Drogue  refueling is available via the centerline drogue system in the middle of the  aircraft, or via a wing air refueling pod (WARP) located on each wing. Boeing was awarded a fixed price incentive (firm target) contract for  development. Barring any changes to KC-46 requirements by the Air Force, the  development contract specifies a ceiling price of $4.9 billion for Boeing to  develop the first 4 aircraft, at which point Boeing must assume  responsibility for all additional costs. Program Is Tracking to Cost and Performance Targets, but Aircraft Delivery Will Be Delayed

The KC-46 program is meeting total acquisition cost and performance  targets, but has experienced some recent schedule delays. This is about $7.3 billion less than the original  estimate of $51.7 billion or about 14 percent less. The Air Force has been able to decrease its cost estimate over the past 4  years primarily because it has not added or changed requirements and  therefore there were fewer engineering changes than expected. Program officials also report that the program does not yet have actual  flight test data to validate many of the other key and technical  performance capabilities, such as those for operational availability and  mission capability mentioned above. Key Schedule Milestones Have Slipped at Least One Year

Since our last report in April 2016, the Under Secretary for Acquisition,  Technology and Logistics approved the KC-46 program to enter low-rate  initial production in August 2016, one year later than originally planned. Those problems have been  overcome, but time was lost working through them. Boeing and KC-46 program officials modified the program schedule in  January 2017 to reflect the work remaining, including obtaining Federal  Aviation Administration confirmation that the aircraft’s parts all match their  design drawings. Overall, the current schedule reflects a 14-month delay in Boeing  delivering the first 18 aircraft with 9 WARP sets under the terms of the  development contract, referred to as 18 fully capable aircraft in table 2. Instead of meeting an August 2017 date, the program office now  estimates that Boeing will deliver the first 18 aircraft by February 2018  and the 9 WARP sets separately by October 2018. Electromagnetic Effects Testing Schedule: First, there is risk that  Boeing will not be able to complete required electromagnetic effects  testing on the KC-46 in May 2017, as currently planned. According to program  officials, Boeing is moving away from the test once approach and towards  sequential testing as a mitigation strategy. Program  officials, however, believe that the transition to a new testing approach  will require weeks of test plan rewriting, and that obtaining approval for  the design of all parts, including the WARPs, from the Federal Aviation  Administration will continue to pose risk to test completion as currently  planned. Agency Comments

We are not making recommendations in this report. Appendix I: KC-46 Key Performance Parameters and System Attributes and Status of Technical Performance Capabilities

The program office has 14 key performance parameters and system  attributes that are critical to the KC-46 aircraft’s military capability and 7  technical performance capabilities that track progress to meeting contract  specifications. Related GAO Products

KC-46 Tanker Aircraft: Challenging Testing and Delivery Schedules Lie  Ahead.
Why GAO Did This Study

The KC-46 tanker modernization program, valued at about $44 billion, is among the Air Force's highest acquisition priorities. Aerial refueling—the transfer of fuel from airborne tankers to combat and airlift forces—is critical to the U.S. military's ability to effectively operate globally. The Air Force initiated the KC-46 program to replace about a third of its aging KC-135 aerial refueling fleet. Boeing was awarded a fixed price incentive contract to develop the first four aircraft, which are being used for testing. Among other things, Boeing is contractually required to deliver a total of 18 aircraft and 9 wing air refueling pod sets by August 2017. This is defined as required assets available. The program plans to eventually field 179 aircraft in total.
The National Defense Authorization Act for Fiscal Year 2012 included a provision for GAO to review the KC-46 program annually through 2017. This is GAO's sixth report on this issue. It addresses (1) progress made in 2016 toward achieving cost, performance, and schedule goals and (2) development risk remaining. GAO analyzed key cost, schedule, development, test, and manufacturing documents and discussed results with officials from the KC-46 program office, other defense offices, the Federal Aviation Administration, and Boeing.

What GAO Found

The KC-46 tanker modernization program is meeting cost and performance targets, but has experienced some recent schedule delays.
Costs: As shown in the table below, the program's total acquisition cost estimate has decreased about $7.3 billion, or 14 percent, since the initial estimate. This is primarily because there have been no requirements changes and there have been fewer engineering changes than expected.
(then-year dollars in millions)
Performance: The program office estimates that the KC-46 will achieve its key and technical performance capabilities, such as completing a mission 92 percent of the time. As noted below, though, much testing remains.
Schedule: The program fixed design problems and was approved for low-rate initial production in August 2016, a year late. Boeing (the prime contractor) will not meet the original required assets available delivery schedule due to ongoing Federal Aviation Administration certifications of the aircraft, including the wing air refueling pods, and flight test delays. As shown, the remaining schedule was modified to allow Boeing to deliver the first 18 aircraft and pods separately by October 2018, 14 months later than first planned.
GAO's analysis shows there is risk to the current delivery schedule due to potential delays in Federal Aviation Administration certifications and key test events. Boeing must also complete over 1,700 test points on average for each month from February to September 2017, a level that is more than double what it completed in the last 11 months. Program officials agree that there is risk to Boeing's test completion rate until it obtains Federal Aviation Administration approval for the design of all parts, including the pods, but test mitigation strategies are underway.

What GAO Recommends

GAO is not making recommendations.