Plus those delays will mean it takes longer for you to enter 'the next generation'.