After protracted discussions over the price tag, the United States Air Force is reportedly on the cusp of finalizing a deal with Boeing for the procurement of the E-7 Wedgetail airborne early warning and control aircraft. This breakthrough in negotiations marks a significant step towards modernizing the Air Force’s surveillance capabilities as it seeks to phase out the ageing E-3 Sentry AWACS fleet.
The initial cost estimates by the Air Force for the rapid prototyping program were around $2.1 billion. However, Boeing’s projections were nearly double this figure, leading to a stalemate between the two parties. Andrew Hunter, the Air Force’s top acquisition official, acknowledged that the final price will surpass the original estimate, emphasizing that “it is necessary.” In response to concerns over the steep price, the Air Force has managed to narrow the gap substantially, moving towards an agreement that is deemed affordable for both the taxpayer and the military service.
One of the critical challenges faced in the negotiations was Boeing’s calculation of substantial non-recurring engineering costs required to tailor the Wedgetails to meet U.S. specifications. This factor contributed significantly to the cost divergence. Despite these hurdles, both sides seem committed to advancing the project, with Boeing stating, “We are partnering with the US Air Force to deliver this critical capability and are working diligently to reach an agreement.”
The Wedgetail platform is vital to the Air Force’s strategy, especially as the current E-3 Sentry AWACS aircraft approaches the end of its operational life, with its engines set to expire around 2030. The Air Force intends to transition to the E-7 Wedgetail, with plans to procure a total of 26 aircraft by 2032. The E-7 Wedgetail’s sophisticated Multi-role Electronically Scanned Array (MESA) radar developed by Northrop Grumman promises continuous, enhanced surveillance capabilities.
Though an initial $1.2 billion contract was awarded to Boeing for the first two prototype aircraft under an undefinitized contract action (UCA), the pricing dispute led to delays in procurement funding. Still, the Air Force remains hopeful that the first prototype aircraft delivery will occur in fiscal year 2027. Hunter noted that while starting a program under a UCA is not ideal, it was the best course of action to expedite the replacement of the E-3.
This strategic acquisition comes at a time when the Air Force is grappling with cost issues across its fleet, such as the sustainment expenses for the F-35A Lightning II, which Hunter mentioned are under scrutiny, particularly regarding supply chain management. In the meantime, the E-7 Wedgetail represents a critical upgrade to the Air Force’s ability to operate in highly contested environments, which, as Lt. Gen. Richard Moore pointed out, the E-3 AWACS can no longer effectively do.
Relevant articles:
– Air Force nears Wedgetail deal with Boeing after jostle over costs, Breaking Defense, 05/10/2024
– 7A in Negotiations with Boeing, Aims to Reduce F, Defense Daily Network, 05/08/2024