Air force One taxis the runway in ~ Tyndall Air force Base, Florida, might 8, 2019. Chairman Donald J. Trumped met through Tyndall AFB leaders and civic leaders to talk about progress on the base’s restore efforts. (U.S. Air pressure photo by Airman first Class Monica Roybal)
WASHINGTON — Boeing will have to pay $168 million the end of pocket to cover increased costs on the VC-25B Air pressure One replacement program, the agency said Wednesday.

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Boeing deadline the overrun to “engineering inefficiencies” brought about by the impact of COVID-19, however Chief financial Officer Greg Smith claimed the program remains ~ above schedule v a projected shipment of the first VC-25B in 2024.

However, Boeing’s quarterly report to the Security and Exchange Commission noted future danger to the program’s cost and schedule as a an outcome of the engineering challenges. “We believe these inefficiencies will an outcome in staffing challenges, schedule inefficiencies and higher costs in the upcoming phases of the program,” the agency stated in the report.


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It was not instantly clear exactly how work top top the VC-25B program had actually been disrupted.

“That charge was really associated with COVID-19,” blacksmith told reporters in one April 29 phone call call. “As we have actually folks working essentially — an especially on the engineering side — and that’s gone, we absolutely experienced part inefficiencies that has actually caused united state to re-evaluate our approximates to finish those efforts. And that’s basically what friend saw today in our results and the charge connected with that.”

Smith added that back the program team has actually done a “good job” of regulating the routine in the challenge of changes caused through the novel coronavirus pandemic and is “executing an extremely well on numerous fronts,” Boeing might not reduce the included cost to the regimen this gaue won quarter.

Air force acquisition executive will certainly Roper stated he spoke through Boeing Defense CEO Leanne Caret critical night about the problem, but because the problem was “late breaking,” he referred thorough questions come the regime office.

On Wednesday night, the Air force released a statement that — prefer Boeing — deadline the price increase to “engineering inefficiencies.”

Just two weeks ago, Roper praised the progress of the program, which used virtual devices to complete its critical design testimonial in March and wrap up a change readiness testimonial in April. At the time, the routine was on schedule through no disruptions due to COVID-19, he claimed then.

The Air force One replacement drew substantial attention in 2016 ~ then-President-elect Donald trumped tweeted that the program was as well expensive and should it is in cancelled unless the cost—then projected as much more than $4 billion—came down. In 2018, the Air force awarded Boeing a $3.9 billion fixed-price contract come modify 2 747s right into the VC-25B configuration.

" There has actually not been an increase to the $3.90B firm-fixed price contract with Boeing or the $5.3B VC-25B total acquisition cost," said Air pressure spokeswoman Ann Stefanek.

Although the complete price of the program is approximated to struggle $5.3 billion as soon as ancillary expenses such as new hangars and also revised technical manuals are included, the fixed-price ceiling on the $3.9 billion transaction ensures that Boeing will need to pay for any cost expansion incurred while structure the two new Air force Ones.

In February, Boeing began making structural changes to two Boeing 747s at its basic in san Antonio, Texas — paving the means for those jets to come to be VC-25Bs. The jet will also receive upgrades including intensified electrical power, devoted communication systems, a medical facility, a customized executive interior and also autonomous ground operations capabilities.

“As planned in the baseline schedule, the following phase of modification is on course to begin in June 2020,” Stefanek said.

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About Valerie Insinna

Valerie Insinna is Defense News' air warfare reporter. She previously operated the Navy/congressional beats because that Defense Daily, i beg your pardon followed practically three years as a staff writer for national Defense Magazine. Prior to that, she worked as one editorial assistant because that the Tokyo Shimbun’s Washington bureau.