President-elect Donald Trump Tuesday morning called for the Air Force to cancel the Presidential Aircraft Recapitalization (PAR) program, citing without evidence that costs are “out of control.”
Boeing [BA] is the prime contractor for PAR. Trump said on Twitter that costs for the program surpassed $4 billion. Air Force spokesman Capt. Michael Hertzog said Tuesday that the service has budgeted $2.7 billion in the fiscal year 2017 Future Years Defense Program (FYDP) for research, development, test and evaluation (RDT&E) portion of the program. Hertzog said the Air Force expects this number to change as the program matures with the completion of risk reduction activities.
PAR is to equip two Boeing 747-8 aircraft with capabilities needed to direct a war in situations as extreme as nuclear war. Teal Group Vice President for Analysis Richard Aboulafia said Tuesday he believed that Trump’s $4 billion or more price tag for PAR was accurate, though misleading. Aboulafia said blaming the aircraft is misleading as the aircraft is only 20 percent of the price. The rest of the cost, he said, goes to making the aircraft able to survive and fight in extreme wartime activities. Aboulafia noted Air Force One also allows the president to direct a war from the air and communicate with both the public and the military from around the world.
“It’s not the aircraft, it’s the amazing array of black boxes that allows the president to do that,” Aboulafia said.
Boeing spokesman Todd Blecher said Tuesday the company is currently under contract for $170 million to help determine the capabilities of this complex military aircraft that serves the unique requirements of the president of the United States. Boeing, he said, looks forward to working with the Air Force on subsequent phases of the program.
The Air Force awarded Boeing three contracts worth $169 million in 2016 for PAR. The Air Force on Jan. 29 awarded Boeing a $26 million contract modification for pre-Milestone B Phase 1 activities. The Air Force awarded Boeing a $127 million contract modification on July 15 for more pre-Milestone B Phase 2 activities. The service on Sept. 29 awarded Boeing a $16 million contract modification for additional pre-Milestone B Phase 2 activities. Including fiscal year 2017, the Air Force anticipates requesting $2.8 billion for PAR through FY ’21.
The average price of a 747-8 is $379 million, according to Boeing spokesman Doug Alder. Alder said depending on the operator most aircraft used commercially are in service 20 to 25 years. The current pair of Air Force Ones, officially designated VC-25, were first deployed in late 1990 and early 1991.
Trump’s tweet brings back Pentagon procurement memories as President Barack Obama in 2009 cancelled a program to develop a new Marine One presidential helicopter. Andrew Hunter, senior fellow for the international security program at the Center for Strategic and International Studies (CSIS) think tank in Washington, said Trump’s tweet Tuesday sends a political message about wanting to constrain government spending and looking at defense spending hard, even if Trump is pro-defense increases.
Aboulafia said he thought the Marine One cancellation was different from Trump’s call to cancel PAR because Marine One had serious cost overruns that PAR does not have. Lexington Institute President and COO Loren Thompson agreed with this point, saying the Marine One program from the early 2000s was literally unexecutable as the White House had loaded the program with so many performance features that no helicopter in the world could have executed them.
Another reason PAR could have drawn Trump’s ire is its possible contract type. Hunter said he believes the current PAR contract type is cost-plus, where the government picks up the cost overruns, because it would be highly unlikely for this type of work to be done under another contract type, like fixed-price, where the company picks up the tab for overruns. Trump could gain from attacking such a program, he said, because it could benefit him politically with key lawmakers like Senate Armed Services Committee (SASC) Chairman John McCain (R-Ariz.), who is often critical of cost-plus programs like F-35 and the new bomber. Neither the Air Force nor Boeing would confirm the current contract type.
Aboulafia also said Marine One was a fleet of 23 helicopters while PAR is two jetliners for the president to use and are necessities. Thirdly, Aboulafia said today’s economy is different as the Marine One cancellation was made in the middle of the worst economic meltdown since World War II. Today’s economy is very different, he said.
Aboulafia believes Trump’s tweet was political in that he’s behaving like a demagogue as he campaigned on a platform of ramping up defense spending. Aboulafia said if one is to boost defense, they have to look like they’re fighting waste, fraud and abuse. He noted this is a tough contradiction to reconcile.
PAR is to outfit two Boeing 747-8 model commercial aircraft to serve as a mobile command post for when the president is on board. Principal differences between the VC-25, the official Air Force designation for the aircraft, and the standard Boeing 747 are the electronic and communications equipment, self-contained baggage loader, front and aft air-stairs and the capability for in-flight recruiting. Other modifications will include electrical power upgrades, a mission communication system, a medical facility, executive interior, a self-defense system and autonomous ground operations capabilities.
The Air Force said Sept. 12 that it officially requested a proposal from Boeing to complete detailed design, modification, test and fielding of two aircraft that will provide worldwide airlift support starting in the 2024 timeframe. A third production representative aircraft is still under consideration for future procurement.
Trump’s tweet Tuesday morning coincides with a Chicago Tribune story posted the same day quoting Boeing CEO Dennis Muilenburg saying international trade was essential to the United States economy and its importance due to international sales, including commercial jet orders from China. Trump during his campaign planned to roll back trade agreements and make it more difficult for companies to do business with China.