Air Force KC-46A Pegasus Tanker Aircraft Program Updated April 21, 2020 Congressional Research Service https://crsreports.congress.gov RL34398 Air Force KC-46A Pegasus Tanker Aircraft Program Summary On February 24, 2011, the Department of Defense (DOD) announced the Boeing Company as the winner of a competition to build 179 new KC-46A aerial refueling tankers for the Air Force, a contract valued at roughly $35 billion. Prior to the announcement, the program had been known as KC-X. The first four KC-46s were delivered in January 2019. The KC-46A acquisition program is a subject of congressional interest because of the dollar value of the contract, the number of jobs it would create, the importance of tanker aircraft to U.S. military operations, and because previous attempts to acquire a new tanker since 2001 had ultimately failed. It has also attracted attention due to cost growth, schedule delays, and other issues with program execution. DOD’s KC-46A acquisition strategy poses potential oversight issues for Congress, including What alternatives does the Air Force have to extend KC-135 service life or cope in other ways with the KC-46 delays? What are the effects of budget cuts on executability of the KC-46A program? Do contracts that place cost risk on contractors create positive incentives for performance? FY2020 defense authorization bill: The explanatory statement accompanying S. 1790 recommended $2.199 billion for the KC-46A program, $36.0 million less than the Administration’s request. FY2020 defense appropriations bill: The Joint Explanatory Statement of the Committee of Conference on S. 2474 approved $2.14 billion for the KC-46A program, a decrease of $94.8 million from the Administration’s request. The Administration requested $2.85 billion in procurement funding for the KC-46 in FY2021. FY2021 defense authorization and appropriations bills were in progress as of the date of this report. Congressional Research Service Air Force KC-46A Pegasus Tanker Aircraft Program Contents Introduction ..................................................................................................................................... 1 Recent Developments ...................................................................................................................... 2 Initial Deliveries ........................................................................................................................ 2 Ongoing Technical Issues .......................................................................................................... 2 Refueling Boom and Remote Vision System ...................................................................... 2 Leaking Fuel System........................................................................................................... 3 Load Floor ........................................................................................................................... 3 Foreign Debris Contamination ............................................................................................ 3 Financial Consequences ...................................................................................................... 4 Alternative tanking capability ............................................................................................. 4 Background ..................................................................................................................................... 4 Air Force Refueling Tankers ..................................................................................................... 4 Roles and Missions ............................................................................................................. 4 Current Tanker Fleet ........................................................................................................... 4 KC-46A Program Basics ........................................................................................................... 7 Numbers of Aircraft ............................................................................................................ 7 Acquisition Cost ................................................................................................................. 8 Contract Structure ............................................................................................................... 8 Program Schedule ............................................................................................................... 8 Basing ........................................................................................................................................ 9 Foreign Interest in Acquiring KC-46As .................................................................................... 9 Statements on KC-X Priority .................................................................................................. 10 Industrial Base ......................................................................................................................... 10 Asserted Employment Effects ........................................................................................... 10 Acquisition Strategy and Draft RFP......................................................................................... 11 Response to the Draft RFP ................................................................................................ 12 Final RFP .......................................................................................................................... 13 Legislative Activity for 2020 ......................................................................................................... 14 FY2020 Funding Request ....................................................................................................... 14 FY2020 Defense Authorization Act (H.R. 2500/S. 1790) ....................................................... 14 House ................................................................................................................................ 14 Senate ................................................................................................................................ 15 Final Action ....................................................................................................................... 15 FY2020 Defense Appropriations Act (H.R. 2968/S. 2474) ..................................................... 15 House ................................................................................................................................ 15 Senate ................................................................................................................................ 15 Final Action ....................................................................................................................... 16 Figures Figure 1. KC-46A Pegasus .............................................................................................................. 1 Figure 2. KC-135 Stratotanker ........................................................................................................ 6 Figure 3. KC-10 Extender ............................................................................................................... 7 Congressional Research Service Air Force KC-46A Pegasus Tanker Aircraft Program Tables Table 1. KC-46 LRIP Lots ............................................................................................................... 9 Table 2. Major Differences Between KC-X Draft RFP and Final Document ............................... 13 Appendixes Appendix A. Potential Longevity of KC-135 Fleet ....................................................................... 17 Contacts Author Information ........................................................................................................................ 18 Congressional Research Service Air Force KC-46A Pegasus Tanker Aircraft Program Introduction Figure 1. KC-46A Pegasus Source: U.S. Air Force photo by Master Sgt. Michael Jackson. Note: Shown with F-15E Strike Eagle above Edwards AFB, CA. On February 24, 2011, the Department of Defense (DOD) announced the Boeing Company as the winner of a competition to build 179 new KC-46A aerial refueling tankers for the Air Force, a contract valued at roughly $35 billion. These KC-46As, to be procured at a maximum rate of 15 aircraft per year, are to replace roughly one-third of the Air Force’s aging fleet of KC-135 aerial refueling tankers. The Air Force and the U.S. Transportation Command state that replacing the KC-135s is their highest recapitalization priority. The Administration’s proposed FY2021 defense budget requested $2.85 billion in Air Force procurement funding to continue KC-46A acquisition. The KC-46A acquisition program is a subject of interest because of the dollar value of the contract, the number of jobs it may create, the importance of tanker aircraft to U.S. military operations, and because previous attempts by DOD to move ahead with a KC-X acquisition program over the last several years have led to controversy and ultimately failed. The history of those earlier attempts forms an important part of the context for DOD’s KC-X competition, particularly in defining the required capabilities for the KC-46A and designing and conducting a fair and transparent competition. Further, the Air Force has recently changed its acquisition objective for the KC-46 program and its plan for the future composition of the tanker fleet.