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AF sends tanker report to Congress

AFPN

7/14/2003

7/14/2003 - WASHINGTON (AFPN) -- Air Force officials July 14 took the next step in replacing its 43-year-old KC-135 Stratotanker fleet by sending Congress a report outlining the proposed lease of Boeing KC-767A tankers.

Under the lease, 100 aircraft would be delivered five years sooner than under a traditional procurement plan, according to officials.

"This aircraft will transform the Air Force tanker force," said Dr. Marvin R. Sambur, assistant secretary of the Air Force for acquisition. "This lease marks the important beginning of the urgent re-capitalization to the KC-135 fleet -- a very successful, but rapidly aging, achievement of the Eisenhower administration.

"The principal reason for proposing a lease is the advantage it affords for quickly delivering needed tankers to our warfighters without requiring significant upfront funding," Sambur said.

The proposal calls for leasing the KC-767As for six years, with the first four aircraft delivered in fiscal 2006. All 100 tankers would be operating by fiscal 2011. The traditional procurement plan fields only one tanker by fiscal 2009.

The contracted lease price per aircraft in 2002 dollars is $138 million, which includes $7 million in construction financing. The total lease payment will be about $16.6 billion, considering inflation. The contract includes a provision to purchase the fleet at the end of the lease for $4.4 billion -- if Congress decides to approve such a purchase.

"The lease is based on a firm, fixed-price contract, with a return on sales not to exceed 15 percent," Sambur said. "This means if Boeing's profits are more than 15 percent on either the commercial or military portion of the tanker, they will reimburse the excess to the taxpayer. But if Boeing underestimates their costs, they will have to deliver the tanker no matter what the expense. It's an all-around good deal for the American taxpayer."

The KC-767A is the world's newest and most advanced tanker with capabilities important to the warfighter, Sambur said. It can deliver 20 percent more fuel than the KC-135E and can itself be refueled in flight, a capability the KC-135E does not have. The new tanker can also refuel Navy, Marine Corps and allied aircraft on every mission, significantly enhancing joint and combined operations. At maximum takeoff weight, the KC-767A requires 4,000 feet less runway than the KC-135E. Besides its role as a tanker, the KC-767A will be configured as a convertible freighter and can carry 200 passengers or 19 pallets of cargo.

Secretary of the Air Force Dr. James G. Roche forwarded the report, in accordance with provisions of the 2002 Department of Defense Appropriations Act.



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