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KC-46 Tanker Aircraft: Key Aerial Refueling Capabilities Should Be Demonstrated Prior to the Production Decision

GAO-15-308 Published: Apr 09, 2015. Publicly Released: Apr 09, 2015.
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What GAO Found

The KC-46 acquisition cost estimate has declined by about 5.4 percent from $51.7 billion to $48.9 billion since February 2011 and the program is on track to meet performance goals. Most of the estimated cost decline is due to fewer than expected engineering changes and changes in military construction plans.

Changes in Total Program Acquisition Costs for the KC-46 Tanker Aircraft

Then-year dollars in millions


February 2011

December 2014










Military Construction








Source: GAO presentation of Air Force data. | GAO-15-308

The Air Force delayed the production decision two months, to October 2015, due to wiring problems that Boeing experienced that delayed aircraft delivery and testing. For example, Boeing completed 3.5 hours of flight testing during a single flight of the 767-2C (a precursor to the KC-46 tanker) in 2014, compared to nearly 400 flight test hours it planned to conduct. With program office approval, Boeing restructured its nearly 2,400 development flight test hour plan to focus on demonstrating key KC-46 aerial refueling capabilities required for the production decision. Significantly less testing will now be conducted prior to the decision and only three test months will be on a KC-46, compared to the original plan of 13 months. This testing is intended to demonstrate design maturity and fix design and performance problems before a system enters production. Boeing remains at risk of not being able to demonstrate the aerial refueling capabilities in time to meet the new production decision date due to late parts deliveries, software defects, and flight test cycle assumptions, which could result in additional delays.

Reduction in Planned Flight Testing Before Low-Rate Production Decision (in flight test months)

Changes in Total Program Acquisition Costs for the KC-46 Tanker Aircraft

Program officials are gathering manufacturing knowledge to support a production decision, such as determining if suppliers can produce military subsystems in a production environment. However, the program office will have less knowledge about the reliability and performance of the KC-46 than planned because of reduced testing prior to the decision. While this increases the risk of discovering costly problems late in development, contract provisions specify that Boeing must correct these at no cost to the government.

Why GAO Did This Study

Aerial refueling—when aircraft refuel while airborne—allows the U.S. military to fly farther, stay airborne longer, and transport more weapons, equipment, and supplies. Yet the mainstay of the U.S. tanker forces—the KC-135 Stratotanker—is over 50 years old. It is increasingly costly to support and its age-related problems could potentially ground the fleet. As a result, the Air Force initiated the $49 billion KC-46 program to replace the aerial refueling fleet. The program plans to produce 18 tankers by 2017 and 179 aircraft in total.

The National Defense Authorization Act for Fiscal Year 2012 included provisions for GAO to annually review the KC-46 program through 2017. This report addresses progress made in 2014 towards (1) achieving cost and performance goals, (2) meeting schedule targets, and (3) gathering manufacturing knowledge prior to the low-rate production decision. GAO analyzed key program documents and discussed development and production plans and results with officials from the KC-46 program office, other defense offices, and the prime contractor.

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GAO recommends that the Air Force ensure that key aerial refueling capabilities are demonstrated prior to holding the production decision. The Air Force concurred with the recommendation.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense Given that the KC-46 program has encountered significant delays to the start of development test and the schedule moving forward remains risky, the Secretary of Defense should direct the Air Force to ensure that key aerial refueling capabilities are demonstrated prior to the low-rate production decision.
Closed – Implemented
DOD noted in its official response to our recommendation that the KC-46 program office will not enter into the Milestone C decision without fulfilling all entrance criteria outlined in the Milestone B Acquisition Decision Memorandum, which includes the flight test demonstration of aerial refueling capabilities. Since our report, the program office delayed the Milestone C meeting by one year because key aerial refueling capabilities had not been demonstrated. The KC-46 program office recently completed aerial refueling demonstration flights in July 2016 and held the Milestone C decision on August 12, 2016. We are therefore closing this recommendation as implemented.

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Air Force procurementContract termsCost analysisDefense acquisition programsEngineeringIn-flight refuelingMilitary aircraftMilitary forcesOperational testingPerformance measuresPrime contractorsProduct evaluationProgram evaluationSchedule slippagesSoftwareStrategic planningSystems designWeaponsCost estimatesMilitary constructionPerformance goals