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Why is the KC-46 so expensive


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So the KC-767 is flying and in service with Italy, Japan, Columbian and Brazilian Air Forces. The USAF is buying the KC-46 witch is basically the same aircraft. Why then is there so much involved in putting it into USAF service? The KC-767 is fueling USAf aircraft now. And why is the price climbing to such a high amount. It makes no sense to me.

Steve

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Because the KC-767 is not the same as the KC-46 that the USAF is trying to get.

And what the Columbians are flying isn't a KC-767 either. It's a converted 767 freighter with some drogues built in by IAI.

Jeff

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They are both Boeing 767's are they not? According to Boeing: KC-46 is based on the most fuel-efficient commercial airplane in its widebody class. All design work has been done on the basic plane. The KC-767 has a boom for fueling does it not? The KC-767 is a Boeing 767. The Boeing KC-767 is fueling USAF aircraft NOW. How about the JASDF KC-767.They all carry fuel and cargo. They transfer fuel to receiver aircraft. That is why they bought them. What is the major difference then? Besides the cost of buying them. The point I'm trying to make is that there is an aircraft designed by Boeing and paid for so why are we trying to re-invent the wheel.

Steve

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Jeff is correct, the KC-46 has many differences from the KC-767.

Different cockpit, different boom, etc, etc.

Enough differences that it has to go through its own development and testing phase.

-Gregg

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Jeff is correct, the KC-46 has many differences from the KC-767.

Different cockpit, different boom, etc, etc.

Enough differences that it has to go through its own development and testing phase.

-Gregg

I totally understand what you guys are saying. But at this time, with costs going threw the roof, why not buy an already designed and functional aircraft by the same manufacturer that works now.

Steve

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One major reason (that is being covered BY Boeing) is that there is over 170 MILES of wiring that has to be re-routed in the aircraft, because it did not meet the redundancy standards put forth by the USAF. The wiring bundles were too close to the back-up systems, and the chance of them being knocked out by a single hit were too great, so (literally) back to the drawing board it had to go. That is one of the main concerns causing the program to balloon in cost, and pushing the program further behind in testing.

Aaron

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And why is the price climbing to such a high amount. It makes no sense to me.

First of all, the price (to the US taxpayer) is not climbing. If I'm not mistaken, BA quoted a fixed price for the first batch of aircraft. Any cost escalation is on them, not the AF.

Secondly, it's common knowledge that they underbid this to secure a win against Airbus. Might be a smart business move if they get additional AF orders or can sell the aircraft to other nations. If not, they will lose their shirt on the program. My guess is that they will do just fine.

Lastly, this is not just a slightly upgraded KC-767. It's got a different wing, different cockpit and many other detail differences. From the ever reliable wiki:

The KC-767 Advanced Tanker offered for this KC-X round was based on the in-development 767-200LRF (Long Range Freighter), rather than the -200ER on which Italian and Japanese KC-767 aircraft are based differing by combining the -200ER fuselage, -300F wing, gear, cargo door and floor, -400ER digital flightdeck and flaps, uprated engines, and "sixth-generation" fly-by-wire fuel delivery boom.

It will also be equipped with an anti-MANPADS missile system and a limited EW suite.

All that being said, the AF could have saved a great deal of money by simply purchasing an off the shelf tanker such as the KC-767 used by other countries but because that would have been a simple and cost-effective solution, they didn't go this route.

Edited by 11bee
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All that being said, the AF could have saved a great deal of money by simply purchasing an off the shelf tanker such as the KC-767 used by other countries but because that would have been a simple and cost-effective solution, they didn't go this route.

Ahhhhh....the old tried and true..."If we didn't ask for it, we don't want it!!!" trick, not matter how good it is and what congress wants..."we're running this show".

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It´s also related to industry policy. Usually (!) national programs tend to become more expensive, because the company wants to finance additional research with these programs. Of course the USAF could have bought the KC-767-version. But that "simple" solution would have never offered the option to do additional research for future programs. So, it´s a kind of "investment" into (hopefully) successful future programs and developments.

HAJO

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So the KC-767 is flying and in service with Italy, Japan, Columbian and Brazilian Air Forces. The USAF is buying the KC-46 witch is basically the same aircraft. Why then is there so much involved in putting it into USAF service? The KC-767 is fueling USAf aircraft now. And why is the price climbing to such a high amount. It makes no sense to me.

Steve

Its because it tries to do too many tasks and is overly complex. The US Marines insisted it hover, and that compromised its design and made it expensive, its a jack of all trades and master of none, the Navy Doesn't even want it. Worse yet its made by LM who are lying liars that screw everything up if Boeing had won the Contract, it would probably be in service already. Instead its over budget and delayed when they could have simply upgraded legacy aircraft.

Just kidding. Its what Storm said.

Good question though :thumbsup: :thumbsup:

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It's pretty much a next Gen 767 only similarity is the designation and looks.

It is a good base to start from and Boeing has made several platforms that have stood the test of time. In the Civie world the 767 is a proven work horse as was the 707 and is the 737.

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So, it´s a kind of "investment" into (hopefully) successful future programs and developments.

... which will all be measurably cheaper as a result and will suffer no cost inflation. Just like every procurement programme in history.

That old cartoon still rings true: "Well, Senator, the reason you pay 2 cents and we pay 45 dollars for what you think are identical items is this. When you spend your 2 cents at the hardware store, you get a wood screw. Whereas when we spend $45 with Widgets Inc, we get an M2 torque-activated fibre-intrusive composite component assembly system."

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... which will all be measurably cheaper as a result and will suffer no cost inflation. Just like every procurement programme in history.

That old cartoon still rings true: "Well, Senator, the reason you pay 2 cents and we pay 45 dollars for what you think are identical items is this. When you spend your 2 cents at the hardware store, you get a wood screw. Whereas when we spend $45 with Widgets Inc, we get an M2 torque-activated fibre-intrusive composite component assembly system."

That's cute but all kidding aside it's fairly accurate, except for one thing. The military never demands to pay more, it's unscrupulous contractors that over price their items. The guy buying the stuff for the military works in an office and probably has no idea what the '"M2 torque activated" doohickie is or how much it ought to cost. He just gets the invoice from the contractor and signs it. My father worked as a procurement officer in the USAF, and from what he's told me they tried very hard to prevent contractor fraud but it's impossible for them to catch everything.

The USAF had a "zero-overpricing" program when I was in with which the people using the items could challenge prices that were too high. It made sense as users have a much better idea of what an item is and should cost. Our reward was a percentage of the first year's savings. I made several hundred dollars and knew people who made several thousand through challenging prices. I'd bet every one of those horror stories of ridiculously overpriced items originated from a service member challenging the vendors' pricing.

If they really want to stop the gouging they should put the unscrupulous vendors in jail.

Edited by Scott R Wilson
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That's cute but all kidding aside it's fairly accurate, except for one thing. The military never demands to pay more, it's unscrupulous contractors that over price their items.

Is it also the Contractor that insists on changing or adding requirements that then increase the price and increase delays?

Customer: Can you add this?

Contractor: sure, but it will cost more, and we will need more time.

Customer: don't worry, do it, we will settle up later.

Contractor: youre the boss

Customer: Can you make it do this?

Contractor: yeah but it will cost more, and wont be ready for another year

Customer: cool! and one more thing...

Contractor: yes but it will cost more...

This can go on for sometime until suddenly:

Contractor: Ok this will be several billions dollars, thanks to overages, inflation, redesign, etc.

Customer: Hey this isn't the original price you quoted us 10 years, 30 requirements, and 2 redesigns ago!?

look at some procurement history and you will see requirements changes throughout that caused big and costly redesigns. Osprey, B-2, JSF, F-22, B-1. all suffered form this and others suffered from services dropping out of the program-- naturally after their expensive requirements had already been incorporated.

so yes, of course they don't demand to pay more. Who would? instead, they take actions that will knowingly increase the price. Another great way to gum up the works is truncate, or curtail, or switch around order numbers.

Edited by TaiidanTomcat
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Is it also the Contractor that insists on changing or adding requirements that then increase the price and increase delays?

Customer: Can you add this?

Contractor: sure, but it will cost more, and we will need more time.

Customer: don't worry, do it, we will settle up later.

Contractor: youre the boss

Customer: Can you make it do this?

Contractor: yeah but it will cost more, and wont be ready for another year

Customer: cool! and one more thing...

Contractor: yes but it will cost more...

This can go on for sometime until suddenly:

Contractor: Ok this will be several billions dollars, thanks to overages, inflation, redesign, etc.

Customer: Hey this isn't the original price you quoted us 10 years, 30 requirements, and 2 redesigns ago!?

look at some procurement history and you will see requirements changes throughout that caused big and costly redesigns. Osprey, B-2, JSF, F-22, B-1. all suffered form this and others suffered from services dropping out of the program-- naturally after their expensive requirements had already been incorporated.

so yes, of course they don't demand to pay more. Who would? instead, they take actions that will knowingly increase the price. Another great way to gum up the works is truncate, or curtail, or switch around order numbers.

Also good points, and for sure that happens.

Here are a couple of examples of what I was talking about, granted on a micro scale compared to cost overruns of a whole program. I was working on a Receiver-transmitter of an APN-169C SKE (Station Keeping Equipment), when I found a very small coax cable inside was damaged. When I ordered a replacement I saw it was listed at well over $400. I researched the parts used to assemble it and altogether they were around $15 and it took about 10 or 15 minutes to assemble. I turned in a price challenge and it came back saying a fair price was $120 because the assembled cable also had to be tested to verify it was assembled properly, and I got a few hundred dollars for a reward.

In the news a long time ago was some story about the USAF spending some huge sum for an aircraft toilet seat, but what the reporter failed to understand was that the price was for the entire fiberglass enclosure, much like a walk-in shower enclosure, designed to keep corrosive urine away from the aircraft aluminum structure. So sometimes the reports of overpriced items are a bit exaggerated.

The airlines get ripped off too; when I worked for a regional airline we once had an attitude indicator that had the internal lighting inop. To replace the light involved removing a cover plate held on by two screws, and pull out a small printed circuit board that had two tiny lightbulbs soldered to it. We couldn't get the bulbs to repair it ourselves, we had to replace the strip. The vendor charged over $200 for it. I'll bet it cost the vendor less than $10 for parts and labor combined.

Edited by Scott R Wilson
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I can understand how a price quoted in an RFP 5-6 years before actual production begins, being higher; every year acquisition costs go up whether you're in the private sector or governmental purchases. When a new assembly line is opened the jigs, molds and what have you aren't going to be the same, new and improved technology, etc; so new [tool]ing in that context is very understandable. While the governments purchasing agents may go along with paying $400 for a ratchet, open end/boxed end wrench or some of the other questionable itemized costs listed on an acquisition form, however the taxpayers ol' John Q. Public and folks like me ain't necessarily going for it. On many occasion delays by the manufacturer not being able to accomplish by faults in design what was promised in the RFP's original bid causes them to alter the contract with added cost, and thereby causing cost overruns, and the longer the production is delayed the more it costs. Leaving Uncle Sugar to wait for testing and/or production of military hardware which was expected years earlier, not to slam what appears to be a good aircraft, but the F-35 is a good example. What has/is happening with this program is causing potential customers to re-think and opt to drop out of deal, meaning for the maker in order to profit from sales the cost of each unit has to be raised. It's far more profitable to design and build a new aircraft than it is to go off the shelf with an existing airframe and some modification with updated avionics, and technology. Mr. Boeing didn't make a lot of profit, with the KC-135R when they went from J-57's to CFM56 engines.

Edited by #1 Greywolf
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Despite being in the red, BA is still in a good position on this program. They know full well that the AF will be back to purchase more aircraft and they will have a chance to adjust pricing to ensure a hefty profit.

The AF then has to decide whether to accept a (probable) much higher cost for these follow on aircraft or go through the hell of another multi-year bid process. Given how bad the last couple of attempts went, I don't think the AF would ever willing decide to repeat the process. Although if McCain is now in a position of power (someone who tends to hold Boeing in a less than favorable light due to the previous tanker leasing fiasco), maybe the AF would be forced to re-bid this.

Should be interesting....

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Also good points, and for sure that happens.

Here are a couple of examples of what I was talking about, granted on a micro scale compared to cost overruns of a whole program. I was working on a Receiver-transmitter of an APN-169C SKE (Station Keeping Equipment), when I found a very small coax cable inside was damaged. When I ordered a replacement I saw it was listed at well over $400. I researched the parts used to assemble it and altogether they were around $15 and it took about 10 or 15 minutes to assemble. I turned in a price challenge and it came back saying a fair price was $120 because the assembled cable also had to be tested to verify it was assembled properly, and I got a few hundred dollars for a reward.

In the news a long time ago was some story about the USAF spending some huge sum for an aircraft toilet seat, but what the reporter failed to understand was that the price was for the entire fiberglass enclosure, much like a walk-in shower enclosure, designed to keep corrosive urine away from the aircraft aluminum structure. So sometimes the reports of overpriced items are a bit exaggerated.

The airlines get ripped off too; when I worked for a regional airline we once had an attitude indicator that had the internal lighting inop. To replace the light involved removing a cover plate held on by two screws, and pull out a small printed circuit board that had two tiny lightbulbs soldered to it. We couldn't get the bulbs to repair it ourselves, we had to replace the strip. The vendor charged over $200 for it. I'll bet it cost the vendor less than $10 for parts and labor combined.

:thumbsup:

I heard once that The story about the "$600 screw driver," was because it was special made to remove sensitive warheads/sensors in some special weapons. How much truth is there to that? I don't know, but there are some cases where it costs a lot because it really is something different, with crazy requirements. not that contractors aren't going to see what they can get away with.

Despite being in the red, BA is still in a good position on this program. They know full well that the AF will be back to purchase more aircraft and they will have a chance to adjust pricing to ensure a hefty profit.

The AF then has to decide whether to accept a (probable) much higher cost for these follow on aircraft or go through the hell of another multi-year bid process. Given how bad the last couple of attempts went, I don't think the AF would ever willing decide to repeat the process. Although if McCain is now in a position of power (someone who tends to hold Boeing in a less than favorable light due to the previous tanker leasing fiasco), maybe the AF would be forced to re-bid this.

Should be interesting....

Thats the other aspect of this equation. One of the reasons we see the additional/changed/adjusted requirements is that its takes forever to get a program going so when its finally actually happening, thats the time to pile on, because you sure as hell don't want to go through this again, so you can maybe get something in 15 years.

So I agree, they would rather pay much more to get some more than go through the whole song and dance again.

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... which will all be measurably cheaper as a result and will suffer no cost inflation. Just like every procurement programme in history.

That old cartoon still rings true: "Well, Senator, the reason you pay 2 cents and we pay 45 dollars for what you think are identical items is this. When you spend your 2 cents at the hardware store, you get a wood screw. Whereas when we spend $45 with Widgets Inc, we get an M2 torque-activated fibre-intrusive composite component assembly system."

Hang on... Just because you can buy a #10 stainless screw in a hardware store, that doesn't mean it is anything like the #10 stainless screw you'd put in a $140M commercial (not military) satellite you're going to place into orbit.

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And milspecs are a great cure for insomnia as well. I saw an article years ago that showed the ridiculously detailed military specification for fruitcake. I can't quote the legalistic jargon but it specified how many and how large the pieces of fruit and nuts should be in a specified sized cake amongst other details. The article went on to explain how that particular spec evolved. It had to do with suppliers furnishing fruitcakes for military dining halls that had almost no fruit or nuts in them, I'm sure because of "cost cutting" by the suppliers.

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