Boeing is seeking to increase the Air Force One’s $ 3.9 billion fixed-price contract


Boeing is trying to renegotiate the price deal it agreed to supply two Air Force One aircraft to the White House, a government official revealed Tuesday, saying it needs another year to deliver them.

The aircraft manufacturer signed a fixed-price contract worth $ 3.9 billion in 2018, after President Donald Trump then called “ridiculous” the original estimate of $ 5 billion and tweeted “cancel the order “.

But the contract went into difficulty and the scale of the problem became clearer Tuesday thanks to the testimony of Congressman Darlene Costello, the deputy assistant secretary general for the acquisition of the Air Force.

She told the House Armed Services Subcommittee on Marine Power and Projection that Boeing had cited suppliers ’problems and Covid-19’s requesting a one-year extension for the contract.

The plane was originally scheduled to be ready in 2024.

Costello also said the Chicago-based manufacturer had sent the government a letter of intent asking it to increase contract payment – what is known as a “fair adjustment request.”

Boeing’s letter of intent is the first step in asking for an increase in the price of the program, Costello said, “so we have begun this negotiation process.”

The company’s problems with the program came in April when it announced it had terminated its contract with supplier GDC Technics, which installs the aircraft’s interior, after it failed to “comply with contractual obligations “.

GDC Technics filed for Chapter 11 bankruptcy that same month. The two companies are getting organized.

Boeing reported a charge of $ 318m in the first quarter in relation to the program.

Costello said Congress would receive an update in September on whether the schedule would change, and the timing and cost of deliveries would be reconsidered together.

“We have received a notification from Boeing of a revised schedule from you. We are in the process of conducting a calendar risk assessment. [the assessment] later this summer, we’ll determine if we need to make any adjustments to the calendar. ”

Boeing did not immediately respond to a request for comment.

Joe Courtney, a Democratic deputy from Connecticut, said the changes were “a disappointment to all of us. We thought this was perhaps a program where the government has gotten a good deal.”



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